Can low-wage workers work their way out of poverty?
We’ve discussed ad nauseum (and still not enough!) the difference between individualist and structural explanations for social problems, particularly poverty and inequality. Let’s take a look at a couple of authors’ works: Lawrence Mead, whose ideas were in vogue in the 1980s and 90s, and who believes that a big problem facing welfare is that of ‘personal conduct’ and ‘reduced work effort’; and Barbara Ehrenreich, author of Nickel and Dimed, which presents if not a coherent whole structural explanation, many ways in which structure influences people’s work opportunities.
First some quotes from Mead:
- ‘Are the poor to be seen as responsible and able to manage their lives or not?’
- ‘The working poor’ have become a synonym for the ‘deserving poor.’ (referring to two parent families where at least one adult works).
- Over half the poor families in the U.S. have an adult who works at least part time (this has increased with welfare reform).
- 44% of poor families have a full-time equivalent working adult.
So according to Mead, the problem of poverty is low wages, unemployment, right? Not exactly. More Mead:
The ‘working poor’ look a lot more like mainstream America, and a lot more ‘deserving,’ than the inner-city groups that have come to dominate the popular image of poverty.’ Most are white; almost half are men; most live in non-metro areas. More nonworking than working poor. (contrast this with what Hays writes about. The poorest-TANF recipients are single mothers with children).
Most minimum-wage workers are not poor (does this include teenagers at home, dual income earning families, a poverty line that likely grossly underestimates the amount of people in poverty?). According to Mead, it’s how much people are working. He says that ‘low wages are generally high enough to avoid poverty by the government’s definition. By one calculation, a single mother had a good chance to support two children above welfare and poverty in every state in the union in 1987, even working at the minimum wage, provided she worked full-time and full-year and claimed other government benefits still available to her’ (he cites Robert Rector. Try a google search and see where Rector publishes). Widespread prosperity after WWII was based on broad middle class, much of it supported by well-paid jobs in manufacturing industries. Often these positions paid well because they were unionized, not because they were demanding or difficult to fill.’
So, workers get benefits through no initiative of their own–merely by being associated with labor unions. He’s implying here that unions are responsible for overvaluing workers?
‘The trend toward more part-time workers goes back to 1973 and is largely benign. Secondary workers such as teenagers and wives want flexible schedules to accommodate school or homemaking duties.’ And here’s his metaphor: ‘The working poor are the icing atop a large and nonworking cake.’ Marie Antoinette would have been proud.
More: ‘Lower wages should mean more full-time low-wage workers.’ Yet he contends people are working less.
‘ Economic conditions exert only minor influence on welfare dependency. The bulk of rolls are composed of longer-term cases with little connection to the economy.’ He has cleverly ‘re-ified’ welfare dependency into existence without having to prove it.
‘White Americans typically earn more than blacks for many reasons, among them higher skills and wages, but a divergence in work effort appears to be the main reason that gap persists.’ So, he’s contending that blacks don’t work as much or as hard as whites. Between 1960-70-black median family income went from 55% to 61%. By 1980, back to 58%, mainly because average work levels among black families fell, largely due to increased breakup of families and nonwork among the poor. With strenuous work effort, better-off blacks pull themselves into the middle class. In other words, blacks need strenuous work effort to be able to expect a household income on a par with whites. Does that sound like a problem of individual character flaw? What about whites who do not display ‘strenuous work effort’ but still earn 40% more than blacks?
Before we move on to Ehrenreich, here are some relevant social trends:
- shift from full-time to temporary work (according to Mead, this is for housewives and teenagers)
- High wage to lower wage (what forces have we discussed in class that tend to create this trend?
- Unemployment more restricted (back to the post 1960s business backlash)
- Union organizing is in decline (why? Media coverage, political power, globalization, concentration of corporate power–we’ve discussed many reasons, some of which are more trends)
- Increasing income and wealth inequality (what’s driving it?)
- Increasing homelessness
- Increasing privatization of public assets, social welfare (e.g., faith-based organizations getting a greater ‘market share’ of welfare dollars from the federal government)
- Increasing social inequality (this goes along with privatization–there are less and less public settings where the upper class have to actually mix with the lower classes. Even the grocery stores can be scaled. Look at ads on public transport if you think it isn’t a lower-income demographic. Public schools? Just say ‘private school’ or ‘school voucher’).
