Writing in the New York Times Week in Review, Louis Uchitelle reviews the recent decline in the floor for wages in the U.S. labor market.
The $20 hourly wage, introduced on a huge scale in the middle of the last century, allowed masses of Americans with no more than a high school education to rise to the middle class. It was a marker, of sorts. And it is on its way to extinction.
Americans greeted the loss with anger and protest when it first began to happen in big numbers in the late 1970s, particularly in the steel industry in Western Pennsylvania. But as layoffs persisted, in Pennsylvania and across the country, through the ’80s and ’90s and right up to today, the protests subsided and acquiescence set in.
Hourly workers had come a long way from the days when employers and unions negotiated a way for them to earn the prizes of the middle class — houses, cars, college educations for their children, comfortable retirements. Even now a residual of that golden age remains, notably in the auto industry. But here, too, wages are falling below the $20-an-hour threshold — $41,600 annually — that many experts consider the minimum income necessary to put a family of four into the middle class.
The nation’s political leaders — Democrats and Republicans alike — have argued that education and training are a route back to middle-class wages for those who have fallen out. But the demand isn’t sufficient to absorb all the workers that the leaders would educate.
…. The trend in the hourly work force is striking. Take only the peak years in each business cycle, starting in 1979. The proportion earning at least $20 an hour declined from 23 percent that year, to 20 percent in 1980, to 18 percent in 1989, and to 16 percent in 2000. Manufacturing was hit the hardest.
Uchitelle doesn’t take the data to the next point, which is a focus of our research at The Mobility Agenda: the high proportion of the U.S. labor market made up of low-wage jobs. Our policy leaders haven’t focused nearly enough on the fact that the U.S. isn't just losing better jobs, growth in low-wage jobs is changing our economy in ways that affect all of us. Our economy is heavily dependent on individual spending. When workers don’t earn enough to take care of daily expenses like housing, transportation, and food – spending and consumption decline. And that hurts the economy for all of us. As is apparent today.
Unfortunately, over 40 million jobs in the United States—about one in
three—pay low wages of $11.11 or less, often providing no employment benefits and little flexibility. Even though the United States is among the wealthiest nations in the world, employers pay these workers less than workers who hold similar jobs elsewhere.
The last decade has seen some progress on advancing a number of well-known policies to improve job quality by boosting the minimum wage and expanding publicly subsidized employment benefits, like child care and wage subsidies such as the Earned Income Tax Credit. Likewise, we support efforts to address education and advancement strategies that prepare workers for skilled jobs.
Still, when one worker advances out of a low-wage job and another worker takes it, the job does not change.
In contrast to the manufacturing jobs, many of these jobs are in growth sectors like retail and hospitality, jobs that will not be off-shored because they are geographically specific.
At The Mobility Agenda, we’ve surveyed key contacts across the nation for new ideas and strategies to strengthen the labor market by improving these jobs. State and local stakeholders are experimenting with a host of new initiatives to improve low-wage jobs. These innovative ideas are less well known and are not commonly incorporated into the agenda of advocates and academics. For much more information about these new strategies, see our web based resources on this research, starting here.
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