Another fiscal cliff looms for low-wage workers

Updated
Protestors sit outside the Walmart store Friday Nov. 23, 2012 in Paramount, Calif. Wal-Mart employees and union supporters are taking part in today's...
Protestors sit outside the Walmart store Friday Nov. 23, 2012 in Paramount, Calif. Wal-Mart employees and union supporters are taking part in today's...
AP Photo/Nick Ut

While lawmakers in Washington continue to spar over tax cuts for the wealthiest 2% of the country, there’s been a parallel awakening in America’s low-wage labor force. Millions of American workers struggling to get by on minimum wage (or slightly above) have been teetering on the edge of their own fiscal cliff for decades—and some say they aren’t going to take it anymore.

Last week in New York City, hundreds of fast food workers went on strike demanding their employers to “supersize” their wages. On Thanksgiving and Black Friday, Walmart workers in 100 cities across 46 states walked off the job to make their voices heard in protest. But “McJobs” are nothing new. So what’s behind this new wave of protests? And why has organizing this segment of American workers taken so long?

While it’s unfair to blame the plight of all low-wage workers on Walmart, the company is a pretty easy target. In 2011, Walmart earned $15.7 billion in profit. And while the Walton family earns more than the bottom 40% of the country, there are reports that up to 80% of Walmart store employees rely on food stamps.

Meanwhile, in 2013, Walmart employees can look forward to paying anywhere from eight to 36% more for their health care premiums. Not surprisingly, Walmart workers are also the top recipients of Medicaid in several states.

In short, the U.S. taxpayer subsidizes America’s largest employer to the tune of billions of dollars in social programs because it refuses to pay a living wage. If that isn’t a form of corporate welfare, then I don’t know what is.

To be fair, Walmart does pay more than the fast-food industry. According to the Bureau of Labor Statistics, fast-food workers earn less than in any other industry in the country. While rhetoric in Washington focuses on the need for the president to create jobs, shouldn’t the emphasis really be on creating jobs that pay a living wage and allow Americans to be self-sufficient?

One of the experts I turn to when I have these kinds of questions is renowned urban economist Richard Florida. He’s been writing for years about the need to upgrade service industry jobs, similar to what the country did for manufacturing jobs during the Great Depression and New Deal.

“Seems to me the fiscal cliff, while important, is a distraction from what we as a country need to do to get back on track,” says Florida. “We have to address the gaping class divide and huge and widening inequality we face.  To do that we need a new social compact which addresses the 60 million Americans who currently toil in low wage, low skill temporary service jobs—nearly half of our workforce.  Add in those who are poor, unemployed or underemployed, there are 66% of Americans who are sinking and struggling economically. While politicians fiddle over the budget and talk about bringing manufacturing back or educate more Americans for knowledge jobs, we will not recover until we do for those 60 plus million jobs what we did for manufacturing jobs during the Great Depression and New Deal. We need to make them good, family supporting jobs. We can do that by engaging workers more fully and tapping their knowledge and intelligence as a source of innovation and productivity improvement—just like the best manufacturing companies do. Doing so would not only lift wages, but create the demand our economy needs to keep the recovery moving along.”


Florida’s ideas seem like common sense, and it would behoove lawmakers in Washington to meet with forward thinkers like him. In the meantime, American low-wage workers shouldn’t count on labor unions to save them.  Today, fewer than 12% of American workers belong to unions, and membership has been in steady decline for the past 70 years. It will take bold policy initiatives to upgrade service jobs and give more hard-working Americans a shot at becoming middle class.

The alternative is allowing the status quo to continue. It seems outrageous that anyone working for multi-billion dollar corporations should be dependent on social assistance for survival.  If we think we’re approaching a fiscal cliff now, wait until tens of millions of Americans begin retiring from their “McJobs” without any retirement savings.  That should terrify us all.

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Another fiscal cliff looms for low-wage workers

Updated