Looking Under the Hood
Focusing on the unemployment crisis alone can cause us to ignore the quality of the jobs we need to create.
Rick Perry has boasted of his track record in increasing jobs in the Texas’s Rio Grande Valley by 42 percent between 2000 and 2010. But the MIT economist Paul Osterman, writing in The New York Times, noted: “the median wage for adults in the Valley between 2005 and 2008 was a stunningly low $8.14 an hour (in 2008 dollars). One in four employed adults earned less than $6.19 an hour.” (See, “Yes, We Need Jobs. But What Kind?”) And it’s not just a problem in Texas. One fifth of all American workers received wages at or below the poverty level.
One could argue that a bad job is better than no job at all, but there are serious hidden costs to poor wages. Families struggling to get by on inadequate wages put off health care, frequently with long-term consequences. As parents struggle with extra jobs to pay the rent, their children are often neglected. They fail to do their homework, get into trouble, eat poorly. Seeing how their parents work hard but still fall behind, they lose incentive to complete school and join the work force.
Then there are the psychological costs of anxiety and depression, stress factors that lead to generally higher rates of illness and domestic violence.
We tend to assume that unemployment and poverty go together. That is, if you work, if you’re not lazy and you try, you’ll be OK. But Charles Blow pointed out two weeks ago: “Three out of four of those below the poverty line work.” (See, “For Jobs – It’s War.”) Either they are paid poverty wages, or they are victims of “wage theft,” practices by employers in low-wage industries who don’t pay overtime or who call their workers “independent contactors” to avoid paying them benefits.
This is not to imply that employers, by and large, are mean spirited or exploitative. Most of them are also struggling to make their budgets. They must produce goods and services while staying competitive. Workers who are content are more productive and loyal, but employers still have to watch the bottom line.
That’s why it is up to government to set standards and monitor compliance. Not only does the federal government set the minimum wage (now at the low 1968 level, adjusted for inflation), state and local governments can tie contracts and zoning easements to higher wage standards. Much can be done — if government is not hamstrung by pressure against “regulation” and “interference” by ideologues.
No one likes regulations, and many object to the infringement on personal freedom they entail. But they prevent us from simply believing what we want to think, what’s convenient, or what’s in our own interest.
In a competitive world where we are all struggling to survive, they keep us honest.