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Our Low-Wage Nation |
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This is a crosspost from The Bonddad Blog.
Of the 144 million jobs in the United States, nearly one in three of the total pays low wages—and often does not include affordable health insurance, paid sick days or retirement coverage. That eye-opening information, provided in a new report by The Mobility Agenda, finds these $11.11-an-hour-or-less jobs also tend to have inflexible or unpredictable scheduling requirements and provide little opportunity for career advancement.
So maybe that’s why when Bush touts the nation’s low unemployment rate, few people outside Wall Street cheer. They are too busy working several jobs to make ends meet.
The Mobility Agenda, a special initiative of Inclusion, a virtual think tank affiliated with the Center for Economic and Policy Research, finds that since 2001, there has been a sharp decline in wages for workers at the bottom third of the wage scale. Worse, reviewing the evidence on economic mobility, the authors of Understanding Low-Wage Work in the United States conclude:
In the U.S. labor market, it is not possible for everyone to be middle class, no matter how hard they work. Moreover, it has been getting harder to do over time.
Oh, and about that middle class. A devastating report by Robert Pear in The New York Times March 5 documents the economic fragility of the U.S. middle class when it comes to paying for health care.
Seems that more than one-third of those without health insurance—17 million of the nearly 47 million—have family incomes of $40,000 or more, according to the Employee Benefit Research Institute, a nonpartisan organization. More than two-thirds of the uninsured are in households with at least one full-time worker. As Pear writes:
It is well known that the ranks of the uninsured have been swelling; federal figures show an increase of 6.8 million since 2000.
(The AFL-CIO supports universal health care, and last week, the AFL-CIO Executive Council approved a statement saying such a system should be built upon the nation’s most successful universal health coverage plan for seniors—Medicare.)
A confluence of forces is behind the sinking of the middle class. But one big factor is the disproportionate gain by corporations in the growing global economy. So wide is the gap, in fact, that even the denizens of economic world leadership, at their annual gathering in Davos, Switzerland, this year started humming a new refrain: Globalization isn’t working for everyone. According to The Wall Street Journal (subscription required):
Stagnating wages and rising job insecurity in developed countries are creating popular disenchantment with the free movement of goods, capital and people across borders.
In theory, less-developed countries win from globalization because they get jobs making low-cost products for rich countries. Rich countries win because, in addition to being able to buy inexpensive imports, they also can sell more sophisticated products like machine tools or financial services to emerging economies.
“The first win is there, but the second win is going to the owners of capital rather than labor,” says Stephen Roach, chief economist at Morgan Stanley.
Ouch. There’s that capital-and-labor dichotomy again. From Morgan Stanley, no less. Guess it didn’t go away with the 20th century after all.
Several key factors are fueling the inequities in globalization. One is the rapid growth of foreign direct investment by U.S. corporations to other countries—while internal investment is decreasing. According to economist Thomas Palley:
Since investment in the U.S. is critical for future economic prosperity, these patterns are troubling and provide evidence of how globalization and flawed policy are encouraging corporations to abandon America.
With regard to outward [foreign direct investment], part of the increase is attributable to affirmative improvements in emerging market economy prospects, but part is due to bad policy. The over-valued dollar has encouraged U.S. business to shift productive investments from the U.S. to both developing and other developed economies, while the lack of global labor and environmental standards encourages shifts to developing economies where standards are lower or even absent.
Another factor is the preferential tax treatment of foreign profits of U.S. corporations, which encourages outward FDI that displaces domestic investment. This speaks to repealing that provision.
Palley notes the U.S. Commerce Department recently launched an initiative to promote such investment, promising to actively court foreign companies. But the approach, while beneficial, also is “incomplete and inadequate.”
Cheerleading cannot substitute for fundamental policy change…the exclusive focus on [internal direct investment] is like one-hand clapping and completely misses the problem of investment off-shoring by U.S. corporations.
Another factor exacerbating the gap between what the wealthy are paid and everyone else is excessive CEO pay. We’ll discuss that in a couple weeks, when the AFL-CIO releases its Executive PayWatch report in early April.
