Four Myths About Low-Wage Work

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Four Myths About Low-Wage Work

 

 

By Beth Shulman, Alameda Times-Star

August 29, 2003

 

As the presidential campaigns seek definition, one pivotal issue remains hidden

from view. It is potentially huge, especially for Democrats, because it involves

their natural constituents, and it addresses core issues of the economy, social

justice and fairness. The issue is low-wage work. Fully 30 million Americans –

one in four U.S. workers – earn $8.70 an hour or less, a rate that works out to

$18,100 a year, which is the current official poverty level in the United States

for a family of four. These low-wage jobs usually lack health care, child care,

pensions and vacation benefits. Their working conditions are often grueling,

dangerous, even humiliating.

 

 

 

At the same time, more and more middle-class jobs are taking on many of these

same characteristics, losing the security and benefits once taken for granted.

 

 

 

The shameful reality of low-wage work in America should be on every Democrat's

cue card as a potential weapon to be used against the Republicans' rosy economic

scenario. But so far it isn't. Why not? One reason may be four long-standing

myths that have for years drowned out a rational discussion of what should be a

national call to conscience:

 

 

 

MYTH 1: Low-wage work is merely a temporary step on the ladder to a better job.

According to the American dream, if you work hard, apply yourself and play by

the rules, you will be able to earn a decent living for yourself and your

family. If you fail to move up, you must be lazy or incompetent.

 

 

 

THE TRUTH: Low-wage job mobility is minimal. Low-wage workers have few career

ladders. Those of us lucky enough to have better-paying employment depend on

them every day. They are nursing home and home health care workers who care for

our parents; they are poultry processors who bone and package our chicken; they

are retail clerks in department stores, grocery stores and convenience stores;

they are housekeepers and janitors who keep our hotel rooms and offices clean;

they are billing and telephone call center workers who take our complaints and

answer our questions; and they are teaching assistants in our schools and child

care workers who free us so that we can work ourselves.

 

 

 

In a recent study following U.S. adults through their working careers, economics

professors Peter Gottschalk of Boston College and Sheldon Danziger of the

University of Michigan found that about half of those whose earnings ranked in

the bottom 20 percent in 1968 were still in the same group in 1991. Of those who

had moved up, nearly two-thirds remained below the median income. The U.S.

economy provides less mobility for low-wage earners, according to an

Organization for Economic Cooperation and Development study, than the economies

of France, Italy, the United Kingdom, Germany, Denmark, Finland or Sweden.

 

 

 

Today's economy is even more rigid. In many industries, such as insurance,

retail and financial services, wealthier clients are served by different

employees than lower-status customers. This makes it harder for the lowest wage

earners to move up. Some do, but this happens primarily in the manufacturing

sector, where the number of jobs continues to decline.

 

 

 

MYTH 2: Training and new skills solve the problem. Low-wage workers are said to

lack the necessary skills for better-paying work in our changing economy. What's

needed is retraining and better education for everyone.

 

 

 

THE TRUTH: The problem is that there are fewer better jobs to move into. The

percentage of low-wage jobs is growing, not shrinking. The growing sectors of

our economy are the labor-intensive industries. The two lowest-paid work

categories, retail and service, increased their share of the job market from 30

percent to 48 percent between 1965 and 1998. By the end of the decade, the low

end of the job market will account for more than 30 percent of the American work

force. There will be about 1.8 million software engineers and computer support

specialists, but more than 3.8 million cashiers.

 

 

 

According to the U.S. Bureau of Labor Statistics, half of all new jobs by 2010

will require relatively brief on-the-job training. Only three of every 10

positions currently require more than a high school diploma. Certainly, raising

skills and education levels will lead some workers to higher wages and better

jobs. But that approach will do little to improve the lives of most of the

hardworking women and men in the jobs that will continue to grow as a proportion

of our economy.

 

 

 

Just as important, those who denigrate low-wage work as " low-skilled " ignore the

reality of these jobs. A nursing-home worker must be compassionate, must pay

attention to detail and must possess psychological and emotional strength; a

call-center worker must have patience and must be able to command enough

information to handle questions and complaints; a security guard must be

dedicated, alert and conscientious. To say these workers need retraining to earn

more lets their employers off the hook for failing to compensate them

appropriately for their existing skills and duties.

 

 

 

MYTH 3: Globalization stops us from doing anything about this problem. Between

1979 and 1999, 3 million manufacturing jobs vanished as global trade brought in

textiles, shoes, cars and steel produced by overseas labor. In June 2003 alone,

56,000 manufacturing jobs were lost. American employers must keep wages and

benefits low if they are to compete in the global marketplace.

 

 

 

THE TRUTH: Very few low-wage jobs are now in globally competitive industries. It

is true that global trade has had a profound impact on our economy and on

American workers. But companies in Beijing are not competing with child care

providers, nursing homes, restaurants, security guard firms and janitorial

services in the United States. Checking out groceries, waiting on tables,

servicing office equipment and tending the sick cannot be done from overseas.

 

 

 

Employers and politicians use globalization as an excuse to do nothing for

low-wage workers, scaring them into accepting lower pay, fewer benefits and less

job security. It is invoked to justify reduced social spending and less

workplace regulation, and workers believe they are powerless to object. Yet not

only does globalization fail to apply to most of America's low- wage jobs, other

industrialized countries facing the same global competition have chosen

differently: They provide social safety nets, notably including guaranteed

health care. As a result, according to a 1997 study by Timothy Smeeding of

Syracuse University, Americans in the lowest income brackets have living

standards that are 13 percent below those of low-income Germans and 24 percent

below the bottom 20 percent of Swedes.

 

 

 

MYTH 4: Low-wage jobs are merely the result of an efficient market. The economy

is a force of nature, and we as a society have little control over whatever

difficulties it creates.

 

 

 

THE TRUTH: The economic world we live in is the result of our creation, not

natural law. America's low-wage workers have little power to change their

conditions because of a series of political, economic and corporate decisions

over the past quarter-century that undercut the bargaining power of workers,

especially those in lower pay grades.

 

 

 

Those decisions included the push to increase global trade and open global

markets, changes in immigration law, the deregulation of industries that had

been highly unionized, Federal Reserve policies focused on reducing inflation

threats, and a corporate ideological shift that eliminated America's postwar

social contract with workers and emphasized maximizing shareholder value. Those

decisions worsened conditions in low-wage jobs and exaggerated disparities in

income and wealth.

 

 

 

America's most vulnerable workers have also lost many institutions, laws and

political allies that could have helped counterbalance these forces. In the

1950s, the number of American workers who were fired, harassed or threatened for

trying to organize a union was in the hundreds a year. According to Human Rights

Watch, by 1990 that number exceeded 20,000. In 1979, one-fourth of

private-sector workers were unionized; only 11 percent are today.

 

 

 

At the same time, the purchasing power of the federal minimum wage fell 30

percent during the 1980s. Despite minimal increases in the 1990s, according to

the Economic Policy Institute, the value of the current minimum wage of $5.15

per hour is still 21 percent less than it was in 1979.

 

 

 

The richest country in the world should not tolerate such treatment of more than

a fourth of its workers. The myths of upward mobility and inevitable market

forces blind too many people to the grim reality of low-wage work. A

presidential campaign is the right time to begin a conversation on how to change

it.

 

 

 

Beth Shulman is a lawyer and author of " The Betrayal of Work: How Low-Wage Jobs

Fail 30 Million Americans, " to be published next month by the New Press.