Conservative Culture: America's Wage Slaves Are Getting Crushed Making Corporate Plutocrats Rich

America's Wage Slaves Are Getting Crushed Making Corporate Plutocrats Rich

In cities all across the country, workers stand on street corners, line up in alleys or wait in a neon-lit beauty salon for rickety vans to whisk them off to warehouses miles away. Some vans are so packed that to get to work, people must squat on milk crates, sit on the laps of passengers they do not know or sometimes lie on the floor, the other workers’ feet on top of them.

This is not Mexico. It is not Guatemala or Honduras. This is Chicago, New Jersey, Boston.

The people here are not day laborers looking for an odd job from a passing contractor. They are regular employees of temp agencies working in the supply chain of many of America’s largest companies – Walmart, Macy’s, Nike, Frito-Lay. They make our frozen pizzas, sort the recycling from our trash, cut our vegetables and clean our imported fish. They unload clothing and toys made overseas and pack them to fill our store shelves. They are as important to the global economy as shipping containers and Asian garment workers.

Many get by on minimum wage, renting rooms in rundown houses, eating dinners of beans and potatoes, and surviving on food banks and taxpayer-funded health care. They almost never get benefits and have little opportunity for advancement.

Across America, temporary work has become a mainstay of the economy, leading to the proliferation of what researchers have begun to call “temp towns.” They are often dense Latino neighborhoods teeming with temp agencies. Or they are cities where it has become nearly impossible even for whites and African-Americans with vocational training to find factory and warehouse work without first being directed to a temp firm.

In June, the Labor Department reported [3] that the nation had more temp workers than ever before: 2.7 million. Overall, almost one-fifth of the total job growth since the recession ended in mid-2009 has been in the temp sector, federal data shows. But according to the American Staffing Association [4], the temp industry’s trade group, the pool is even larger: Every year, a tenth of all U.S. workers finds a job at a staffing agency.

The proportion of temp workers in the labor force reached its peak in early 2000 before the 2001 slump and then the Great Recession. But as the economy continues its slow, uneven recovery, temp work is roaring back 10 times faster than private-sector employment as a whole – a pace “exceeding even the dramatic run-up of the early 1990s,” according to [5] the staffing association.

The overwhelming majority of that growth has come in blue-collar work in factories and warehouses, as the temp industry sheds the Kelly Girl image of the past. Last year, more than one in every 20 blue-collar workers was a temp.

Several temp agencies, such as Adecco and Manpower, are now among the largest employers in the United States. One list [6] put Kelly Services as second only to Walmart.

“We’re seeing just more and more industries using business models that attempt to change the employment relationship or obscure the employment relationship,” said Mary Beth Maxwell, a top official in the Labor Department’s Wage and Hour Division. “While it’s certainly not a new phenomenon, it’s rapidly escalating. In the last 10 to 15 years, there’s just a big shift to this for a lot more workers – which makes them a lot more vulnerable.”

The temp system insulates the host companies from workers’ compensation claims, unemployment taxes, union drives and the duty to ensure that their workers are citizens or legal immigrants. In turn, the temps suffer high injury rates, according to federal officials and academic studies, and many of them endure hours of unpaid waiting and face fees that depress their pay below minimum wage.

The rise of the blue-collar permatemp helps explain one of the most troubling aspects of the phlegmatic recovery. Despite a soaring stock market and steady economic growth, many workers are returning to temporary or part-time jobs. This trend is intensifying America’s decades-long rise in income inequality, in which low- and middle-income workers have seen their real wages stagnate or decline [7]. On average, temps earn 25 percent less than permanent workers.

The CEO of Manpower is like a bandit without the risks. He made $5.5 million over 6 years for supplying wage slaves to other plutocrats. He, like the Walmart family take more out of the economy and suppress more economic activity than they create.

Republican Theories About Poverty, and the Real Reason Americans Can’t Make Ends Meet

Republican Theories About Poverty, and the Real Reason Americans Can’t Make Ends Meet

When is a secret not at all secret? Consider the fact that one in three Americans are poor, if we define it as struggling to cover the basic necessities of life. That's according to a Census Bureau analysis, and it was reported in the New York Times, but I have yet to hear a politician or pundit make reference to this eye-opening reality of our vaunted “new economy.”

In 2011, the Census Bureau took a new look at the “near-poor” – Americans with incomes between 100 and 150 percent of the poverty line. They found that this group, most of whom earn paychecks and pay taxes, represented a whopping one in six U.S. households – a figure that was almost twice as high as had previously been thought.

