Tag Archives: low-wage work

Image: Walmart via Flickr (CC BY 2.0)

By Herbert J Gans

One of the lesser known facts about the post-recession economy is that while new jobs are being created at near record levels, a significant number are bad jobs. No one knows exactly how many, but in April 2014,the National Employment Law Project, which measured job quality by industry wage level, reported that 44 percent of jobs created (pdf) between 2010 and 2014 were in lower wage industries, compared to 56 percent in mid wage and high wage ones.

The proportion of bad jobs was probably even higher since the study set the low wage floor two dollars above the current federal minimum wage. We also know that growing industries like health and other care as well as tourist related enterprises and many small manufacturing firms all pay minimum wages.

The trend may not even be new, for there is some evidence that the rising proportion of bad jobs goes back as far as the 1970s. John Schmitt and Janelle Jones of the Center for Economic Policy Research estimate the ability and willingness of employers to create good jobs has decreased (pdf) by a third since 1979.

More important, the forces behind the creation of bad jobs remain in place. Global competition with low wage countries, outsourcing of American jobs, increasing computerization and robotization, the political influence of corporate and Wall Street firms and the weakening of unions continue. Moreover, many industries and occupations that depend on low wage workers are still expanding. Consequently, the economy may continue to produce too many bad jobs even when it is also producing record profits for many employers and their shareholders.

Is Walmart the new Ford – and does its wage hike signal a turning point in the US labor market?

By matt vidal

April 13, 2015

News Analysis, Research Findings

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Walmart made headlines recently by announcing it is raising its base wage rate to $9 per hour (going to $10 per hour in 2016). In response, Gary Silverman of The Financial Times suggests that “Walmart stirs hopes of a Fordist revival,” referring to Henry Ford’s famous implementation of a $5 day in 1914 – double the going rate at the time. Similarly, Paul Krugman, Princeton economist and New York Times columnist, argues that Walmart’s “wage hike seems to reflect the same forces that led to” rising real wages and declining inequality for nearly three decades after the Second World War.

While the comparison between Walmart and Ford is apt in some respects, unfortunately, the broader institutional context of today’s postindustrial, globalized, financialized economy is far different from that of the post-WWII years. As a result, the move by Wal-Mart is unlikely to signal a broad reversal of the current trajectory of the American labor market, which is characterized by stagnating wages and rising inequality.

What America needs is a new jobs policy

By Chris Warhurst

February 25, 2015

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Jobs policy in the US has evolved over the years as its focus has changed from job creation to job training to job placement. Placement however only works if there are jobs for the unemployed to be placed in.

With few jobs available in recent years due to the economic crisis, the weakness of the current focus has been exposed. What America needs, Mary Gatta argues in her new book, is a new jobs policy. ‘All I want is a Job!‘ should be ‘required reading for anyone interested in low wage work, labor markets, social welfare policy and economic development’ says Stephanie Luce reviewing the book for Gender & Society.

The Republican War on Workers’ Rights

By Guest Contributor

June 11, 2014

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by Corey Robin

Midterm elections are like fancy software: Experts love them, end-users couldn’t care less. But if the 2010 elections are any indication, we might not want to doze off as we head into the summer months before November. Midterm elections at the state level can have tremendous consequences, especially for low-wage workers. What you don’t know can hurt you — or them.

In 2010, the Republicans won control of the executive and legislative branches in 11 states (there are now more than 20 such states). Inspired by business groups like the American Legislative Exchange Council (ALEC), the U.S. Chamber of Commerce and the National Association of Manufacturers, they proceeded to rewrite the rules of work, passing legislation designed to enhance the position of employers at the expense of employees.

New book — “Unfinished Business” by Eileen Appelbaum and Ruth Milkman

By matt vidal

January 14, 2014

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Unfinished Business: Paid Family Leave in California and the Future of U.S. Work-Family Policy by Eileen Appelbaum and Ruth Milkman (Cornell, 2014).

This book analyzes the history of California’s decade-old paid family leave program, the first of its kind in the United States, which began operating in 2004. Based on original fieldwork and surveys of employers, workers, and the larger California adult population, it analyzes the impact of paid family leave on employers and workers in the most populous state in the U.S., and explores the implications for crafting future work-family policy for other states and for the nation as a whole.

Erin Hatton on The Rise of the Permanent Temp Economy

By matt vidal

January 30, 2013

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The Rise of the Permanent Temp Economy

By Erin Hatton

(This article was originally published in the New York Times. The original version can be read here: http://opinionator.blogs.nytimes.com/2013/01/26/the-rise-of-the-permanent-temp-economy/?emc=eta1)

Politicians across the political spectrum herald “job creation,” but frightfully few of them talk about what kinds of jobs are being created. Yet this clearly matters: According to the Census Bureau, one-third of adults who live in poverty are working but do not earn enough to support themselves and their families.

A quarter of jobs in America pay below the federal poverty line for a family of four ($23,050). Not only are many jobs low-wage, they are also temporary and insecure. Over the last three years, the temp industry added more jobs in the United States than any other, according to the American Staffing Association, the trade group representing temp recruitment agencies, outsourcing specialists and the like.

