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Thursday, January 06, 2011

Before you get optimistic over those job numbers...
Posted by Jill | 5:21 AM
I have no doubt that the Obama administration will start crowing about the job creation numbers under its watch. The reality, however, is that the jobs being created are not the kind of support-a-family, keep-you-in-the-middle-class jobs. No, the new job market in the U.S. is a job market specifically designed to work everyone to death in their new status as working poor:
Did you hear the happy news? Dollar General stores will hire 6,000 people this year. Yes America, hiring is back!

Actually, curb the enthusiasm. This isn't the stuff that robust middle class recoveries are made of. According to Payscale.com, the Dollar General chain pays its assistant managers $9.22 an hour and store managers $11.51 an hour. Cashiers and sales associates make barely over minimum wage. We're talking about thousands of new jobs between $20,000 and $30,000 a year.

It's a sign of the times. Low-wage jobs, including everything from retail sales associates to home health aides, are the bread and butter of our employment boom, while middle income jobs are on the decline.

Among the top ten occupations projected to have the largest numerical growth in the next decade, seven pay median wages under $30,000 a year, including food preparers and servers earning $16,000, and retail and home care workers who make $20,000. Home aides and retail workers are expected to add about 1.4 million positions this decade while middle-class manufacturing jobs are projected to lose more than a million jobs.

This is not the kind of job swap you want to see in a world-leading economy. Peter Creticos, president and executive director for the Institute for Work and the Economy, calls it the "down waging" of American jobs, and he fears it has and will continue to hurt the economy, blunt innovation and impoverish society at large.

"We're not growing the middle, so people on the bottom have no where to go and we're putting downward pressure on good skilled jobs for those in the middle," he said. The individuals holding jobs paying near-poverty wages will be able to find work, he continued, but making ends meet will be a struggle for a growing segment of the working population. Nearly a third of working families are struggling to buy groceries and pay utility bills, according to a recent report by The Working Poor Families Project. Talk about making work not pay.

Low-wage jobs have always been part of the economic landscape, the same way every pyramid has a base. But in the last 30 years, wages at the bottom of the pyramid have barely budged but low wage jobs have grown. The Great Recession exacerbated this trend by creating a glut of needy workers who would accept even less money to get off unemployment, putting more downward pressure on lower wages.

How is the media handling this? Rather than ask how we can rescue tens of millions of underpaid workers, today's headlines pretend the real problem is greedy public sector workers. We are angry at teachers, government workers and autoworkers for the audacity of negotiating livable wages. (Remember the vitriol that spilled out against average, middle class autoworkers when the government was contemplating bailing out the auto industry? Even bankers didn't feel such rage from the public.) It's open season on teachers and government employees, especially those who are unionized and have been able to ensure a fair wage and benefits and actually live the American dream.

If you think the last three decades have been bad for unions, wait another three months. Across the country governors are trying to strip public employees of collective bargaining rights. John Kasich, the new Republican governor of Ohio, will try to take away a teacher's right to strike. "They've got good jobs, they've got high pay, they get good benefits, a great retirement. What are they striking for?" he said, as reported by the New York Times. To which, one must respond: What's wrong with fighting for high pay, good benefits and a great retirement?

Perhaps Dollar General's 6,000 new hires can take solace in a thin silver lining. At least they know politicians won't use their $20,000 salaries as political piƱatas.

When I finally left my early "career" in "the exciting world of retail management" in 1980, I was making the princely sum of $12,500 a year. That was thirty years ago. In order to have the buying power that my salary in 1980 had, you would need a salary of $33,192.20 (calculated here). Today, a store manager of a Dollar General, if working 52 weeks a year and if he/she is an exempt employee (which as a manager is probably the case), that $11.51 an hour amounts to an annual salary of $23,940, or $9,015.67 in 1980 dollars. In other words, managing a Dollar General today pays even less -- about 25% less -- than I was paid in 1980 to manage the hosiery and costume jewelry departments at Bamberger's.

This is the reality today for Americans who are not bankers or corporate executives:
The decade just concluded is the first in which Americans, on average, have seen their incomes decline. Median household income increased by about $4,000 per decade in the 1980s and '90s: from $42,429 in 1980 to $46,049 in 1990 to $50,557 in 2000 (in 2007 dollars). In 2009, the most recent year for which we have figures, it had declined to $49,777 - but 2009, of course, was a year of deep recession. If we go back to the peak year of the last decade, 2007, we find that median household income was just $50,233- roughly $300 less than it had been in 2000.