When those under the poverty line are added, Census found that a stunning 33 percent of the population was struggling to make ends meet in 2010. Analyzing the Census data, the Working Poor Project suggested [3] that the number of near-poor, which they define as those making between 100 and 200 percent of the poverty line, continued to inch up in 2011 as many returning to work in this sluggish recovery have been forced to settle for lower-paying service jobs.

Nearly four years after economists tell us the “recovery” began, almost half of all American households [4] lack enough savings to stay above the poverty line for three months or more if they should find themselves out of work. Another third are living paycheck to paycheck, teetering on the brink with no savings at all.

It would require a lengthy sociological treatise to fully explain why this isn't considered a huge national crisis. But one part of the equation is the existence of a long-standing and ideologically informed project by the right to portray the burden of living in or near poverty as a liberal delusion. In these narratives, which come in a variety of forms, the poor have it pretty darn good – good enough that we really shouldn't spend much time thinking about them.

For these conservative think-tankers, pundits and politicians, obscuring America's grinding poverty and spiraling inequality is an exercise in service of a status quo that works pretty well for them, but not for most families.

1. But the poor have color TVs.

Consider the boilerplate conservative column [5] about how many wondrous household appliances the average low-income household owns. Back in the 1930s, this argument goes, poor people didn't have running water, but now they have color TVs, so life is good.

As I write this, my local Craigslist [6] offers multiple televisions, a dining set, several treadmills, a mountain bike, an oven (with hood), a blender, a coffeemaker, a slew of couches and beds, a piano, a hot-tub (needs repair) and a complete stereo system, all free to anyone who will pick them up. We live in a consumer economy that creates an abundance of surplus and rapidly obsolete goods, and people who struggle to put food on the table can nonetheless get their hands on all manner of electronics for nothing.

2. The poor have lots of room to enjoy poverty.

A similar argument holds that in the United States, poor people have more living space, on average, than low-income households in other developed nations. As the Wall Street Journal was eager to point out [7], “The average living space for poor American households is 1,200 square feet. In Europe, the average space for all households, not just the poor, is 1,000 square feet.”

Perhaps that's true, but it's also divorced from context. There is a simple matter of population density at work: in the core states of the European Union, there are 120 people per square kilometer; in the United States, we only have 29 people per kilometer. And the average is a bit misleading as it includes the rural poor – low-income households in tightly packed urban centers don't tend to have 1,200-square-foot apartments.

3. The poor are actually rolling in money.

A new and equally distorted argument entered the conservative discourse just recently. It holds that poor families receive $168 per day in government benefits – more than the median weekly income in this country. If that were true, low-income households in the United States would enjoy quite comfortable living standards.

But as I noted last month, that number is inflated by around eight-fold [8]. The claim originated with Robert Rector at the Heritage Foundation and then underwent some revisions on its journey to Republican congressional staffers, and finally to the conservative media. It gets to that number by counting things like federal aid to rebuild communities after natural disasters as “welfare,” including programs that assist the middle class and the wealthy and then dividing the costs of all these programs by the number of households under the poverty line, despite the fact that many more families benefit from them.

4. It’s just how they are.

And then there are the ever-popular cultural explanations for poverty. This is a storyline based on confusing correlation with causation – a rookie mistake in any introductory college class.

The Heritage Foundation, for example (it's Robert Rector again), sees a lot of poor, single-parent households, and would have you believe [9] that “the main causes of child poverty are low levels of parental work and the absence of fathers.”

But this gets the causal relationship wrong. The number of single-parent households exploded between the 1970s and the 1990s, more than doubling, [10] yet the poverty rate remained relatively constant. In fact, before the crash of 2008, the poverty rate was lower than it had been in the 1970s. So, as the rate of single-parent households skyrocketed, poverty declined a little bit. Saying single-parent homes create poverty is like claiming the rooster causes the sun to rise.

As I've noted [11] in the past, this is an essential piece of the “culture of poverty” narrative, and it is nonsense. Jean Hardisty, the author of Marriage as a Cure for Poverty: A Bogus Formula for Women, cited a number of studies showing that poor women have the same dreams as everyone else: they “often aspire to a romantic notion of marriage and family that features a white picket fence in the suburbs.” But low economic status leads to fewer marriages, not the other way around.

