Jobs are slowly returning to America, but most of them pay lousy wages and low if non-existent benefits. The Bureau of Labor Statistics estimates that 7 out of 10 growth occupations over the next decade will be low-wage — like serving customers at big-box retailers and fast-food chains. That’s why the median wage keeps dropping, especially for the 80 percent of the workforce that’s paid by the hour.
It’s also part of the reason why the percent of Americans living below the poverty line has been increasing even as the economy has started to recover — from 12.3 percent in 2006 to 15 percent in 2011. More than 46 million Americans now live below the poverty line.
Many of them have jobs. The problem is that these jobs just don’t pay enough to lift their families out of poverty.
So, encouraged by the economic recovery and perhaps also by the election returns, low-wage workers have started to organize.
These workers are not teenagers. Most have to support their families. According to the Bureau of Labor Statistics, the median age of fast-food workers is over 28; and women, who comprise two-thirds of the industry, are over 32. The median age of big-box retail workers is over 30.
Organizing makes economic sense.
Unlike industrial jobs, these can’t be outsourced abroad. Nor are they likely to be replaced by automated machinery and computers. The service these workers provide is personal and direct: Someone has to be on hand to help customers and dole out the burgers.
And any wage gains they receive aren’t likely to be passed on to consumers in higher prices because big-box retailers and fast-food chains have to compete intensely for consumers. They have no choice but to keep their prices low.
That means wage gains are likely to come out of profits – which, in turn, would affect the return to shareholders and the total compensation of top executives.
That wouldn’t be such a bad thing.
According to a recent report by the National Employment Law Project, most low-wage workers are employed by large corporations that have been enjoying healthy profits. Three-quarters of these employers (the fifty biggest employers of low-wage workers) are raking in higher revenues now than they did before the recession.
America is becoming more unequal by the day. So wouldn’t it be sensible to encourage unionization at fast-food and big-box retailers?
Yes, but here’s the problem.
The unemployment rate among people with just a high school degree – which describes most (but not all) fast-food and big-box retail workers – is still in the stratosphere. The Bureau of Labor Statistics puts it at 12.2 percent, and that’s conservative estimate. It was 7.7 percent at the start of 2008.
High unemployment makes it much harder to organize a union because workers are even more fearful than usual of losing their jobs. Eight dollars an hour is better than no dollars an hour. And employers at big-box and fast-food chains have not been reluctant to give the boot to employees associated with attempts to organize for higher wages.
Meanwhile, only half of the people who lose their jobs qualify for unemployment insurance these days. Retail workers in big-boxes and fast-food chains rarely qualify because they hadn’t been on the job long enough or were there only part-time. This makes the risk of job loss even greater.
Which brings us back to what’s happening in Washington.
Washington’s obsession with deficit reduction makes it all the more likely these workers will face continuing high unemployment – even higher if the nation succumbs to deficit hysteria. That’s because cutting government spending reduces overall demand, which hits low-wage workers hardest. They and their families are the biggest casualties of austerity economics.
And if the spending cuts Washington is contemplating fall on low-wage workers whose families are under the poverty line – reducing not only the availability of unemployment insurance but also food stamps, housing assistance, infant and child nutrition, child health care and Medicaid – it will be even worse. (It’s worth recalling, in this regard, that 62 percent of the cuts in the Republican budget engineered by Paul Ryan fell on America’s poor.)
By contrast, low levels of unemployment invite wage gains and make it easier to organize unions. The last time America’s low-wage workers got a real raise (apart from the last hike in the minimum wage) was in the late 1990s, when unemployment dropped to 4 percent nationally – compelling employers to raise wages in order to recruit and retain them, and prompting a round of labor organizing.
That’s one reason why job growth must be the nation’s number one priority. Not deficit reduction.
Yet neither side in the current “fiscal cliff” negotiations is talking about America’s low-wage workers. They’re invisible in official Washington.
Not only are they unorganized for the purpose of getting a larger share of the profits at Wal-Mart, McDonalds, and other giant firms, they’re also unorganized for the purpose of being heard in our nation’s capital. There’s no national association of low-wage workers. They don’t contribute much to political campaigns. They have no Super PAC. They don’t have Washington lobbyists.
But if this nation is to reverse the scourge of widening inequality, Washington needs to start paying attention to them. And the rest of us should do everything we can to pressure Washington and big-box retailers and fast-food chains to raise their pay.
Even after adjusting for these factors, all of which are known to influence heart attack risk, Peterson and his colleagues found that unemployment remained strongly associated with higher heart attack rates. And while the effect is generally biggest in the first year after a job loss, that excess risk does not go away entirely once a person returns to work. The more times a person loses a job during his or her career, it seems, the higher the risk of heart attack. In fact, the difference between a person who has never lost his job and someone who has been unemployed four or more times is as big as the difference between a nonsmoker and a smoker, or between a non-diabetic and a diabetic, when it comes to heart problems.