Low-wage, temporary jobs have become so widespread that they threaten to become the norm. But for some reason this isn’t causing a scandal. At least in the business press, we are more likely to hear plaudits for “lean and mean” companies than angst about the changing nature of work for ordinary Americans.

The Union Drive Among Fast Food Workers in NYC

By matt vidal

December 6, 2012

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Eduardo Porter had a nice piece in the New York Times two days ago entitled “Unionizing the Bottom of the Pay Scale.” His article dovetails with my recent post here on how mainstream economics has little to say about the the problem of growing structural demand for low-skill service workers.

In Porter’s words:

“To improve the lives of American workers, most economists argue, we might do better by focusing on education to equip them with the skills to perform more productive, better-paid jobs.

But this argument overlooks the fact that the McJob is hardly a niche of the labor market reserved for the uneducated few. Rather, it might be the biggest job of our future.”

He goes on to note that “In countries where more than half of workers belong to a union, only 12 percent of jobs pay” low-wages.

For readers who have not been following this union drive, Steven Greenhouse also had a story on it last week, in which he quoted eminent labor sociologist Ruth Milkman on the problem of organizing such a transient workforce.

Education, Skills and the Servant Economy

By matt vidal

November 27, 2012

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In last weekend’s New York Times Magazine, Adam Davidson had a nice article debunking the so-called skills gap in manufacturing. He noted that manufacturers constantly complain about not being able to hire skilled workers – yet they offer starting pay as low as $10 per hour.

One manufacturer Davidson spoke with stated that workers with an associate degree can make $15 per hour in his factory. Yet, as Davidson noted “a new shift manager at a nearby McDonald’s can earn around $14 an hour.” The problem is not lack of skilled workers, but that manufacturers are offering wages too low to attract skilled workers.

Some employers are willing to train but even they are facing a deficit in basic math and science skills, which are increasingly important for modern, computer-based manufacturing. Davidson closes by suggesting that “so-called skills gap is really a gap in education, and that affects all of us.”

While it may be true there is a general education deficit in the US, this barely scratches this surface of a deeper problem facing postindustrial economies: what kinds of jobs are replacing formerly-well paying manufacturing jobs as these are outsourced to low-wage countries and lost to advancing technologies?

Creative Workers or Servants? Apple’s American Workforce and the Service Economy

By matt vidal

June 29, 2012

Commentary, News Analysis

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The New York Times recently published an in-depth article on “Apple’s Retail Army, Long on Loyalty but Short on Pay,” as part of its excellent series on “The iEconomy.” The new article notes that the majority of Apple’s US workforce (30,000 of its 43,000 domestic employees) are not engineers – part of the hailed “creative class” typically associated with the likes of Apple – but hourly retail sales employees.

Last year, the article reports, “each Apple store employee — that includes non-sales staff like technicians and people stocking shelves — brought in $473,000.” Yet, many of these employees are paid just $25,000 per year.

The most common definition of low-wage work used in international comparative research is two thirds of the median income. In the US, the median income in 2011 was $34,460. This puts the typical Apple store employee at 73% of the median, making employment in an Apple store effectively a low-wage job.

Rich Reporting and Thin Analysis in Adam Davidson’s Pop Economics

By matt vidal

February 20, 2012

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Adam Davidson is a co-founder of NPR’s Planet Money, a team of economics reporters that produces podcasts and segments for various NPR shows and the extraordinary weekly public radio show, This American Life. Davidson and his Planet Money team have produced some of the most penetrating and informative reporting on contemporary finance. Indeed, their reporting on finance is unrivalled, serving to demystify the murky world of derivatives, mortgage backed securities, credit default swaps and the like for a broad public audience – in the process playing a critical role for democratic debate.

And Davidson can really tell a good story. So good that he has recently been given a new platform for a news analysis, his It’s the Economy column for The New York Times Magazine. Unfortunately, since Davidson has turned from reporting on finance to news analysis focusing on the wider economy, he has increasingly traded the rich journalism that made his name – carefully and clearly explaining the esoteric workings of the financial world through first-rate investigative reporting – for commentaries on the broader economy that present embarrassingly thin analyses based on the oversimplified fantasy world of textbook economics and recycled tropes of American exceptionalism.

Davidson’s fascination with mainstream Economics got the better of him again in last weekend’s Magazine column, in which he praises the entrepreneurial efficiency of an alleged craft revival. Based on a couple of interviews with “successful entrepreneurs” making hand-crafted beef jerky or precision manufactured components, Davidson argues that a new breed is following “what seems like an ancient business model: making things by hand,” rejecting “the high-volume, low-margin commodity business.”

But, we learn, “the craft approach is actually something new — a happy refinement of the excesses of our industrial era plus a return to the vision laid out by capitalism’s godfather, Adam Smith.” The craft revival is a further realization of the Smithean division of labor, a new round of efficiency improvements based on “hyperspecialization.” Indeed, so efficient is the American economy that “the average American leads a shockingly good life by any historical or international standard” and “Huge numbers of middle-class people are now able to make a living specializing in something they enjoy, including creating niche products for other middle-class people who have enough money to indulge in buying things like high-end beef jerky.”