If You Care about Economic Growth, Feed a Fast Food Worker
Low-wage workers in cities across the country are standing up to demand fair wages and decent working conditions. Fast food workers, airline baggage handlers, taxi cab drivers, berry pickers, and retail employees are all part of a burgeoning, national low-wage worker movement that is important to us all. Their actions force us to recognize a chilling fact: America is becoming a low-wage nation.
The trends are stark. Nearly three in five jobs gained in the recovery from the financial crisis are in rapidly expanding low-wage service industries including retail, food services, cleaning, and healthcare support. At current growth rates, by 2020 nearly half (48 percent) of jobs will be in these low-wage sectors where most jobs pay at or near minimum wage.
Since 1979, even as American companies outsourced entire manufacturing industries and laid off millions of workers, productivity grew rapidly. Unfortunately, these gains have concentrated at the very top, leaving low- and middle-income families behind. While after-tax income has grown only 18 percent for the bottom quintile, the top one percent of households have seen their incomes increase by a staggering 275 percent.
A burgeoning body of research has begun to highlight the damaging consequences of this growing income inequality. In 2011, the International Monetary Fund۪s Jonathan Ostry argued these issues were partially to blame for the global financial crisis, and income disparity was linked to shorter economic growth periods. Similarly, the Organization for Economic Cooperation and Development (OECD) warned against high levels of income inequality and advocated aggressive changes to tax and spending programs as a solution.
Income inequality is not the inevitable result of market forces in a globalized economy. While global competition can certainly explain outsourcing in certain manufacturing industries, it fails to explain the depression of wages in unexportable service sector jobs. For example, in 1975, jet fuelers at SeaTac International Airport made the equivalent of over $61,000 in current wages. Today, they make just pennies above the minimum wage.
Workers have lost the collective power to demand better wages and to ensure that our laws and policies create economic stability and prosperity. While organized labor served as an effective counter-balance to powerful corporate lobbies throughout the 20th century, private sector union membership today stands at a paltry 6.6 percent.
Education reform alone isn۪t a viable solution either. According to the Bureau of Labor Statistics, two-thirds of the 30 occupations with the largest projected employment increase from 2012 to 2022 typically do not require postsecondary education for entry. Our economy has become a service economy, and we must work to improve the wages of workers in these sectors.
Nevertheless, the economic problems that we face are not unsolvable. Activists, policy experts, and public officials in states around the country are advancing important and innovative programs that can rein in corporate excess, improve economic growth, and generate prosperity for all working people.
These efforts should start with higher wage laws that would boost pay and stimulate buying, hiring, and production. A $15 federal minimum wage could inject up to $450 billion into the economy annually. That would give purchasing power to at least 51 million workers and indirectly benefit an additional 30 million, according to the Economic Policy Institute. That means about 64 percent of the workforce would be more able to buy cars, clothing, and food.
Substantial progress can be made at the state and local level as well. Many cities already have begun to develop better wage and labor standards including living wage laws, requirements that employers provide paid sick days, and worker retention policies designed to incentivize full-time employment.
Workers must also find new ways of asserting their influence. The growing unrest that we have seen around the country marks the beginning of what I hope will become a sustained movement to reshape our nation۪s economic priorities and reclaim prosperity for all Americans. To sustain and harness this energy, activists, and policymakers must develop new forms of worker organizations capable of responding to the needs of workers in the 21st century economy.
Today, workers must compete in an increasingly globalized, decentralized, subcontracted marketplace. And in a climate often hostile to workers۪ rights, as evidenced by Republican efforts to prevent the Chattanooga-based Volkswagen plant from joining the United Auto Workers union. Traditional union organizing building shop-by-shop bargaining units, negotiating contracts with single employers is no longer a viable strategy for building worker power in many of America۪s fastest-growing industries. But we have faced similar challenges before. Throughout American history, workers۪ organizations have evolved and adapted to respond to the unique challenges of the time. We have the capacity and ingenuity to do so again. We just need the commitment.
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David Rolf is president of SEIU Healthcare 775NW, which represents more than 43,000 long-term care workers in Washington State and Montana.
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