What remains unclear, however, is what factors are contributing to the increased heart risk. Stress is certainly a factor, but the cumulative effect of unemployment suggests something more complicated may be contributing to the trend. No one thinks it’s pleasant to get fired or laid off. But, as the authors of an editorial accompanying the research say, the precise mechanism linking joblessness to heart attacks remains unknown.
I actually had some hope for this Adam Davidson piece. After all, he quotes my favorite labor economist, my buddy Mark Price (follow Mark on Twitter here).
But he lets it all collapse at the end, after pointing out rightly that the so-called skills gap isn’t a skills gap at all. “Trying to hire high-skilled workers at rock-bottom rates is not a skills gap,” a study from the Boston Consulting Group noted. Skilled, educated workers, many of whom have debt out their ears from getting said education, are expected to work for $10 an hour?
“It’s easy to understand every perspective in this drama,” Davidson writes, but as usual he finds it much easier to relate to the bosses than to the workers.
Which is perhaps why Davidson takes “weakened unions” as a fact of life, rather than a result of years and years of sustained attacks on unions from all angles, from the courtroom to Congress to the shop floor. “The social contract has collapsed” is a passive-voice monstrosity that masks the reality that the workers kept up their end of the bargain and indeed conceded time and again (witness the Hostess story for a perfect example). The contract didn’t collapse of its own weight, it was violated again and again.
Davidson could find experts and a boss to quote, but couldn’t go find, say, a union manufacturing worker to discuss, say, the last twenty or thirty years of attempts by the bosses to force down wages, turn pensions into 401(k)s, cut back on healthcare contributions, and lay off workers entirely to ship jobs to China.
The last paragraph, where Davidson’s argument collapses entirely as he lets the boss steer him into the neoliberal blogger’s favorite hobbyhorse, is really special. Education is the problem! Education will save us! He conveniently neglects to mention that $10 an hour starting salary from just the previous page. Hell, I’m surprised that he didn’t find a way to outright blame teachers’ unions for the fact that “too few graduate high school with the basic math and science skills that his company needs to compete.”
As Seth Ackerman pointed out, “competitive” wages is a stick applied to workers by neoliberal writers and opinion leaders to remind the proles of their place. The wage that Davidson’s pet boss is offering is uncompetitive even in a country where real wages are debased—nobody will take the jobs he’s offering at the pay rate he’s offering them.
Yet Davidson, who wholeheartedly believes in free markets, has to find something else to blame for the failure of employers to offer a wage that workers will take. Enter the favorite punching bag of the well-educated pundit class: public schools.
You see, if those schools were just cranking out workers with the right math and science skills, we’d be able to compete! (Which, in this case, means “get workers to take lousy $10 an hour jobs”.)
Here’s the thing: if public schools were actually graduating close to 100% of the students they taught with the precise math and science skills that Davidson and his pet boss want, they’d still be “competing” for the same lousy $10 an hour jobs. In fact, the glut of skilled workers would most likely push those wages down, because even though, as Price pointed out, the “shortage” of skilled workers hasn’t seen a rise in wages for those skilled jobs, we most certainly have seen downward pressure on wages as unemployment has remained high.
In other words, we don’t need more educated workers until we have the good jobs to offer them.
Education is a great thing for its own sake. I want to see free higher education for all who want it. But even without the millstone of student debt around the necks of young people, $10 an hour jobs are not going to fix the economy. As Heidi Shierholz, Natalie Sabadish and Hilary Wething at the Economic Policy Institute pointed out in a recent report, young people still have few opportunities, face high unemployment and even higher underemployment.
But that’s a scary thought, and so even though Davidson starts off heading in that direction, he screeches to a halt and turns off down the reliable path of calling for “education”, never mind that his conclusion almost completely contradicts the points he’s made earlier in the piece.
Because if he were going to open up a real discussion about low wages and skilled workers and outsourcing, he’d perhaps have to admit that the market solutions he favors won’t fix these problems.
In an email to HuffPost, Dawn Bess in Missouri writes:
“No one is striking here. Missouri is an ‘at will’ employment state and the employers pay the unemployment insurance. It no longer is deducted from our paychecks like it was 5 or 10 years ago, so if you are fired in Missouri for ANY reason that your employer can conjure up, the state denies us unemployment compensation. We can file a protest but the state always takes the employer’s side and we lose. It’s a horrible situation here in Missouri and everyone is terrified of losing their jobs for any reason because the state has no qualms about leaving us penniless and homeless. There is no security net in MO for workers who lose their job. So short of the long, no, there are no strikes here.”
More than 2 million Americans stand to lose their jobless benefits unless Congress reauthorizes federal emergency unemployment help before the end of the year.
The people in danger of having their unemployment checks cut off are among those who have benefited least from the slowly improving job market: Americans who have been out of work longer than six months.
For the third consecutive week, initial unemployment claims have inched lower, reinforcing the larger impression that the job market continues to steadily improve. The new figures from the Department of Labor point to the second lowest level for new claims since July, though Superstorm Sandy may have skewed the results.
