The year 2013 witnessed no major national legislative achievements. Partisan gridlock prevented congressional action on a number of important issues, such as immigration reform, a farm bill, and government spying.
Meanwhile, the mainstream media breathlessly covers recent signs of economic recovery including stocks at record levels, low inflation, rising home sales, more job creation, increased retail sales, and an unemployment rate down to seven percent. These supposedly rosy news items mask a continuing sluggish economy, widening income disparities, and a loss of good jobs.
Millions of hard working Americans face increasingly tough times. The extent of worker distress can be measured by grim statistics on poverty, wages, and food stamps.
The number of people living in poverty continues to rise. Nearly one of every seven Americans lives at or below the poverty level, including nearly a quarter of the country’s children.
From 1979 to 2012, the wages of typical workers rose just five percent despite productivity gains of almost seventy-five percent. Wages for low-wage workers remained flat or declined.
The federal minimum today amounts to a measly $7.25 per hour. Adjusted for inflation, this is lower than it was 50 years ago.
Recent figures show employment gains remain concentrated in low-income work, retail sales and food/drink services. Ironically, workers earning poverty wages depend on public assistance programs like food stamps and Medicaid.
Last year fast food workers staged a series of one-day walk outs to protest low wages, chanting “We can’t survive on $7.25!” Assisted by the Service Employees International Union, the workers demanded $15 an hour and the right to organize without retaliation. Wal-Mart workers, supported by the United Food and Commercial Workers Union, engaged in similar direct action protests.
On November 1, 2013, 47 million Americans saw their food stamps benefits cut by about seven percent. This is the first across-the-board cut in food stamp benefits in U.S. history, and it leaves millions of poor households in desperate straits and local food pantries overwhelmed. Nearly a third of food stamps recipients worked in 2010, and the vast majority of those not working are disabled, elderly, or children.
People are living at the margins, increasingly unable to make a living at their jobs. Low wage workers spend every dollar they earn and still struggle to meet their expenses.
While wages stagnate, executive pay soars. Millions of low-wage workers earn poverty wages while giant corporations and the wealthy amass huge profits and fortunes.
The growing gap between the richest and everyone else hurts individuals and the U.S. economy. Higher pay and outsize stock market gains are flowing mainly to affluent Americans. Yet these individuals spend less of their money than do low and middle income consumers who make up most of the population. Many economists argue that a wide gap in pay limits the ability of poorer and middle income Americans to improve their living standard.
The minimum wage, earned income tax credits, and food stamps boost the purchasing power of workers. These federal programs also create employment and saves taxpayer money on government assistance.
Over the years, wages, hours, and working conditions have improved because of unions. Since the 1970s, employer attacks on unions have reduced their ranks and created misery for wage earners.
Another reason for America’s persistent poverty is the disappearance of jobs with decent pay. What would really strengthen low-income families is paying them a living wage.
Workers should be able to freely and fairly negotiate with management to secure a decent standard of living. While the long term struggle for union contracts continues, workers often see legislation as a means to rebalance the economy through state and local minimum wage increases.
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.