Ehrenreich makes some statements up front:
- No job, no matter how lowly, is unskilled work. She found out she was just an ‘average’ employee.
- Work effort-Ehrenreich talks about ‘rate-busting.’ Rate-busting is when someone on the job makes you look bad by working ‘too hard.’ What’s wrong with it? In Ehrenreich’s words, you have to pace yourself just to get through the week, the month, the year. Rate-busting makes it more likely you’ll have some health problems down the road. There are, she says, no rewards for heroic performance. Well, maybe in professional sports . . .
- ‘Moral economy’ of workers. The ‘moral economy’ operates where a class of people think they’re not getting their due, and they’ll extract what they need in other ways. If a union fails to win wage increases, maybe workers stage a ‘slowdown.’ People tend to have a feeling of where the exploitation line is. Grocery workers might think it’s okay to steal from the back room here and there. Maybe students think it’s okay to cheat on an exam if a professor is particularly hard, or perceived to be unfair. We refer to this as a ‘moral economy.’ According to Ehrenreich, the trick with low wage work lies in budgeting your energy so there’ll be some left over for the next day.
- low-wage work is often unhealthy-physical ailments, repetitive motion injuries, etc.
- work vs economic survival: Ehrenreich was proud of her ‘work effort.’ But ability to work is one thing–ability to survive is entirely different. Ehrenreich had no family to support, extended or otherwise, but still really only made ends meet in Maine, where she was working two jobs and seven days a week.
- Survival skills: Here’s the important stuff, in terms of what people need to know, and how they should understand some of the structural circumstances in which they find themselves:
- knowing where and how to shop for food (how to cook), how to find housing, etc.
- budgeting is critical-unforseens can break the budget, lead to debt, etc.
- How to look for a job.
- Economic, information literacy–how to know how to get a job, find one with best wages, etc.? Does TANF do this? No, according to Hays, TANF tends to teach recipients how to be deferential to employers, dress and behave properly for the interview (certainly don’t ask nosey questions like ‘how much are you paying?’). Their approach was ‘work first,’ not ‘be relentless and find the best deal you can, and negotiate with the employer.’
- Housing: Wages and rents-something is wrong with the housing market, according to Ehrenreich. Why do we have so many homeless? While wage markets have remained flat, rents have increased dramatically. Why? Scarcity of low-income housing, gentrification of neighborhoods are two prime reasons. As Ehrenreich states, the rich outcompete the poor (for real estate, location, etc.). This shouldn’t come as a surprise.
- Government housing programs–we often think of government generally as stepping in when markets fail. The housing market has clearly failed low-income families. However, since the Reagan Administration, the Department of Housing and Urban Development (HUD) has been stripped to the point where it is almost a joke as a cabinet-level agency. Yet homeowners still get impressive housing subsidies (interest on mortgage loans is tax deductible). That’s not necessarily a bad thing, but imagine what renters could do with some sort of subsidy, how that might improve quality of life. In many cases, merely coming up with first and last month’s rent and security deposit is enough to leave some people either homeless, or broke because predatory landlords are taking advantage of their ‘cash flow problems.’
- Budgeting–in early 1960s, food was 24%, housing 29% of an average budget. In 1999, food was 16%, housing 37%. What accounts for this? Partly housing increases, but also overproduction of food-and look at the kinds of foods. Try eating in a school cafeteria some time . . .
- Wages and salaries–Are at their lowest levels, when adjusted for inflation, in 30 years. Executive wages, however, have risen dramatically in last 20 years–several hundred percent (the following are from Huffington’s book):
Now, Ehrenreich suggests that what low-wage workers really need to move up the socioeconomic ladder is not what the TANF program is providing for the most part: not wardrobes for job interviews, not an attitude of deference towards employers, not a scheme for cheating the drug test (okay, that one’s not on their list), definitely not a work ethic (without which low-wage work doesn’t get done, at least if one wants a paycheck), but rather the kinds of survival skills that are mentioned in the above list. Low wage workers have to learn how to survive despite their socioeconomic circumstances in order to become more socially mobile, and in order to keep from being perpetually trapped in low-wage jobs. They need to learn how to use whatever leverage they have, how to pace themselves, how to budget wisely, how to reduce costs of housing and transportation if possible, how to continually look for positions that offer more job skills, responsibility, and money (and benefits).
