By Walter Borden
Building an equitable work environment in our nation is not about ensuring equal outcomes for all, as often claimed. Its purpose is to create equal opportunities for all citizens. The financial press makes frequent note of the slow, steady increase in employment in the US as ex ante proof of a recovery and thus cautious optimism. Yet looking at the matter simply as aggregate jobs created is downright myopic. Attention to the low and stagnant wages paid to almost all of these new work force participants and taxpayers. Further, even in an era of low inflation, these low wages represent income losses when adjusted for inflation. Is this the context and function of a truly recovering, resilient and sustainable economy for all but rather only a precious few? For the vast majority of US labor force participants, here are the salient realities:
- If the $7.25 federal minimum were had simply been adjusted with inflation since 1968, it would be ~$10 an hour.
- If linked to average U.S. productivity growth, it would be over $18 an hour.
- Between 1948 and 1973, the productivity of U.S. workers rose 96.8 percent and wages rose 93.7 percent.
- Between 1973 and 2011, productivity rose 80.1 percent but wages rose only 4.2 percent.
- Median household income today, adjusted for inflation, is at 1989 levels.
- During that same time, union membership dropped from about 1/3 of the private sector workforce to about 6.5 percent today.
- The majority of gains in our economy have thus almost all of the growth in income, has gone to the top 2 percent, and especially the top .1 percent.
- We are richer as a country than ever — with these riches concentrated in amongst a .1% of us and to an extent not seen in a century or more.
The reality of this type of labor whether its temporary, part-time, or full time is that one can start minimum wage and work a decade to even gain an $1 more per hour. In the warehouses where Amazon and Wal-Mart fulfill their online sales employees are mostly temp, allowing these firms, that do not contribute to the communities in which the operate, to nonetheless take advantage of the local infrastructure and the means-tested/public services most of the employees at these operations require.
What if more people earned wages that allowed them to live a bit beyond subsistence? Would these wages be more likely to spent in the community? Or would they export most their earnings to offshore investments as management does? Would the local and state tax bases not grow, enabling public funds for desperately needed infrastructure improvements and transitions to clean economies that don’t compromise air and water quality for its inhabitants? Many of these jobs are not easily easily replaced with automation and algorithms. One other thing we know, states and nations with higher minimum wages and unions have stronger economies and better health and education outcomes.