The business website 24/7 Wallstreet reports that retailers expect to make major increases in hiring for the Holiday season. That’s good news for people who will get jobs, but it can lead to happy media reports that mask deeper problems in the economy. Why? First, these jobs are not permanent and generally low paying. Second, the unemployment rate and related news will sound better than it really is. For my money, watch the manufacturing sector to understand how the job market is doing. More importantly, watch changes in wages and benefits. Until America gets a raise (at least 99% of America), we will not have significant changes in the economy or in real opportunities for working people.
I was taken aback by a large headline on Huffington Post: “1 in 4 Americans Open to Secession.” Could a quarter of American really feel this way? That’s a question driven by fear. In reality, the news isn’t that shocking. About 30% of Americans are conservatives who are not fans of big government. Put in that context, it’s surprising that even more Americans aren’t open to secession.
We saw similar frightening statistics when the American job market bled jobs in 2008 and 2009. Many people I talked to were paralyzed by what they heard on the news. Now many people are getting cocky because statistics say the job market is improving. As I noted in my last post, these statistics are true in that there are more jobs available now than there were four years ago. However, the problem on every level of the career ladder is pay. Many new jobs are low wage jobs. Many people have gotten small raises or no raises at all over the last five years. We need to look behind the statistics and get past the fear and the optimism.
Huffington Post reports that income inequality costs the average American worker $18,000 a year. This number is drawn from an Economic Policy Institute report that considers how money has been redistributed from the working poor and middle class to the 1%. The question is not just lost income, but also how increased productivity has not been matched by increased salaries. Huffington Post author Jillian Berman puts it this way: “The rich have gotten richer at the expense of the rest of us.”
This article is another example of why good job news can hide deeper problems. If workers are getting low income jobs or not getting decent raise, they will have a constant feeling of falling behind, one step from bankruptcy – social insecurity. This problem will not be solved until something changes so there is a more equitable distribution of income and wealth. America needs a raise, the kind of raise that will let working people pay off their debts and save for the future.
Common Dreams reports that much of the good news about job growth hides more troubling economic news. The article cites research by the National Economic Law Project that shows most workers have lost ground on wages. It also quotes economist Robert Kuttner, who notes that more new hires face part-time work schedules, including on-call jobs that give no set hours. We want more jobs. But they need to be good jobs, not work schedules that let employers make more money by making workers more insecure. America needs a raise and better working conditions.
Last week The Chicago Tribune reported that several large companies are bringing their call centers back to the U.S. While more Americans will be employed because of this shift, the news isn't all good. Many call centers pay low wages and offer little in the way of benefits or career path. Call center workers need to be smart and articulate. They have to solve problems while an angry customer often lashes out at them. How much are they paid for this service. According to the Tribune article, the average pay is $22,000 to $45,000 per year ($11 to $22 per hour). America needs these jobs. It also needs a raise.
Jobs! Jobs! Politicians and TV talking heads have been saying we need more jobs since the financial crisis of 2008-2009. Well, now we have some good news about jobs. The American economy has made up all the jobs lost during the crisis. This would seem to be a positive trend. However, all jobs are not equal, especially when it comes to wages.
In today’s Chicago Sun-Times, Maudlyne Ihejirka has written a detailed account of this situation. She tells the story of an experienced child care teacher with a salary of 35,000 who was laid off and could only find a new job playing $12.25 an hour (a little more than $25,000 per year). 41% of job losses were in higher wage industries. Only 30% of new jobs have been generated in those industries. Hiring patterns complicate the problem. As I noted in a recent post, more companies are relying on long term contract and temporary employees to fill open positions. A graph accompanying Ihejirka’s article notes that temporary jobs were the leading source of job growth in the U.S. over the last year.
The one problem I have with the article is that it suggests that most of these jobs are at the minimum wage of $7.25. Many low wage workers make $8-$12 an hour, which is still not enough to raise a family or even survive as an individual. Companies are also avoiding paying benefits by limiting hours or scheduling employees on an on-call basis with no guarantee of hours. Moving the minimum wage to $15 may sound extreme, but it is based on the reality of life in most American big cities.
Bill Clinton with help from Newt Gingrich and the GOP ended “welfare as we know it.” More people are working now than ever before. The problem is that there are more and more low wage workers who need help from government programs to pay for life’s necessities, such as rent and food. In essence, we have moved from a system that rewards individuals who don’t work to one that subsidizes large corporations and big investors by helping to house and feed their employees.
Rather than worrying about benefits given to poor people, we should focus on corporate welfare and tax breaks to the “job creators” who have been raking in record profits and increased income on their billions. The problem is not jobs. It’s pay, and who is getting paid.
Al Jazeera America reports on claims of a Texas employment miracle. While some may be moving ahead in the Lone Star state, construction workers interviewed for this article are working hard for $8-$10 an hour. The state’s governor brags that Texas has an unemployment rate far lower than the national average (national 6.3%; Texas 5.5%). However, the state is producing as many low wage jobs as high paying jobs. It also offers less support for low wage workers, which means they struggle even more to get by. The working poor in Texas live harder lives than workers in New York or California, states that have more progressive labor laws and social safety net services.
Some may say, “A job is a job.” Those people usually have a job or other source of income that gives them the security needed to be glib and unfeeling about others. Across America, low wage workers are struggling to get by. So are middle class workers, who often resent the aid given to low wage workers. All American workers need to remember who the real winners in this society are – the 1% – and ask them to pay for their share of our common needs. The Texas Miracle is just one more example of an American economy that asks more and more of the working poor. That’s not a miracle. It’s a tragedy.
Conservatives like to beat the drum of American Exceptionalism. Then they do everything to make that term a big joke. Laura Clawson of Daily Kos examines national rates for the minimum wage. American is nowhere close to being exceptional. Australia, France, Canada, and several other developed countries have a higher minimum wage. Clawson points out that the U.S. has to use social programs to supplement wages of low paid workers. In essence, this means that those who make more than the minimum wage are subsidizing companies that pay the minimum wage. The next time you hear someone complain about government programs, please remind that person that many of the people getting those benefits work. The real winner is the corporations that pay low wages. The real problem is corporate welfare.
Writing in Think Progress, Bryce Covert examines problems at Walmart. Some stores have lost sales because the shelves are empty. Why are they empty? Because there are no workers to fill them. As the retail giant cuts its full-time work force, the quality of work has gone done as well. Shelves are not being refilled, which also means that shoppers will find other places to buy. Covert points out that several research companies have downgraded Walmart because of this problem.
Sooner or later, employees will show that they have had enough. They will not work hard, do sloppy work, or jump from job to job to punish the employer who mistreats them. Shoppers will go where they get the best price and the product they want. Some shoppers may even be paying attention to how a company treats its workers.
Citing a report by the New York Federal Reserve Bank, Think Progress examines the plight of recent college graduates who can only land low paying jobs. Ironically, some jobs that don’t require college degrees pay significantly more. The report does not deny that people with degrees have better work opportunities. What it notes is that more graduates are not enjoying opportunities they had in the past. As a country, we need to start paying attention to the kind of jobs that are being created in the current “recovery.” As more stories of college students falling through the economic cracks become prominent, especially when they are backed by data from the New York Fed, it’s logical to assume that some students will give up on college and give up on their future. Opportunity needs to be more than a political slogan.
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