It’s not surprising that a growing number of workers around the globe are losing faith in political leaders. After all, the economic debate often seems completely divorced from the realities of workers’ lives, whether it’s blaming workers for national budget squeezes actually caused by bankers or CEOs imposing mass layoffs to cover up obscene executive compensation at the heart of bottom-line revenue shortfalls. The debate in the United States is a good example.
Just a few days ago, the US government announced that the unemployment rate had dropped from 8.1 percent to 7.8 percent. Immediately, the shift became a central piece of the political rhetoric engulfing the presidential campaign. Barack Obama trumpeted the drop as a sign that things were getting better and voters should stay the course: “Today’s news should give us some encouragement…We’ve made too much progress to return to the policies that led to this crisis in the first place”.
His opponent, Mitt Romney, predictably took the other route, alleging that most of the improvement was a result of people giving up: “If you just dropped out of the labor force, if you just give up and say, ‘Look, I can’t go back to work, I’m just going to stay home,’ if you just drop out altogether, why, you’re no longer part of the employment statistics, so it looks like unemployment is getting better”.
The problem is that neither side talks much about the quality of jobs. That’s not a new phenomena—it’s a fairly predictable dialogue that infects the debate every month, with most of the focus staying on gross numbers. But, the truth is that one in five Americans does not have decent-paying work. Yes, 20 percent.
Take the millions of people who are employed full-time at the US minimum wage of $7.25 per hour. The minimum wage is a poverty-level wage. At the grand sum of the $7.25 per hour, if you worked every single week, every day, you would earn $14,645 a year–with likely no health care, no retirement, no vacation days, no sick days. By comparison, the federal poverty level for a family of three is $17,600–a number that is outdated because it doesn’t take into account the real cost of living. But, even that number is higher than what a person would earn at the current minimum wage.
And let’s not even talk about the 10 million workers, 70 percent of whom are women, who wait on tables in U.S. restaurants whose minimum wage is only $2.13 an hour—in theory, because tips cover the gap between that level and the $7.25 an hour. But, that gap is never closed and so millions of people go home with a wage that is below a federal standard.
If the political debate was serious, someone would argue for raising the minimum wage to $10 an hour immediately, to be followed by additional hikes in the minimum wage so that it begins to reflect both the real cost of living and the incredible productivity of American workers that has not been reflected in their wages over the past 30 years. If the minimum wage tracked the 30-year productivity rise, the minimum wage in the US should be almost $20 per hour.
This is a political issue. In Australia, for example, the national minimum wage just went up on July 1st to about $16-an-hour. Waiters make that—and usually as much as $20-an-hour. And don’t forget they also are covered by the national health care plan.
That’s the difference: exploitation U.S.-style versus a fair wage Aussie-style.
The situation goes beyond wages to retirement. After all, people, mainly those in their forties and above, think about the quality of their current work in terms of how a job sets them up for retirement. Since 1978, the number of defined-benefit plans (meaning, real pensions where you can count on a set amount of money each month) plummeted from 128,041 plans covering some 41 percent of private-sector workers to only 26,000 in 2009, according to the Employee Benefit Research Institute, and the numbers have declined since. Only 21 percent of workers in the private sector have defined-benefit pensions.
So, the feeling of insecurity looms large, particularly in light of the Global Financial Crisis which devastated the savings of ten of millions of workers globally.
No surprise, then, that almost 40 million Americans–forty million–live below the poverty line. The US poverty level is now at the highest in the 50 years the government has been tracking that sad figure.
For those living in poverty, and earning the minimum wage, the boom-and-bust economic cycles are pretty irrelevant–their lives just get worse no matter what. It is true that the current economic calamity in the wake of the Global Financial Crisis has made things much worse and that it is better that the US unemployment figure dropped. But, the rumblings among voters, and the rise in people identifying as “independents”, makes it clear that politicians are not listening, and people sense that politicians are using employment figures for their own narrow purposes.
Indeed, this is a worldwide phenomena. The quality of jobs is being ignored everywhere, sparking industrial action throughout the world, as even the Financial Times noted:
In Cambodia, Phnom Penh recently raised the minimum wage by 21 per cent – from $50 a month to $61. That was below what the more activist of Cambodia’s 273 unions demanded, although a three-day, industry-wide strike did not materialise.
Vietnam recorded 200 strikes last year by workers hit by inflation of 9 per cent. In April, for example, nearly 10,000 workers walked out of a Taiwan-owned shoe factory, demanding better pay.
In Indonesia – where powerful trade unions with millions of members play a crucial role in negotiating with employers – minimum wages, set by regional authorities, have been increasing.
In 2008, Jakarta raised the local minimum wage by 10 per cent to nearly $100 a month, although wages in the country’s remoter regions are half that.
This can be summed up in a clever quote from the US civil rights leader Jesse Jackson, who noted years ago that “Even slaves had jobs”.
(This article was first published in the Equal Times)