Monday, August 5, 2013

After Offshoring, What's Left? Low Paying Jobs.

From an article by James Surowiecki in the New Yorker (August 12, 2013) The Pay Is Too Damn Low:

Historically, low-wage work tended to be done either by the young or by women looking for part-time jobs to supplement family income. As the historian Bethany Moreton has shown, Walmart in its early days sought explicitly to hire underemployed married women. Fast-food workforces, meanwhile, were dominated by teen-agers. Now, though, plenty of family breadwinners are stuck in these jobs. That’s because, over the past three decades, the U.S. economy has done a poor job of creating good middle-class jobs; five of the six fastest-growing job categories today pay less than the median wage.

That’s why, as a recent study by the economists John Schmitt and Janelle Jones has shown, low-wage workers are older and better educated than ever. More important, more of them are relying on their paychecks not for pin money or to pay for Friday-night dates but, rather, to support families. Forty years ago, there was no expectation that fast-food or discount-retail jobs would provide a living wage, because these were not jobs that, in the main, adult heads of household did. Today, low-wage workers provide forty-six percent of their family’s income. It is that change which is driving the demand for higher pay.

The situation is the result of a tectonic shift in the American economy. In 1960, the country’s biggest employer, General Motors, was also its most profitable company and one of its best-paying. It had high profit margins and real pricing power, even as it was paying its workers union wages. And it was not alone: firms like Ford, Standard Oil, and Bethlehem Steel employed huge numbers of well-paid workers while earning big profits. Today, the country’s biggest employers are retailers and fast-food chains, almost all of which have built their businesses on low pay—they’ve striven to keep wages down and unions out—and low prices.

Note: I wrote a letter to the editor of the New Yorker:

In his excellent article "The Pay Is Too Damn Low" James Surowiecki makes one misstatement: "Apple employs just seventy-six thousand people". But between Apple and Nike alone they employee over 2 million people as "contract manufacturers" in Asia. Apple was not a good example. Maybe he could have mentioned America's second largest private sector employer, which is a temp agency called Kelly Services with 538,000 workers. Walmart also hires temps, calling them "flexible associates".

Also read: The China Toll - "The growing U.S. trade deficit with China cost more than 2.7 million jobs between 2001 and 2011, with job losses in every state."

1 comment:

  1. This is all true. I've also noticed that the job of paper delivery is no longer done by youngsters. The job is now mostly done by older adults, usually driving cars. I guess people are taking whatever scraps they can.