US leads developed nations in percent of people working at low wage jobs

[gpatt0n]

The key fact is summarized in this paragraph from the report from the center for economic and policy research, a DC think tank.

 

If low-wage jobs act as a stepping stone to higher-paying work, then even a relatively high share of low-wage work may not be a serious social problem. If, however, as appears to be the case in much of the wealthy world, low-wage work is a persistent and recurring state for many workers, then low-wages may contribute to broader income and wealth inequality and constitute a threat to social cohesion.

 

The definition of low wage work is work performed at an hourly rate less than 2/3rds the average rate for all employed persons.

 

The study flies in the face of conventional wisdom in a variety of ways; first being the notion that growth in the economy has an impact on the percentage of people working in low wage jobs.

 

Lesson 1: Economic Growth is not a Solution to the Problem of Low-wage Work

Countries do not appear to “outgrow” low-wage work. Higher levels of GDP per capita, for example, are not associated with a reduction in the share of low-wage workers.

 

Second, the report suggests that a strong labor movement does correlate to lower levels of low wage work but other factors are at play as well.

 

Collective bargaining, however, is not the only “inclusive” labor-market institution. Other important inclusive institutions include minimum wages, employment-protection legislation, the enforcement of national labor laws, and the benefit systems for the jobless and low-income households.

 

The third observation is that the US, which recorded the highest percentage of low wage workers as a percentage of the workforce is simply not a good example of best practices; rather our model, which has shown grown in the percentage of low wage workers over the past 30 years, is best valued as a demonstration of what not to do.

 

Coming in for specific criticism was the EITC - earned income tax credit program which had negative overall implications for workers.

 

The EITC may also have a perverse impact on the wages of workers who do not qualify for the program.14 Since the EITC significantly raises the after-tax wages of many eligible low-wage workers, the EITC effectively raises the labor supply for eligible workers, which may act to lower the before-tax wages paid by employers. The EITC more than compensates recipients for any decline in the wage employers paid, but a large share of low-wage workers, especially those without children or in families with other adults in work, experience only the supply-induced reduction in the hourly wage because they are not eligible for the EITC (or receive much smaller payments). Rothstein estimates that the net result of these gains and losses for different types of workers is that an additional dollar spent on the EITC only raises after-tax wages by about 73 cents.15 Leigh concludes that “a ten percent increase in the generosity of the EITC is associated with a five percent fall in the wages of high school dropouts and a two percent fall in the wages of those with only a high school diploma.”

 

The fourth lesson is that Low-wage Work is Not a Clear-cut Stepping Stone to Higher-wage Work.

 

If low-wage work were a short-term state that helped connect labor-market entrants or re-entrants to longer-term, well-paid employment, high shares of low-wage work would be less of a social concern. Indeed, if low-wage work facilitated transitions from unemployment to well-paid jobs, countries might want to encourage the creation of a low-wage sector to improve workers’ welfare in the long term.

 

But research shows that for the vast majority of low wage workers, this notion is pie in the sky.

 

Based on an analysis of data ... (found) ... that low-wage work has “almost as large an adverse effect as unemployment” on low-wage workers’ future employment prospects.

 

The final lesson from this research though is the most astounding!

 

Yes, in the United States of America, this low-wage conundrum is among the least important issues facing low wage workers.

 

U.S. labor law offers workers remarkably few protections. U.S. workers, for example, have the lowest level of employment security in the OECD25 and no legal right to paid vacations,26 paid sick days,27 or paid parental leave.28 The low level of union coverage in the United States means that contractual obligations generally don’t make up for the lack of legal guarantees.

In the absence of legal or contractual rights, low-wage workers are the least likely to have access to core benefits. Almost half of private-sector workers in the bottom fourth of the wage distribution in 2010, for example, had no paid vacations. In the same year, about 68 percent of private-sector workers in the bottom fourth of the wage distribution had no paid sick days, compared to only about 11 percent of workers in the top fourth.29 In the U.S. context, however, probably the most critical problem facing low-wage workers is the lack of access to health care. Rho and Schmitt estimate that in 2008, more than half (54 percent) of workers in the bottom wage quintile did not have employer-provided health insurance and more than one-third (37 percent) had no health insurance of any kind, private or public.30 The 37 percent non-coverage rate for the bottom quintile of wage earners in 2008 was up from 15 percent in 1979.

 

Bottom line, what is communicated is that when you work for wages below about $12/hr in today's economy, your willingness to accept the low-wage status defines you as a drudge or dolt by the labor market. To exit that status you will have to either get a degree or a certification and if you get that degree, diploma or certification and don't immediately cash it in for a better paying job, your chances of exiting the low-wage class become even more difficult.

 

Here is the complete report: low-wage-2012-01.pdf

 

pubby

[converse]

So what is your solution? Raise the minimum wage? Require businesses to pay for vacation time, sick days, and parental leave? Mandate labor organization in every business?

 

How many of these do you offer people who work for Paulding.com?

Do you have set salaries higher than minimum wage?

Do you offer paid vacation, sick days, and maternity leave?

Are you a union shop?

 

Since this is such an astounding find, I’d like to know what you doing with your business to lead the way in a better direction.

[xxrsellars]

So what is your solution? Raise the minimum wage? Require businesses to pay for vacation time, sick days, and parental leave? Mandate labor organization in every business?

 

How many of these do you offer people who work for Paulding.com?

Do you have set salaries higher than minimum wage?

Do you offer paid vacation, sick days, and maternity leave?

Are you a union shop?

 

Since this is such an astounding find, I’d like to know what you doing with your business to lead the way in a better direction.

 

 

[converse]

Pubby,

 

You must have missed my question so I'm bumping this back up.

I am still very curious about what you are doing as a business owner to combat the lower income issues you mentioned above.

[halo 2]

I think that no matter who our president is, Democrat or Republican that there is a true villain in our midst that controls everything. They Divide and conquer us by pitting us all against each other to draw attention to the real travesties happening in our country. I think Judge Napolitano had it 100% correct when he was on his Last show prior to being fired by FOX.... His video of WHAT IF... thats the sad but true facts.