Partially Yours

Iron Workers, not Seasonal Workers
Building Trades Unemployment Insurance Rally (by AFL-CIO, on Flickr)

An aspect of South’s version of the United States in 2032 has raised a question with a few people. How, they wonder, could wages have collapsed so far that most working people are part of the “working poor”?

Our Hero Luis – manager of a garage that adds armor and ballistic glass to rich people’s vehicles – notes that his employees work full-time and still can’t afford to eat enough or live anyplace other than tent cities dubbed Ryantowns (the 21st-Century answer to the Hooverville).

It so happens that a couple modern-day news items help explain this.

On 23 July, the Carsey Institute of the University of New Hampshire published Wanting More but Working Less: Involuntary Part-Time Employment and Economic Vulnerability. Its main thesis: that the rate of involuntary part-time employment (that is, people who want to work full-time but can only find part-time work) has doubled between 2007 and 2012 (to 8.2 million in July 2013, per BLS) and that such employment is a key factor in poverty. One in four part-time workers lives below the poverty line, as opposed to one in twenty full-time workers. Keep in mind that benefits are nearly unknown in part-time work, meaning no paid vacation, sick time, health insurance, or 401(k)s. That’s why it’s so popular among employers, especially in those sectors where the minimum wage is the rule.

By the way…in case you want to blame this situation on Obamacare, keep in mind that the beginning of the study period predates the Affordable Care Act by three years.

The Institute couldn’t have come up with a better illustration of this issue than the McDonald’s budget flap and subsequent fast-food employee protests. In case you missed it, McDonald’s – as a service to its mostly minimum-wage workers – published a sample budget proving that if you work 1.875 full-time jobs (75 hours a week at the Federal minimum wage of $7.25 an hour), have roommates, don’t eat, heat your home, drive or get sick, you might not starve to death (except for that not-eating thing). Since part-time employment is the norm in the food service, logistics and low-end retail sectors, this actually means McDonald’s workers will need three or four part-time jobs in order to reach that $2060 net monthly income proposed by the budget.

Lest you think this is all about kids earning pocket money after school: 87.9% of those who would benefit from an increase in the federal minimum wage are 20 or older, 35.8% are married, and 28% are parents.

The McDonald’s budget accomplished two things: (a) it showed that not even McDonald’s believes its employees can live on what it pays, and (b) it showed people who make more than the minimum wage just how close to the financial bone the folks who sell them their Big Macs really are. Forbes helpfully pointed out that it’s not really that bad, since minimum-wage workers are eligible for SNAP (food assistance, formerly food stamps), earned income tax credits and Medicaid – all of which have long been targets for Republican budget-cutters.

So these people will just work their way up to better-paying jobs, right? Perhaps not. According to the National Employment Law Project, low-wage jobs (median hourly wages of $7.69 to $13.83) made up 21% of job losses in the Great Recession, but 58% of jobs gained in the recovery, while middle-income jobs accounted for 60% of job losses but only 22% of job gains. The Wall Street Journal reported Labor Department figures showing that 284,000 college graduates (including 37,000 advanced-degree holders) worked minimum-wage jobs in 2012. (Remember, you go to college so you don’t have to wait tables or restock warehouses.) Finally, if those McDonald’s workers are going to work their way up the ladder, it won’t be at McDonald’s: NELP found that front-line jobs (cooks, cashiers) make up 89.1% of fast-food industry positions, with another 8.7% consisting of front-line supervisors (who make a whopping $13.04 hourly on average).

McKinsey Global survey resultsCan’t happen to you? Don’t count on it. A McKinsey Global Institute U.S. Jobs Survey asked corporate hiring authorities, “In what ways will your company’s workforce change over the next five years?” Over 36% said “more part-time workers.” Only 10.4% said “more offshoring,” perhaps because Chinese workers are starting to demand decent wages.

That’s the state of play with a safety net (however frayed) and government regulation.

Now, assume the wage floors (unemployment insurance, SNAP, Social Security, minimum-wage laws, union contracts) are gone, long a Republican policy goal. Assume also that regulation is nonexistent rather than simply minimal (in South, most non-military, non-law enforcement government functions have been abolished or zero-funded). Your choices then are to either work or starve. What do you think will happen to wages? How about benefits? Remember that unlike elsewhere in the developed world, there are no U.S. federal laws requiring any of the things we consider benefits today. That’s partly how the world of South got the way it is.

Given this, would you take that $4/hour, no-benefits job at the rendering plant? Hell, if it’s full time, it beats having to work two crappy jobs. Think you’ll send your 13YO kid to work instead of school? Yeah, Junior gets to earn his keep. That’s how it was in pre-New Deal America.

A personal note: I’m caught up in this, too. After sixteen months of unemployment, it looks like I’ll finally be going back to work – part-time. Master’s degree, 30 years of work experience. Welcome to the New Economy.

 

What’s going on with South? I’m closing in on the end of a major edit/revision that I hope to have done this month. Then it’s time for beta readers to have their swat at it. I’m aiming to have it on the market by late fall. Stand by for further developments.

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