Wednesday, August 13, 2008

Pay Poverty

"If the fruits of productivity had been shared since the 1970s as they had been for the preceding quarter-century, the average full-time worker would be earning $22,000 more than she or he is earning today-- $58,000 instead of $36,000."

Jack Metzgar, "A $22,000 Question," reviewing Steve Greenhouse's The Big Squeeze: Tough Times for the American Worker, Dissent, Summer 2008.

Do a little calculation in you head about the total amount of public benefits or work supports that low-wage workers may receive -- EITC, Food Stamps, Child Care, Medicaid, housing subsidies, etc. The Wider Opportunities For Women's (WOW) Self-Sufficiency Standard, roughly 200 percent of the federal poverty level (now about $21,000 for family of four), would be met with such a compensation infusion without all the rigamarole of navigating state and federal eligibility standards for benefits access. Except for community college technical programs, most education and training efforts would not meet this $22,000 standard in the short or even long runs.

So, as some advocates say, it's about the poverty of the labor market, or jobs, not the poverty of the people.

Not so quick. Remember the concepts of "primary" and "secondary" labor markets back in the 1970s -- primary jobs being covered by the Treaty of Detroit and secondary jobs being more like today's low-wage labor market. There was not a lot of movement between primary and secondary jobs, although many people of color moved into primary jobs, especially in manufacturing.

While a provocative explanation of the deterioration of middle-wage jobs, the "$22,000 question" needs a little fine tuning for all segments of the labor market. Nevertheless, poverty campaigns of today should take this productivity/compensation gap into account as they identify promising policy agendas for the coming decade. So should our presidential aspirants!

1 comment:

Ed said...

Primary cause of this is the Federal Reserve.