American workers face hard times. While the Great Recession reduced incomes and increased unemployment across all socioeconomic groups, the poor got hit harder than anyone else.
Over the past forty years, moreover, many workers have experienced stagnant wages and miserly salaries, vanishing pensions, diminishing benefits, and increasing workloads. The traditional expectation that as worker productivity increased wages would also rise has not happened. Worker productivity grew 80 percent from 1973 to 2011, but the average worker wage, adjusted for inflation, fell 7 percent
Only 56 percent of those laid off from January 2009 through December 2011 found jobs by the start of this year. Over half of them took jobs with lower pay. Poverty rates continue to climb, reaching levels unseen in almost fifty years.
Although the recession supposedly ended in 2009, we remain in a job crisis even as corporate profits have returned to high levels and the rich control even more of our wealth. A weak economy and fraying safety net create deep distress among average working people.
Making matters worse is wage theft, rapidly becoming a widespread and often unacknowledged crime. People put in more than 40 hours a week without overtime pay by being forced to work off the clock or having their jobs misclassified as exempt from overtime requirements. Others complain employers confiscate tips, pay less than minimum wage, and make unauthorized or illegal deductions.
Workers seeking to organize against employer domination and abuse face great obstacles. Workers seeking union protection are routinely subjected to intimidation, threats, captive meetings, interminable administratively delays, coercive one-on-one hectoring by supervisors, demotions, forced transfers, and other forms of retaliation including dismissal. The miniscule fines for these infractions of labor rights have little deterrent effect. In their new book, Why Labor Organizing Should Be a Civil Right, Richard D. Kahlenberg and Moshe Z. Marvit propose an amendment to the Civil Rights Act to bar discrimination on the basis of exercising the right to unionize, just as employers are currently prohibited from discriminating against employees on the basis of race, gender, religion, marital status, physical ability, and—in some jurisdictions—sexual orientation.
The problem with the U.S. economy right now is that not enough people have money to spend. The ongoing downward pressure on wages from the cumulative effects of long-term unemployment and union busting left many Americans with too little money even if they do have jobs. This weak consumer spending accounts for most of our slow recovery rather than taxes or labor costs.
Assisting low wage earners by increasing the minimum wage would be a big, immediate, and popular stimulus. One part of Iowa Democratic Senator Tom Harkin’s Rebuild America Act would raise the minimum wage from $7.25 to $9.80 per hour and index it to inflation. This would give 28 million workers a raise and generate about 100,000 jobs over three years. Upping the compensation of low wage workers increases the immediate demand for basic needs and services, reduces turnover, and generates more tax revenue. And it does not reduce employment.
Now is the time for public investment when savings on materials are plentiful and interest rates are low. We can create new jobs by rebuilding and upgrading our infrastructure such as roads and bridges, modernizing our schools, and installing energy efficient systems. Direct federal spending on safety net programs such as food stamps and unemployment insurance also spurs a cycle of increased economic activity.
Our big challenge today remains generating robust job growth and making sure unemployment drops steadily and rapidly. The best deficit reduction measure is putting people to work. We need jobs, not austerity.
Ralph Scharnau teaches U. S. history at Northeast Iowa Community College, Peosta. He holds a Ph.D. from Northern Illinois University. His publications include articles on labor history in Iowa and Dubuque. Scharnau, a peace and justice activist, writes monthly op-ed columns for the Dubuque Telegraph Herald.