Career Calling

June 8, 2014

The Wage Crisis

 

Jobs! Jobs! Politicians and TV talking heads have been saying we need more jobs since the financial crisis of 2008-2009. Well, now we have some good news about jobs. The American economy has made up all the jobs lost during the crisis. This would seem to be a positive trend. However, all jobs are not equal, especially when it comes to wages.

In today’s Chicago Sun-Times, Maudlyne Ihejirka has written a detailed account of this situation. She tells the story of an experienced child care teacher with a salary of 35,000 who was laid off and could only find a new job playing $12.25 an hour (a little more than $25,000 per year). 41% of job losses were in higher wage industries. Only 30% of new jobs have been generated in those industries. Hiring patterns complicate the problem. As I noted in a recent post, more companies are relying on long term contract and temporary employees to fill open positions. A graph accompanying Ihejirka’s article notes that temporary jobs were the leading source of job growth in the U.S. over the last year.

The one problem I have with the article is that it suggests that most of these jobs are at the minimum wage of $7.25. Many low wage workers make $8-$12 an hour, which is still not enough to raise a family or even survive as an individual. Companies are also avoiding paying benefits by limiting hours or scheduling employees on an on-call basis with no guarantee of hours. Moving the minimum wage to $15 may sound extreme, but it is based on the reality of life in most American big cities.

Bill Clinton with help from Newt Gingrich and the GOP ended “welfare as we know it.” More people are working now than ever before. The problem is that there are more and more low wage workers who need help from government programs to pay for life’s necessities, such as rent and food. In essence, we have moved from a system that rewards individuals who don’t work to one that subsidizes large corporations and big investors by helping to house and feed their employees.

Rather than worrying about benefits given to poor people, we should focus on corporate welfare and tax breaks to the “job creators” who have been raking in record profits and increased income on their billions. The problem is not jobs. It’s pay, and who is getting paid.

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