The Bakersfield Californian, May 31, 2008: Wage instability plagues workers
BY COURTENAY EDELHART, Californian staff writer
e-mail: cedelhart@bakersfield | Saturday, May 31 2008 9:33 PM
Last Updated: Monday, Jun 2 2008 7:31 AM
The dream of most Americans is to make more money as they gain skills and work experience, but a new study has concluded that the nation۪s work force isn۪t in a steady ascent, but rather on a volatile roller coaster ride of highs and lows.
In fact, workers today are experiencing the most income instability in a generation, according to an Economic Policy Institute report released recently. Researchers examined family incomes between 1969 and 2004 and found individuals experiencing a large drop in family income (50 percent or greater) have climbed from less than 4 percent in the early 1970s to nearly 10 percent in the early 2000s. Moreover, the economic insecurity that has long plagued unskilled workers at the bottom of the labor force is now worrying educated members of the middle class.
“If you think of people investing in education as a way of mitigating against risk, unfortunately that۪s just not as effective as it once was,” said Elisabeth Jacobs, co-author of the study and a fellow in the multidisciplinary program on inequality and social policy at Harvard University. “It۪s a less and less stable investment, and isn۪t working particularly well for them.”
The study also took a stab at the common perception that the rise in family income volatility since the 1970s reflects a work force made up of more women, as working women are more likely to quit or move into part-time jobs after the birth of children.
In fact, female earnings have become more stable since the 1980s, whereas male workers have experienced a larger and more sustained rise in earnings instability, said co-author Jacob Hacker, a Yale University professor of political science. Because men۪s earnings account for a larger percentage of total household income, if anything, being married has served as an instability buffer, he said, but the reliability of that buffer is getting shaky.
Previously, if a husband lost his job and his wife was unemployed or underemployed, the wife could find work or bump up to a full-time job to shield the family from the blow. But if a wife already is working full-time, and she doesn۪t have job security, either, there۪s less ability to compensate.
Odilia Araujo de Camacho isn۪t surprised by any of the report۪s findings. She sees evidence of the trend “every day, every hour” as a program specialist for Employers۪ Training Resource, a county agency that provides career counseling and job search assistance to people out of work.
Kern County۪s April unemployment rate was 9.7 percent, compared with 6.1 percent in California and 4.8 percent nationally, so de Camacho is busy these days.
“I۪ve seen the resumes so I know the job histories, and every day I see a very professional or white collar job, and the next job after that is a step below, maybe not all the way down to blue collar but definitely backward, and the job after that they jump back up again,” she said. “There are wild swings of the pendulum.”
That۪s hard on a person۪s pride, de Camacho said.
“Some people come to grips with that and accept it, but others just can۪t understand why they have mad, crazy skills, even advanced degrees, but can۪t find work equivalent to what they had before,” she said.
She۪s patient with those in the latter camp, having experienced a backslide herself. At one point in her career, de Camacho took a job as a receptionist that she was overqualified for, but it was all she could find at the time.
Aaron Lasky, 47, is dealing with that now.
Lasky is so uncertain about the future that he has paid the rent for his southwest apartment through August, just in case. He spent the bulk of his career in magazine publishing, but got caught up in the consolidation and creative differences that have cost many in that field their jobs. So Lasky segued into property title research on the verge of the worst real estate slump in decades. Laid off from his last job, Lasky is now doing title research independently as a freelancer, with no benefits.
“I get about $28 an hour when I۪m working, but it comes and goes,” he said. “It۪s really sad because this country is based on advancing yourself, but it۪s so hard to do that anymore.”
Katie Cheena, 36, of southwest Bakersfield, also was laid off from the real estate industry. She worked as a typist for an escrow company until losing her job. Her unemployment benefits have run out and she has no job prospects, so she۪s thinking of going back to school to study medical coding, which she hopes will get her a job in a medical billing office.
“I was depressed, at first, but I۪ve bounced back,” she said. “I know I۪ll find something eventually.”
Kim Lynch, 43, of Oildale, is not nearly as upbeat. The single mother has been out of work for two years since a repetitive stress injury cost her her job as a custodian. So far she۪s resisted pressure to raid her retirement fund, but that۪s cost her eligibility for Medi-Cal because on paper she appears to have money.
“I۪m six or seven months behind on my rent,” said Lynch, weeping quietly as she described her plight. “I۪m just blessed that my landlord hasn۪t put us out.”
It۪s fairly typical for gains made on the way up the economic ladder to be wiped out on the way down because the safety nets of previous years are gone or diminished, said Yale۪s Hacker. Retirement pensions from big employers are all but extinct, eligibility requirements for unemployment insurance have tightened and there are limits, now, on how long the poor can receive welfare benefits. At the same time, gas, food and health care costs are soaring, a credit crunch has restricted the ability to borrow, and home equity lines often aren۪t available because so much real estate is in foreclosure or has lost value. On top of all that, baby boomers may have two generations to support, both children and aging parents.
It۪s a perfect storm too powerful for even the most motivated person to withstand alone, Hacker said. “We see an economy that has fundamentally transformed from shared risk toward a go-it-alone world in which both employers and the government have told workers they۪re on their own,” he said. “Left, right, center, I think there۪s broad agreement that too many hardworking people just aren۪t making it.”