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"Low-Wage Work - America's Broken Promise,"

by Beth Shulman The record-setting jobless recovery is sobering news. But just beside it lies a situation that is even more ominous and disturbing. Millions of Americans are working hard every day, yet their jobs fail to provide the means for a decent life. For these women and men, the basic promise of America—if you work hard, you can earn enough to support yourself and your family—has been broken.May/June 2004 issue of Poverty & Race

The record-setting jobless recovery is sobering news. But just beside it lies a situation that is even more ominous and disturbing. Millions of Americans are working hard every day, yet their jobs fail to provide the means for a decent life. For these women and men, the basic promise of America—if you work hard, you can earn enough to support yourself and your family—has been broken.

More than 30 million Americans—one in every four workers—work in jobs that pay less than $8.70 an hour. Working full time, that translates at most into an annual income of $18,100, the government-defined poverty level for a family of four. But inadequate wages are only one of the problems. These jobs are also the ones that offer the fewest benefits and the most rigid and arduous working conditions. These workers must struggle to take care of themselves and their families, not in spite of their jobs but because of them.

What are today’s low-wage jobs? Contrary to the dominant myth that most low-wage jobs are the ones you see in your neighborhood McDonalds, fast-food jobs constitute less than 5% of all low-end jobs. Low-wage workers are all around us. They are nursing home workers and home health care workers who care for our mothers and fathers. They are poultry processing workers who bone and package the chicken we eat for our dinner. They are retail store workers who help us in department stores, grocery stores and convenience stores. They are hotel workers who ensure that the rooms we sleep in on our business trips and family vacations are clean. They are janitorial workers who empty our wastebaskets after dark. They are catfish workers who process the fish we enjoy. They are 1-800 call-center workers who answer our requests and take our orders. They are security guards that help make us safe. They are ambulance drivers who respond to our emergencies. And they are childcare workers and educational assistants who educate and care for our children.

Low-wage workers supply our most essential services. Yet these hardworking men and women are subject to degrading conditions. A meat processor may stand all day in puddles of water, only to get docked for a bathroom break. Janitors can work for years with no paid vacations and with constant back pain from lifting trash. Call center workers face constant surveillance by their employers in the midst of pressure to reach strict production quotas.

Most low-wage workers receive no health or retirement benefits, no family or sick leave. They cannot afford quality childcare, let alone college tuition. They are often subjected to forced overtime, abrupt schedule changes, time clocks and humiliating drug tests. They rarely get training, promotions, raises, flextime or job security. In return for accepting all this for years on end, they are the least likely to qualify for unemployment insurance, yet most likely to be injured on the job. These hardships irreparably harm these workers’ children while at the same time crippling our communities, our economy and our democracy.

These conditions mock the American dream of working hard for a just reward. Adding to this is the harsh reality that we can expect these labor-intensive industries that now pay poorly to be the largest-growing sectors of the economy. While many tout the fast-growing high-tech sectors, growth in low-wage occupations will dwarf those jobs. Six of the ten occupations anticipated to have the largest real job growth through 2012 are in these low-wage occupations—retail salespeople, customer service representatives, food service workers, cashiers, janitors, wait staff, and nurse’s aides, orderlies and attendants.

Many believe that the workers in these jobs are teenagers, high-school dropouts or illegal immigrants. Yet the truth is that they are in the very mainstream of our economy and our lives. Nearly two-thirds are white, a majority are female and most are adults with family responsibilities like the rest of us. Only 7% are teenagers. Most have a high school education, a third have at least some postsecondary education and 5% have a college degree. Low-wage workers are better educated today than in prior decades.

Saying that two-thirds of the low-wage workforce is white, however, masks a harsh reality. Blacks and Latinos are over-represented in this group relative to their participation in the overall workforce. In fact, the proportion of minority workers earning a low wage is substantial: 31.2% of blacks and 40.4% of Latinos, in contrast to 20% of white workers.

It is no accident that minorities command a disproportionate share of low-paying jobs. Discrimination in the U.S. workplace has historically played a role in excluding them from higher-paying positions. Even within the low-wage sector, historically disadvantaged groups occupy the lowest rungs of the system. White males earn more than white females, and white females earn more than both black and Latino males and females with the same skills and jobs. Nonwhites with comparable levels of education earn less and are less likely to be working than whites. Within occupational groups, race plays a role in determining job levels and thus factors such as pay, access to health and pension benefits, and the degree of autonomy on the job. More than two-thirds of Latino workers, for example, are without employer-sponsored health insurance, according to a recent Commonwealth Fund report, even though they had stable employment. And employers link race and gender with job suitability that locks in this stratification in the low-wage workforce.

Immigrants generally work in the lowest rungs of the low-wage workforce. They are more likely than natives to be food-preparation workers, sewing machine operators, parking lot attendants, housekeepers, waiters, private-household cleaners, food processing workers, agricultural workers, elevator operators and janitors, operators, fabricators and laborers. These occupations have the greatest number of jobs that pay below $8.70 per hour. Few of their employers provide health insurance, pension plans, or sick or family leave, and these jobs have the least advancement possibilities.

