Sunday, August 31, 2003

A Way to Break the Cycle of Servitude
…Twenty percent of the work force — 26 million people — earn $8.23 an hour or less. Most of them are not teenagers snagging pocket money, but adults supporting families. With so little income, too many Americans are pushed into poverty, and getting out of this trap is increasingly difficult.

As many studies have shown, rising income inequality has driven people apart. And low-wage workers, occupying the bottom rung in this ruptured society, have descended into what amounts to a servant class. It is not their work that makes them servants. We need factory assemblers, store clerks, child care workers and the telephone operators who field calls to "800" numbers, processing much of the nation's commerce.

What makes them servants is the miserable pay. Measuring status by wage, as many Americans do, no one — the employers of low-wage worker, the public or the low-wage workers themselves — seems to value this class of work. Promotion, or higher pay, would be a way out. Unfortunately, neither solution kicks in very often. More than in the past, low-wage workers are stuck in place.

"There is not any kind of sinister approach by companies or individuals to make this happen," said Jeffrey Joerres, chief executive of Manpower Inc., the temporary-help agency, which places many low-wage workers. "But it is the path that we are on."

That path has become self-perpetuating. Employers are under constant pressure to cut costs. Hospitals, for example, have to bid for good medical staffs, so they offset this cost by squeezing the wages of unskilled kitchen workers. Or they outsource food preparation to contractors who pay even less. In either case, the result is a constant, dispiriting turnover. But it is tolerated. The low wage more than offsets the cost of one or two days of training for each new hire.

So wages barely rise. Adjusted for inflation, the $8.23 an hour today is only 9 percent higher than the $7.55 that the workers in the 20th percentile earned 30 years ago, according to the Economic Policy Institute. All of that improvement came in the very tight labor markets of the late 1990's, when even low-wage workers could command higher pay.…

FAR from lifting these workers, the unfettered American marketplace holds them down. They need help, ideally from employers, if only those employers could find their way back to the pre-1970's system of long-term employment in low-skilled jobs that included training, promotions and raises. In some places, unions still force this to happen — at New York City hospitals, for example — and no hospital is at a disadvantage because each is bound by the same wage scale. But in this era of disappearing unions, that is not likely to work.

Raising the minimum wage would be a quicker route, if only Congress and the administration would make that a priority. The minimum wage once went up regularly, peaking in 1968 at the equivalent of $7.08 an hour today, adjusted for inflation. That's nearly $2 above today's actual minimum of $5.15 an hour. Just restoring the minimum to its old value of $7.08 would also push up wages that are just above the minimum.

Suddenly, the bottom 20 percent of the work force would be making up to $10 an hour, instead of $8.23. That might be a large enough raise to justify training and job security, and new respect for the men and women in these jobs — respect as workers, not servants.

http://www.nytimes.com/2003/08/31/business/yourmoney/31VIEW.html

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