It’s shouldn’t be news to anyone that when lots of people are unemployed, it’s tough getting a raise or getting a job that pays as well as a previous one before the lay-offs happened. After all, there was a guy a century and a half ago who talked rather extensively about the negative impact of the “reserve army of the unemployed.” Negative, that is, for workers. For employers, a large reservoir of out-of-work people instills fear in those who still have a job: Don’t ask for more money, do whatever the boss says even if it’s wrong or unfair, don’t talk about starting a union and do put up with all kinds of impositions nobody should put up with because there is always a hungry guy ready to take your place if you get too uppity.
Despite the official end of the recession, the situation for workers remains tough. At last count, there was an average of 3.7 job-seekers for every job opening and some 25 million Americans were unemployed or underemployed. That’s the acute problem. But one of the chronic problems underlying it is the tremendous number of workers who earn low wages who have seen their benefits ever more reduced over the past couple decades and who have no collective bargaining power with which to change these two facts of life. Those low wages aren’t just low; their buying power is less than it was four-and-a-half decades ago.
At the Economic Policy Institute, Rebecca Thiess has analyzed the future of work and come to a number of both obvious and not so obvious conclusions. In a nutshell, she says, government policy directed toward creating access to good jobs for low-wage workers will accomplish more if it isn’t focused so much on raising educational levels or upgraded job skills and more on doing something about the buying power of the minimum wage, loss of health and retirement benefits, and the loss of workers’ bargaining power.
Contrary to the conventional wisdom, her analysis showed that:
…the education and training levels projected to be necessary for the labor force of 2020 shows that jobs will not require a significantly greater level of education or training than workers currently possess. Therefore, a simple increase in the share of workers with a college degree will not ensure that tomorrow’s economy generates better and more equitable outcomes than today’s economy.
Fact is, the workforce currently contains a much larger share of workers with at least a college degree than the projections indicate are needed for 2020.
What will produce more equitable outcomes?
Workers of the future, particularly low-wage workers, will only experience rising living standards if the policy status quo is replaced by more-progressive tax and transfer policies, increases in the real value of the minimum wage, a reversal of falling unionization rates, an expansion (and definitely not a retrenchment) of publicly financed social insurance programs, and, crucially, a real commitment to full employment.
Yes, a real commitment to full employment. Improving the wage situation depends on improving the job situation. The government can and should provide an assist. A first step ought to be raising the minimum wage to at least parity with its 1968 buying power. As my colleague Laura Clawson pointed out here last week, the United States is a low-wage nation when compared with other developed countries:
The growing prevalence of low-wage work in the United States contributes to income inequality from the bottom, just as the increasing wealth of the top 1 percent, and especially the top 0.1 percent, adds to inequality from the top. The middle is a shrinking place, and you can bet that, without a major shift of economic and political direction, its future is not only to shrink but to be be squeezed downward.
Policies can change that, just as it has in those other developed countries. But first there must be the will to propose such policies, and then the willingness to fight without retreat against those who benefit from the current situation.