Are No Low Wage Jobs, and the Poverty Line Does Not Exist
September 25, 2002
By David Swanson
On Tuesday, September 24, 2002, the Census Bureau is expected
to release its 2001 data on poverty and income. No doubt we
will see an increase in the number of families living below
the so-called poverty line, and no doubt part of the explanation
that experts will give for this is the continuing shift in
our economy away from high-paying manufacturing jobs and toward
low-paying service jobs.
We are supposed to believe that making hotel room beds, waiting
tables, running cash registers, and caring for the sick and
the young and the old are inherently low-paying professions,
whereas assembling parts on an assembly line is an inherently
high-paying profession. But why? Is this supported by an argument
about the value of these jobs to a society or the value that
they can obtain from any market? I would like to suggest that
there is no inherent or permanent reason why service jobs
cannot be high paying, that in fact the causes that make more
jobs today low paying have little to do with the type of work,
and that imaging a radically different economy might help
us create it.
But first, let's address the matter of the "poverty line."
Here's how it's calculated. The government decides what it
costs to achieve minimal nutrition through food purchases
and multiplies this by three. That gives you the poverty line
for a given sized family. There is no adjustment for region.
However, families' food expenses tend to be one-seventh of
their total expenses, not one-third. This means that you can
be living well above this misleading "line" and still have
to choose between paying the rent and putting food in front
of your family, or between buying medicine for your children
and purchasing child care for them.
Of course, you may believe that you are in this situation
because you work at Wal-Mart and Blockbuster, and that these
are "low-wage service jobs."
No, they aren't. They are service jobs that these and many
other companies have managed to keep low-wage through legal
and illegal union-busting practices. Wal-Mart shows job applicants
anti-union videos before even hiring them and forbids not
only talk of organizing but any non-work-related talk at all.
It also shuts down any store that succeeds in unionizing.
Eighty percent of organizing efforts at companies across
the country meet with illegal resistance in violation of the
internationally recognized right to organize. Then there are
the legal techniques of mandatory anti-union meetings and
intimidation, not to mention right-to-work laws.
In 1953, 35 percent of the workforce was unionized, compared
to 13 percent today. Back then, over 40 percent of the private
workforce was unionized, compared to less than 10 percent
of public employees. Now those numbers are roughly reversed.
The percentage of private employees who have a union has been
cut by 75 percent. As a direct result, the tendency of average
compensation to rise with increases in productivity ended
in the mid-1970s, since when productivity has continued to
climb, while average wages and the legal minimum wage have
dropped off. There are 50 million workers in the U.S. who
want a union and don't have one, according to polls.
OK, you say, but how can retailers and fast-food shops pay
unskilled service workers $40 per hour? They can't even pay
$8 an hour without going broke.
That's not even true today. The growing fast-food chain called
In & Out Burger starts part-time workers at over $8 with
paid vacation and pension payments, benefiting from reduced
turnover, increased productivity, and increased purchasing
power. These workers can afford to sleep at night rather than
going to a second job, and they can afford to buy themselves
hamburgers if they choose.
There was a time when car production was considered an inherently
low-wage job. That was before Henry Ford saw the wisdom of
turning employees into customers and before the UAW made that
idea a reality by organizing industry-wide – the way organizing
needs to be done today.
Factory work is still not a consistently high-paying job.
That's why meat plants are now almost all in union-weak states.
That's why factories of all sorts move south, then south of
the border, then across the Pacific. High wages follow worker
power, not type of work.. Look at the construction industry
where wages commonly vary by 500 percent depending on whether
workers have US citizenship and a union or live under the
constant threat of deportation. Look at farming, where once
prosperous small business people are being turned into serfs
and finding they have more in common with migrant day laborers
than with the corporations that now run the show.
But, you might ask, how can pay not follow skill? Well, you
tell me. Have wages fallen for janitors because 30 years ago
they all cleaned better than they do now? And by what measure
do you maintain that a receptionist or a preschool teacher's
skills are less skillful than the skills of a textile worker?
Some might maintain quite reasonably that the people-skills
of many service workers are some of the most difficult around,
requiring the most experience to perfect.
All right, but how do you organize part-time and temporary
workers at shops with 300 percent yearly turnover? How do
you organize maids working in separate McMansions isolated
from each other? Well, look at the home healthcare workers
recently organized in California and ask the SEIU how they
did it. There are new things under the sun, and we sure as
hell need some.
Yes, someone will say, but there are Market rules, economic
consequences. You'll cause inflation, you'll throw the prices
of goods out of whack, you'll drive up unemployment. Hogwash.
We can't of course get to a high-wage service economy this
year or without a lot of interwoven changes, but we can get
there, and unless our economists start using their imaginations
to point the way the future will be grim.
As far as throwing prices out of whack, there clearly is
no whack to be thrown out of. The relative prices of different
goods is in constant flux, often as a result merely of the
relative greed of a small number of people. Clearly, recent
electricity bills in California had more to do with Ken Lay's
taste in luxuries than with any uncontrollable market force.
The price of housing has skyrocketed as a result of developers'
greed and legislators' indifference. Alan Greenspan doesn't
seem to be panicked by this the way he is whenever unemployment
gets too low.
It is widely understood now that higher minimum wage standards
have much less impact on unemployment than had long been rumored,
and that low unemployment does not have the dire effects on
the economy that some continue to warn of. The official unemployment
rate, of course, is about as accurate a measure as the official
poverty rate. Things are generally worse than we are being
It's about time we recognized that, and started to think
about the reasons why - and how - to change them.