|"Only dull people are brilliant at breakfast"
|"The liberal soul shall be made fat, and he that watereth, shall be watered also himself."
-- Proverbs 11:25
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 piñatas.
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.