Working Poor, Two Words That Should Never Be Linked
by Carl Chancellor June 01, 2010 06:00 AM (PT)
http://uspoverty.change.org/blog/view/working_poor_two_words_that_should_never_be_linkedI have an assignment for any New York City councilmember still wavering on supporting a new bill mandating a "living wage" be paid to employees working on city-subsidized projects: read the book Both Hands Tied: Welfare Reform and the Race to the Bottom of the Low-Wage Labor Market by co-authors Jane L. Collins and Victoria Mayer.
The book, which examines the lives of 33 Milwaukee and Racine, Wisconsin women and their families trying to survive on minimum wage jobs, shares the harsh realities of employment in the low-wage labor market. While the book focuses on the impact of welfare reform (or, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, which made cash assistance both temporary and contingent on work outside the home) it nonetheless underscores a basic truth: when workers do not earn enough to make ends meet, taxpayers pick up the tab.
Collins, a professor at the University of Wisconsin-Madison, told me recently that the only group that benefits from low-wage jobs is corporations. Certainly the women she followed in her book for more than a year in 2004 were no better off once they began working. Despite working 40 hours a week, none of them were able to successfully break the cycle of poverty.
"There are tens of thousands (in Wisconsin) working 40 hours a week but are unable to afford secure housing, child care or medical insurance," Collins said. She said many of the women she followed for her book just couldn't "hold on to housing" when faced with meeting the cost of caring for children and paying rent. "Many families went through several episodes of eviction and homelessness."
Nationally, as a result of welfare reform millions of poor single mothers found work, almost always in low-wage, no-benefit jobs that still left them below the poverty line, in some cases taking home less than $9,500 a year. Almost without fail these women had to turn the state for additional aid.
In New York, where there is stiff resistance to living wage legislation from business and civic leaders, including Mayor Michael Bloomberg, the city is already being forced to spend about $260 million a year to support poor working families with child care services alone.
Why are we, taxpayers, footing the bill to allow developers and other businesses to hire cheap labor and provide no benefits?
One answer, at least according to Collins, is that we have allowed business interests to call the shots.
"Corporations have more rights than people," Collins said. "When there is an attempt to raise the minimum wage it can't be done because businesses object saying they can't afford it and they win." She said even efforts for benefits like sick leave, like a recent push in Wisconsin, are successfully blocked by business interests.
Another reason for this "race to the bottom," said the professor, has been a societal shift in attitude toward work. Collins notes in her book that prior to the mid-twentieth century most employers understood and accepted the notion of paying a wage that would support not only a worker but also his family. Most benefits and health insurance were tied to jobs.
However, as Collins and Mayer note in their book, "That agreement has broken on all fronts as family structure has changed and employers have off-loaded responsibilities." Collins cites the example of Walmart sending its employees to sign-up for Medicaid and food stamps.
Living wage legislation, like the bill being introduced by progressive NYC City Council members, is a modest step in ensuring that those workers at the bottom of the economic ladder can make ends meet by mandating that workers be paid at least $10 an hour plus benefits. That's right, $10 an hour. It doesn't sound like very much and it isn't, but it's still nearly 40 percent more than the minimum wage.
It's a crime that family breadwinners in America, many of them single mothers, go to jobs everyday, work hard and still bring home less than $15,000 a year (earning $7.25 an hour, the federal minimum wage). I'll say it again, it's a crime — one being perpetrated on millions of American families everyday.
As Both Hands Tied clearly shows, creating low-wage jobs does nothing to move families out of poverty and off of public assistance. And despite arguments to the contrary by Bloomberg and others, mandating a living wage (or even just $10 an hour) will not kill development, but it will give poor families a firmer financial foothold. For me that is the real bottom line; that's economic development I can believe in.
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