In 1998, the Fragile Families Study looked at 3,700 low-income unmarried couples in 20 U.S. cities. The authors found that 90 percent of the couples living together wanted to tie the knot, but only 15 percent had actually done so by the end of the one-year study period. And here’s the key finding: for every dollar that a man’s hourly wages increased, the odds that he’d get hitched by the end of the year rose by 5 percent. Men earning more than $25,000 during the year had twice the marriage rates of those making less than $25,000.

Writing up the findings for the Nation, Sharon Lerner noted that poverty itself “seems to make people feel less entitled to marry.” As one father in the survey put it, marriage means “not living from check to check.”

Why People Are Really Poor

During a period of less than 20 years beginning in the early 1980s, the American economy underwent dramatic changes. It was a period of policy-driven de-unionization and the offshoring of millions of decent manufacturing jobs. The tax code underwent dramatic changes, as CEO pay sky-rocketed and the financial sector came to represent a much larger share of our economic output than it had during the four decades or so following World War II.

And our distribution of income changed dramatically as well. During the 35 years prior to Ronald Reagan's election, the top one percent of U.S. households had taken in an average of 10 percent of the nation's income. When Reagan left office in 1988, those at the top were grabbing 15.5 percent of the pie, and by the time George W. Bush took office in 2000, they were taking over 20 percent of the nation's income.

Corporate America has discovered that it can make most of it's goods in Asia and pay Americans less than a living wage, all the while making record profits. They have no incentive to change because corporate America has lost any sense of patriotic responsibility to the country.

The Minimum Wage: Popular With the Public, But Not the Donor Class

The Minimum Wage: Popular With the Public, But Not the Donor Class

One of the best proposals to come out of the State of the Union was the President's proposal to raise the minimum wage to $9 an hour, phased in over three years, and tie it to the cost of living so it automatically adjusts. If anything, the proposed minimum wage is still too low. If the minimum wage had kept up with the rate of inflation, it would now be over $10. Still, Congress hasn’t raised the minimum wage in four years so $9 is an improvement over the current $7.25 and ensuring that it will adjust automatically will bring millions of workers out of poverty.

Raising the minimum wage benefits more than just low-wage workers. When people make more money, they spend more money and businesses benefit. The Economic Policy Institute estimated that raising the minimum wage to $9.80 would actually create jobs because more people could spend more money. Low-wage workers are more likely than any other income group to immediately spend any extra income on previously unaffordable basic needs or services. The increase in consumer spending increases demand, which in turn, results in new hiring.

On top of the economic benefits, raising the minimum wage has strong public support. A recent poll found that 73 percent support raising the minimum wage to $10 an hour in 2014 and indexing it to inflation—both a higher wage and a shorter time line than the President’s proposal. Another poll found that 78 percent of the general public believes the minimum wage should be high enough so that no family with a full-time worker falls below the official poverty line.

So, if it’s good for the economy and it has strong public support, why is raising the minimum wage such an uphill fight? Because wealthy and corporate interests would rather keep the wage low. In contrast to the broader public, only 40 percent of the wealthy support a minimum wage high enough to keep families out of poverty. When the minimum wage was last raised in 2007, the U.S. Chamber of Commerce, which strongly opposes raising the minimum wage, spent $53 million on lobbying. In short, raising the minimum wage is not a priority for wealthy and corporate interests, and as a result, it is not a priority for Congress.

We see this dynamic even more clearly when we look at the capital gains tax rate. In contrast to the minimum wage, the capital gains tax rate impacts a small, yet wealthy, percentage of the population. Over 70 percent of capital gains are estimated to go to just the top one percent of households in 2012. Yet, from 1997-2003, the capital gains tax rate was cut four times. While the maximum rate was increased to 20 percent as part of the “fiscal cliff” deal, polling shows that the majority of Americans think capital gains should be taxed at the same rate as ordinary income--39.6 percent for the top income bracket.

There is already opposition forming against raising the minimum wage, but it’s not just political ideology that will prevent it from being raised. Wealthy and corporate interests often set political and policy priorities and raising the minimum wage is not their priority-- regardless of the economic and social benefits.


Mijin Cha is a Senior Policy Analyst for the Sustainable Progress Initiative at Demos

What the corporate overlords are afraid of is that instead of getting a million dollar bonus for seating at a desk and reading e-mails all day is that they'll only get a $900k bonus. Which means they might have to cut back on the antique gold caviar dishes and drink one less bottle of imported champagne a month.