8 Comments
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the more money the people make, the more the cost of living will go up. washington is to blame, its simple don,t spend more money than you earn. and fair trade
Still too many Ameicans with a Capatilistic mentality. They must now realize that the Republican strategy of giving ever more money and tax breaks to the richest American is just plain wrong. It is time for America to realize that all Workers must share equatibly in the wealth of this great Nation. This means guarenteeing a Living Wage for all Americans and Raising Taxes on the Richest so that they pay their fair share instead of getting a free ride.
Hellooooo, your union is out there pulling for more immigration and amnesty for the illegal ones already here and you are wondering why you have low wages or can’t find a job? What color is the sky in the world YOU live in? As long as we have the immigration levels that are rapidly spiraling out of control, we will have low wages and no jobs. Go take a look of the nationality of the workers in all the new subdivisions being built in the U.S., then find out how many have LEGAL papers to be in the U.S. and work here. The problem is not the rich failing to pay their taxes, it is corporate America wanting the cheapest possible labor that they can get so that they make the highest possible profit. The cost of a new house did NOT go down when illegal aliens started doing these jobs, it keeps going up. If you want a decent wage, get rid of the illegals, then corporate America doesn’t have that bargaining tool to fall back on. Go to http://www.NumbersUSA.com,VDARE.com,USABorderalert.com, or Grassfire.net to see the facts on what illegal aliens are doing to this country on a daily basis.
The illegal immigrants that work for less have brought down wages for workers in the labor sector while the employers have just gotten wealthier. Our unions need to stick up for Americans. I and my brother are both retired union workers and are sick and tired of politicians bending over backward for the hispanic votes to the point of sacrificing american workers who got us where we are today. We need heavy fines on employers who hire them, then deport the criminals and start a temporary worker program for the rest. No amnesty. No citizenship unless they enlist in the military.
In respose to Jan and Patriot: The economic system has been global since the 16th century, when British investors first sent indentured servants to Virginia to exploit natural resources. In about 1800 Thomas Jefferson ommented that businessmen have no loyalty except to profit, wherever they may find it. We can’t stop immigration, legal or otherwise, and expect our wages to go up. Businesses would just relocate overseas even faster than they are now. Right now businessmen can depend on our out-dated sense of national patriotism to divide us and make it possible for them to rule us all any way they see fit. What we have to do is stop blaming other workers and start organizing global unions. Make the word “International,” which is used by so many US unions, really mean something.
Kent,
Maybe if we didn’t reward corporations (tax wise) for relocating overseas they wouldn’t do it as much. It is very costly. The American middle class are the great consumers. Now that we are fighting for ALL jobs manufacturing, service, skilled professional, etc., Americans will pull together and refuse to do business with multi-national companies that have unfair hiring practices. We also need to stop foreign worker visas so all American professionals don’t become extinct like the American computer programmer.
Lower immigration levels. Moratorium on foreign worker visas. No services for ILLEGAL immigrants. A new bill was just introduced in the house that would not allow an employer to claim any payments for work performed given to illegal immigrants against their revenues, so that the taxes would be higher. I’d like to hear an analysis of that.
Finally, how can global unions possibly work given the great differences in the costs of living between the US and the other countries that would be in the labor pool. A living wage in one country would be a starving wage in another. Global?!? Its hard enough to get things right on a national level in this country. Global unions would be very corruption prone.
Keep it small, keep it local. Cooperate with other groups on common issues. That could work. I believe in the saying “Good fences make good neighbors. We are territorial by nature.
Tell me why then, that unions are supporting illegals in this manner?
http://seattletimes.nwsource.com/html/localnews/2003865077_drywall02m.html
The democrats in this country have already voiced their desire to entice illegals into the unions as a way to protect them from deportation and insure their livliehoods in employment…what about American workers who continue to be displaced by illegals?
The AFL-CIO has an obligation to AMERICANS, not ILLEGALS!!!
Why then are the unions supporting illegals like this?
http://seattletimes.nwsource.com/html/localnews/2003865077_drywall02m.html
The obligation of the unions should be to AMERICAN workers, not illegals !!!