Forty-three percent of foreign-born workers were employed in low-wage jobs in 1997. The economic gap between today’s immigrants and native-born workers is three times larger than it was during the last major wave of immigration at the turn of the 19th century. Male immigrants today typically earn only 77% of what natives earn, with Mexican-born men earning less than half.

Immigrants are also funneled into some of the most hazardous and unhealthy jobs, such as roofing, trench digging and carrying heavy materials. Latino immigrants, for example, die from workplace injuries at a 20% higher rate than either blacks or whites. Certainly, English-language proficiency and educational barriers play a part in limiting immigrant job options, especially for a notable proportion of Latino immigrants. But there is a more pernicious reason why immigrants face the most abysmal conditions: their vulnerability. Immigrants are less likely to know their rights, and undocumented workers fear deportation if they complain about workforce abuse.

Workers with less education find it difficult to find quality jobs in the United States. Yet, in spite of an increase of white males into the lower end of the labor market, there still exists a caste-like system, with women, minorities, and immigrants at the bottom of this labor force.

Too many economists, policymakers and politicians would assert that the plight of these low-wage workers is merely the workings of an efficient market, a matter of supply and demand. These low-wage jobs are not, however, the result of an efficient market’s “invisible hand,” but derive from political, economic and corporate choices that have undercut workers’ ability to have any control over the conditions under which they work. Over the past quarter century, a variety of political, economic and corporate decisions have undercut the bargaining power of the average worker, especially those in the lower strata of the workforce. Those decisions include the push to increase global trade and open global markets; the increased entry of immigrant workers into the United States; government efforts to deregulate industries that had been highly unionized; Federal Reserve policies; and a corporate ideological shift that eliminated the post-war social contract with workers and emphasized a principle of maximizing shareholder value. These decisions contributed to the deterioration in low-wage conditions and a worsening of disparities in income and wealth.

During this same period, the most vulnerable workers were deprived of many of the institutions, laws and political allies that generally helped to counterbalance these forces. Government and corporations, instead of working to shore up institutions that had historically helped these workers and given them power, attacked and weakened them. Liberal allies who historically had championed workers’ interests mostly sat silent. Unions were in decline, and the right to organize was subjected to government and corporate assault. When workers tried to improve their conditions through organizing a union, they were met with intimidation or worse. In the 1950s, a few hundred workers each year were fired, harassed or threatened for trying to organize a union. By the 1990s, the number exceeded 20,000. In 1979, 25% of the workforce was unionized — today, only one-tenth.

Minimum-wage laws, fair employment and labor laws were all undercut. Today, the $5.15 per hour minimum wage represents a 21% cut in purchasing power from 1979. The last increase in the minimum wage was seven years ago. Unemployment insurance covers fewer and fewer low-wage workers. Between 1950 and 1980, about one-half of the unemployed received unemployment benefits. By the mid-eighties, because of program changes that tightened eligibility requirements, only a third received benefits. Most of those not covered were lower-wage workers who did not meet the minimum hours and earning requirement that most states impose for eligibility.

The very existence of these low-wage conditions should shame us as a nation. But today, we can make different choices that would improve these jobs and the lives of these workers and their families. Now it is time to establish a new compact between working Americans and employers and government. We must guarantee that everyone who works hard can have the resources to provide the basics for themselves and their families.

What can we do—
  • Re-establish a wage floor, so that employers cannot sink below it. Corporations will then have to compete in quality and innovation, not in a race to the bottom of workers’ wages and benefits. We must raise the minimum wage.
  • Ensure that all working Americans and their families are provided with health insurance. It is not fair that employers doing the right thing must compete against those that profit from neglecting their workers’ health. Taxpayers should not have to pick up the bill at emergency rooms for profitable companies that offer no health insurance or pay their workers too little to afford the company plan.
  • We can insist as well that our elected officials offer incentives to employers who provide quality jobs, and we can deny tax benefits, public dollars and project contracts to those that do not.
  • Finally, it takes reasserting the right to organize unions in the United States. Today, many workers who try to organize a union face employer harassment or discharge. It’s illegal, but the laws are not enforced and are so weak that they fail to deter unlawful employer conduct. Workers should get to choose whether they want to unionize, without employer interference, let alone intimidation.

In the past, our society has established laws to prevent child labor, to ensure that older Americans would not be impoverished or go without health care, and to prevent discrimination by race, religion, sex or national origin. Now it is time to prevent employers from competing on the basis of impoverishing their workers. We can as a nation choose to make rules that provide a fair economy for all Americans.

Beth Shulman is the author of The Betrayal of Work: How Low-Wage Jobs Fail 30 Million Americans (2003, The New Press). She is the director of a low-wage work project and a consultant. A lawyer, she was formerly Vice-President of the United Food and Commercial Workers International Union.

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