Applications for U.S. unemployment benefits dropped by 8,000 to a seasonally adjusted 355,000 in the week ended Nov. 3, a number that was distorted by hurricane Sandy. Initial claims from two weeks ago were unrevised at 363,000, based on more complete data collected at the state level, the Labor Department said Thursday. Economists surveyed by MarketWatch expected claims to decline to 365,000, but they warned that the storm could make the data unreliable for a few weeks.
To reiterate the point I make every Thursday morning, it’s worth remembering that week-to-week results can vary widely, and it’s best not to read too much significance into any one report.
In terms of metrics, when jobless claims fall below the 400,000 threshold, it’s considered evidence of an improving jobs landscape, and when the number drops below 370,000, it suggests jobs are being created rather quickly. We’ve been below the 370,000 threshold four of the last six weeks, and nine of the last 15 weeks.
And with that, here’s the chart showing weekly, initial unemployment claims going back to the beginning of 2007. (Remember, unlike the monthly jobs chart, a lower number is good news.) For context, I’ve added an arrow to show the point at which President Obama’s Recovery Act began spending money.
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Unemployment rates fell in nearly all large U.S. cities in September from August, a sign that recent jobs gains have been widespread.
The Labor Department says rates declined in 355 of the 372 metro areas, the most since April. The report also shows that nearly half of cities now have unemployment rates below 7 percent.
And the number of areas with unemployment rates above 10 percent dropped to 35. That’s down from 84 a year ago.
Rates rose in only 11 cities and were unchanged in six.
Nationwide, the unemployment rate fell to 7.8 percent in September. It was the first time the rate has fallen below 8 percent since January 2009 President Barack Obama’s first month in office.
Unlike the national numbers, the metro rates aren’t adjusted for seasonal patterns. Much of the decline likely reflects school-related employees, such as bus drivers and cafeteria workers, who returned to work.
The fact that the economy has continued to improve and unemployment has continued to decrease DESPITE all the blocked bills in Congress just proves what a competent economic leader Obama is. Imagine what he could do with a non-obstructionist Congress.
Oh our government…Truly the most functional and most effective in the world.
REBLOG this and never forget it.
THIS is what frustrates me the most about people who complain that Obama was ineffective. If you consider the childish, playground-bully tactics the GOP adopted, it’s astounding he got as much done as he did.
The land of the free~
i wish i could show this to my dad.
For those who can’t watch clips online, Jake Tapper noted a clip from the vice presidential debate in which Paul Ryan said the unemployment rate is going up “all around America” — an argument that happens to be wrong. The host asked Portman a simple but important question: “Now, senator, this has been weak economic recovery, without question, but it is a recovery, and unemployment is going down, just as a factual matter. Why would Congressman Ryan, in defiance of facts, suggest otherwise?”
To which Portman responded:
“I think that what he was saying was the truth: which unemployment is higher today than when the president took office. Unfortunately, in the meantime, we’ve created net zero jobs, Jake.”
This is genuinely remarkable. Ryan was caught presenting a false claim to the nation, and asked to explain why, one of the Romney campaign’s leading surrogates told a national television audience, in effect, “The lie is accurate.” When the book is written on the evolution of post-truth politics, this anecdote should be in the first chapter.
As an objective matter, unemployment is lower today than when the president took office, and we’ve seen a net increase in job creation. Portman — a sitting U.S. senator and former budget director — surely knows this, but chose to say the exact opposite. Why? Because he thinks he can get away with it. Post-truth politics is liberating that way.
You see, Portman doesn’t like our reality, so he has no qualms about making up his own version of facts, and asking Americans to believe him — even though he’s blatantly, shamelessly lying.
Putting aside all other considerations, it’s just not healthy for a political system when one side of the political divide decides to substitute one version of reality for another. Words, facts, arithmetic, and objective truths must maintain some sort of meaning or our basic ability to have a political conversation will deteriorate into chaos.
from The Maddow Blog, via slacktivist.
According to the Bureau of Labor Statistics, the number of people with full-time jobs increased by 838,000 in September to 115.2 million, while the number of people with part-time jobs declined by 26,000 to 27.7 million.
In other words: All of the gains in employment were due to full-time jobs.
Joseph Stiglitz, a Nobel Prize-winning economist and former chairman of the Council of Economic Advisers under President Bill Clinton, responded Saturday to baseless allegations that the Obama administration may have manipulated the Bureau of Labor Statistics’ monthly jobs report to make it look better than it actually was, calling those allegations “literally absurd.”
In an interview on Up w/ Chris Hayes Saturday, Stiglitz said the accusations leveled by Republicans and their supporters on Wall Street — including Rep. Allen West of Florida, former General Electric CEO Jack Welch and former Republican presidential candidate Steve Forbes — were outlandish and contradicted a broad consensus among economists of all party affiliations that the jobs numbers are not influenced by political calculations.
“No president, maybe except Nixon, would actually try to change what the Bureau of Labor Statistics does,” Stiglitz said. “These are really independent statistical agencies, and the idea that they would do that is, I say, literally absurd.”