Until the housing and financial bubbles burst, of course, we enjoyed the illusion of prosperity through the days of wine and credit. Now we stand on unfamiliar terrain in which almost all the signs of long-term economic health point downward. Our private sector isn't creating jobs at a rate commensurate with our increasing population, much less at a level to significantly reduce unemployment. The share of our civilian population employed has dropped to 58.2 percent - the lowest level since the early '80s, when far fewer women had entered the workforce.

Those who believe our downturn is cyclical argue that job-creating public spending can restore us to prosperity, while those who believe it's structural - that we have too many carpenters, say, and not enough nurses - believe that we should leave things be while American workers acquire new skills and enter different lines of work. But there's a third way to look at the recession: that it's institutional, that it's the consequence of the decisions by leading banks and corporations to stop investing in the job-creating enterprises that were the key to broadly shared prosperity.

Our multinational companies still invest, of course - just not at home. A study by the Business Roundtable and the U.S. Council Foundation found that the share of the profits of U.S.-based multinationals that came from their foreign affiliates had increased from 17 percent in 1977 and 27 percent in 1994 to 48.6 percent in 2006. As the companies' revenue from abroad has increased, their dependence on American consumers has diminished. The equilibrium among production, wages and purchasing power - the equilibrium that Henry Ford famously recognized when he upped his workers' pay to an unheard-of $5 a day in 1913 so they could afford to buy the cars they made, the equilibrium that became the model for 20th-century American capitalism - has been shattered. Making and selling their goods abroad, U.S. multinationals can slash their workforces and reduce their wages at home while retaining their revenue and increasing their profits. And that's exactly what they've done.

Our economic woes, then, are not simply cyclical or structural. They are also - chiefly - institutional, the consequence of U.S. corporate behavior that has plunged us into a downward cycle of underinvestment, underemployment and under-consumption. Our solutions must be similarly institutional, requiring, for starters, the seating of public and worker representatives on corporate boards. Short of that, there will be no real prospects for reversing America's downward mobility.

What I would ask our Republican congresspeople, and those like Sharron Angle, who believes that Americans are "spoiled" for their heinous crime of wanting a job that pays a living wage, is this: How do you expect this country to be successful in the future when even those fortunate enough to be able to go to college are going to find themselves emerging into the job market with what is essentially a mortgage hanging over their heads and a job market that consists of low-wage service jobs that pay less than I was making during the Arab oil embargo and recession of the late 1970's? I'm sorry, but 1% of people who are preposterously wealthy do not spend enough money to keep an economy the size of this one afloat.

Last weekend we were watching a documentary called Made in Jamaica, about the rise of reggae as a musical expression of the pain and rage of being poor in a developing nation:

MADE IN JAMAICA: Movie Trailer. Watch more top selected videos about: MADE IN JAMAICA, Jerome Laperrousaz

What purports to be a celebration of the evolution of a nation's music has as its dark underbelly the reality of Jamaica -- a country in which great wealth exists alongside intractable poverty, with very little in between. I work with a Jamaican woman with whom I chat frequently about sociopolitical issues. She talks of the distrust Jamaicans have of their government, or their conviction that the government only serves the interests of the wealthy, of the reality that what middle class there is in Jamaica tends to come here, and of the pockets of no hope and no future that exist in the urban areas of Kingston. While watching Made in Jamaica, I noted to Mr. Brilliant, "This is America's future." Because we too are headed down the road of extreme wealth existing alongside grinding poverty, with nothing in between. We're headed in that direction, but most Americans don't know it yet. So they dance to Chris Christie's tune of "blame public unions and teachers" and new Wisconsin Senator Ron Johnson and North Carolina Senator Richard Burr's rhythm section, who claim that the unemployed are "too lazy" to take jobs that pay less than I made thirty years ago. They don't bother to note that these are people whose jobs have been eliminated and either sent overseas or put on the shoulders of the still-employed, who are now working themselves to an early grave because of the increased workload, or as the financial community puts it, "productivity".

Our slide to third world nationhood is now inevitable, helped along by greedy Republicans, hapless Democrats too weak to put up a fight, or too willing to pocket the table scraps of corporate money left over after Republicans stuff themselves at the corporate cash groaning board, and a willfully ignorant and stupid population that thinks that greedy grifter Sarah Palin is just like them, that Chris Christie's bullying is actually "strength" and that they simply can't be bothered finding out how their leaders are slowly killing them because after all, Jersey Shore is on.

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