With all of the evidence that wages have been more or less stagnant, especially for low-wage workers, over the last several years, the question then arises: how come our economy is as sound as it is? Who has the money to buy any of the consumer goods that are being produced for the masses? One explanation which is increasingly gaining credence is that workers who are just barely getting by are being forced to take second jobs. What happens when this development moves from being a growing trend to a societal expectation? Should the American value of “those who work hard get ahead” mean that only those who work 60 or 70 hours a week deserve to make it?
A recent New York Times article asks: How Long Can Workers Tread Water? The article reports that
The wages of typical workers are treading water, growing roughly at the same rate that inflation eats into their buying power. Last week, the Labor Department reported that average wages for production and nonsupervisory workers in the private sector, about 75 percent of the labor force, reached $16.06 an hour in June, just 2.7 percent above the level a year ago.
Yet average incomes are growing at a significantly more rapid pace, and for low-income workers, that means an extra job. The Times tells about James Barnes, who makes only $350 a week as a security guard at an office building on Madison Avenue in Midtown Manhattan (while some of the people working in that building easily make that in an hour), and has not had a raise in years. Barnes’ income just jumped sharply, however, because he took on a newspaper delivery route from 3 a.m. to 7 a.m., for an extra $235 a week. That allowed him to buy an i-Pod, which some struggling to survive would definitely consider a luxury item, while others might think he more than earned it after several months of working so early in the morning.
It used to be that “working hard” was measured by productivity: “When workers produce more—either tangible products or services—in an hour of work than before, they are being more efficient and, usually, that means more profit for a corporation. Historically, increased efficiency flowed to workers in the form of higher wages.” (See TomPaine.com article.) However, economists are sounding the alarm that the link between productivity and wages is broken.
Productivity has grown almost three times faster than wages since 2001. (See EPI Economic Snapshot.) During that time, 70 percent of the nation’s income growth has gone straight into corporate coffers as profits—presumably to continue to finance staggering pay and benefits for executives—a complete reversal from the previous seven business cycles when 77 percent of the overall income growth went to wages.
Corporate profits, professionals’ incomes, gains from investments and executive compensation – the kind that frequently comes in the form of stock options – are all surging, supporting healthy gains in the economy. “Profit has roughly doubled in the last year on revenue growth of about 40 percent….The top-line growth was very satisfying. There’s been very strong growth in the amount left for compensation of the owners and for profits.” (See New York Times article.)
To simplify things a bit: due to workers’ hard work, productivity has surged, but instead of passing along to workers the fruits of their labor, those at the top are just hanging onto it, don’t pay any taxes on it, and spend just enough to prop up the economy. The worker then takes on a second job to get ahead, making even more money for, you guessed it, the folks at the top. The average income, both for the worker working two jobs and those reaping the benefits of all that hard work, just keeps going up, but that’s all that stands between what we have now and a major recession.
So what happens when you just can’t keep that up any more? When you have to step off the treadmill because you can’t work any harder, and you can’t work any more hours? Or because little things like sleep and family time just keep getting in the way? What happens to those who simply can’t work any more hours, because of their age, their child or elder care obligations, their physical health, or even their transportation options? Will they just starve, become homeless, or die from denied access to health care?
Or will there be a significant societal upheaval first? As Jonathan Tasini comments, “Most of us would find this lopsided economic arrangement obscene just by its sheer unfairness: No matter how hard you work, you won’t get a fair return on your labor. Beyond the unfairness, it also tears at the country’s social fabric because an economic system cannot endure if it is perceived to be unfair and fails to deliver a rising standard of living.” (See TomPaine.com article.)
And just why is it that so many politicians who care about family values are missing the impact that this economic development has on families? Let’s assume that in a 24-hour day, that working 8 hours a day is standard, and that there is only so much time that most humans can subtract from 8 hours of sleep and still function. That leaves 8 hours in the day for everything else, including time with one’s family. When a second job cuts into that time, that’s directly subtracted from family time.
Yet those who bemoan the decline of the family and the erosion of moral values don’t seem to be making that connection: how are parents supposed to pass along values to children they never see? How are couples supposed to avoid divorce when they have no time to maintain their marriages? As one psychologist warns, unconventional work schedules can “undermine the stability of marriages, increase the amount of housework to be done, reduce family cohesiveness, and require elaborate child-care arrangements.” (See Christian Science Monitor article.)
It’s no longer “those who work hard can get ahead,” it’s “those who work long hours might get ahead slightly.” But at what cost?