So, economists say that productivity for many workers is increasing over time. Then why not wages? Corporate profits are up, too, yet minimum wage’s real value has remained somewhat stagnant, especially in the South. There is great resistance from employers to raise wages. Wages can’t be taken away. Ehrenreich talks about all the ‘free stuff’ workers can get (lunches, doughnuts, discounts, Christmas cornish game hens, plastic dinnerware sets, commemorative plaques, manicure coupons, etc.), which can all be withdrawn. This gives employers greater labor market flexibility.
So why aren’t workers more mobile in labor market? If there are jobs, and the wages vary, why aren’t workers out there looking for the best deal? There are structural constraints: Employers withhold information on wages, workers generally don’t discuss wages, and in some workplaces would be reprimanded or fired for doing so. Employers depend on this ‘money taboo’ to keep wages down, according to Ehrenreich. And if employees feel some internal pressure, because of low self-esteem, that keeps them from discussing wages (wealthy classes may avoid these discussions, but mostly for tax reasons), we’re back to devaluing employees. Sort of like the ‘ritual of public degradation’ that Fox Piven and Cloward talked about with welfare programs and the ‘undeserving.’
- Transportation problems
- This helps explain why workers don’t seek better jobs-this tends to mess up child care arrangements, transportation expense. This serves to make workers less mobile, especially where traffic distance are major concerns (e.g., where the jobs aren’t close to where people live, as is the case in many inner cities).
- the hassles of applying for work-the indignity of drug testing, the endless applications, and even then employers don’t discuss wage. Workers risk being in a new environment, not knowing their co-workers. Sometimes better the devil you know than the angel you don’t . . .
Erosion of democracy
Ehrenreich says iIt’s a sellers’ market when you look for work. You give up rights to privacy in private employment-especially with increasing privatization . . . At will employment means that employers can fire you, well, at will. (here’s a business perspective on at will employment). TANF recipients in ‘at will’ states have to be even more careful.
Labor unions: This is from Harpers Magazine (Oct 2004: 23), from a document titled ‘labor relations and you at the WalMart distribution center’:
WalMart is opposed to unionization of its associates. Any suggestion that the company is neutral on the subject or that it encourages associates to join labor organizations is not true. As a member of WalMart’s management team, you are our first line of defense against unionization. This toolbox will provide you with valuable information on how to remain union-free in the event union organizers choose your facility as their next target:
Early warning signs:
- increased (as in, more than zero) curiosity in benefits
- associates receiving unusual attention from other associates (aka: agitators)
- associates talking in hushed tones to each other (shhhhh!)
- abuse of rest-room visits (that’s how all unions start all right!)
- associates spending an abnormal amount of time in the parking lot before and after work (they’re just concerned about their safety, that’s all!)
- associates who are never seen together start talking or associating with each other and begin forming strange alliances (hey, don’t take that ‘associate’ concept too far, now!)
It goes on to describe not just suspicious behaviors, but suspicious types of associates: inefficient, rebellious, chronically dissatisfied, cause-oriented, overqualified, etc.
Ehrenreich states: ‘We can hardly pride ourselves on being the world’s preeminent democracy, after all, if large numbers of citizens spend half their waking hours in what amounts, in plain terms, to a dictatorship. Searches of personal belongings are perfectly legal, as is surveillance. Control is valued over productivity-drug testing, surveillance, etc. Corporations want obedient workers, and are willing to pay the price to get them.
Seen in this light, Ehrenreich says that management’s role is to keep workers obedient. They may seem worthless, like the boss in the Dilbert cartoons, but if they keep their workers in line, then that may be their key role.
Poverty as a state of emergency
Ehrenreich says this is not episodic, and people are struggling so hard that these are not mere inconveniences. People’s lives fall apart every day because they are living on the edge, on the economic margins. These are economic emergencies. Anything that goes with it–family obligations, mental illness, substance abuse, broken down car, etc., increases the struggle. For Mead, it’s about personal conduct and low work effort . . . Mead clearly has never struggled, and can’t empathize. Ehrenreich’s journalistic experiment helped her, but she was to be fair a writer on issues of poverty, and a very good one, before this book.
- Who has it, how do they exercise it?
- What has this to do with trends?
- Corporations, lobbyists, money, campaigns, media, policy makers, politicians
- Social inequalities are increasing–there are less and less opportunities where the classes mix. Less and less opportunities for the wealthy and privileged to really see the struggles of the working poor, beyond statistics about ‘work effort.’