Facts About Low Wage Work
For generations, Americans shared a tacit understanding that if you worked hard, a livable income and basic securities would be yours. That promise has been broken. Today, more than 30 million men and women in this country work in jobs that pay poverty wages and provide few if any benefits.
A large body of research amassed over the past decade clearly demonstrates that the structural changes to the U.S. economy over the past 20 years resulting from globalization, industry deregulation and the computerization of the workforce have led to harsh working conditions, reduced benefits, and fewer opportunities for advancement for workers in low-wage jobs.
Workers in low-wage jobs are the least likely to be provided health care coverage for themselves and their families; they cannot afford the premiums on their own, so most do without. Sick pay, family leave and retirement benefits are virtually nonexistent. Their jobs leave these workers little flexibility to care for their children; quality childcare during “regular” business hours is unaffordable for most, and finding childcare during their many nighttime shifts is an even greater challenge. Low-wage workplaces are often physically damaging and emotionally degrading. High injury rates and unsafe conditions plague these locations, compounding the risks for workers without health insurance. With few opportunities for training or advancement, most are locked into these low-wage jobs.
That these conditions continue erodes Americans’ most cherished values of fairness, personal responsibility, hard work and perseverance, and sends the message that work does not pay. Failure to address this issue not only hurts these workers’ families, it erodes the functioning of America’s communities, its economy and our very notions of what democracy can achieve.
- Most workers in low wage jobs are adults. Teenagers comprise only seven percent of the low-wage workforce.
- Nearly two-thirds of the low-wage workforce is white. Yet African Americans and Latinos are over-represented in this group relative to their participation in the overall workforce. In fact, the proportion of minority workers in 2001 earning a low wage is substantial: 31.2 percent of African Americans and 40.4 percent of Latinos in contrast to 20 percent of white workers.
- Women make up 60 percent of the lower-paying workforce, even after a slight decline over the past two decades. Almost 30 percent of the female workforce is low-wage, in contrast to less than 20 percent of the male workforce. Of these women, three-fourths are white. Yet the proportion of minority women is significantly higher than white women: 35.8 percent and 46.6 of African American and Latino women in contrast to 26.2 percent of white women.
- Men have increased their share of the low-wage workforce reaching close to one-fifth of male workers.
- When it comes to education, it is not surprising that the low-wage workforce has less formal education than workers in more highly paid occupations. But contrary to the common belief that most low-wage workers lack a high school education, 40 percent have a high school diploma, 38 percent have at least some postsecondary education, and five percent have a college degree. The low-wage labor force overall is better educated today than it was a generation ago. This mirrors the increase in education in the general labor force.
MYTH: Low-Wage jobs are the ones you see in your neighborhood McDonald’s.
FACT: Fast food jobs constitute less than 5% of all low-end jobs. Low-wage, low-reward jobs are all around us and include: security guards, nurse’s aides and home health-care aides, child-care workers and educational assistants, maids and porters, call-center workers, bank tellers, data-entry keyers, cooks, food preparation workers, waiters and waitresses, cashiers and pharmacy assistants, hair dressers and manicurists, parking-lot attendants, hotel receptionists and clerks, ambulance drivers, poultry, fish and meat processors, sewing-machine operators, laundry and dry-cleaning operators, and agricultural workers.
MYTH: Low-wage jobs are unskilled.
FACT: As important as these jobs are, most of us do not even notice them. When we do so, it is almost always in a negative light. In the public view, low-wage jobs tend to be lumped together and referred to as “hamburger flipper,” insinuating both a lack of real skill and social value. Policy analysts and public officials refer to “low--wage, low-skilled” jobs as if the two terms were inseparable. This mistakenly assumes that if a job pays poorly, it must be because it does not call for many skills. In fact, these jobs require knowledge, patience, care and communication. Most of them require constant interaction with people, whether they are a patient in a health-care setting, a child in a day-care center, a guest in a hotel, a tenant in a commercial office building, or a customer in a department store.
MYTH: Most low-wage workers are teenagers, illegal immigrants or high school dropouts.
FACT: America’s low-wage workers are mostly (nearly two-thirds) white, female, high school educated and have family responsibilities. Teenagers comprise only 7% of the low-wage workforce. Minorities and women are disproportionately found in low-wage jobs and occupy the lower rungs of the ladder within this workforce.
MYTH: Enduring the harshness of low-wage jobs is only temporary; since they are merely a stepping-stone to better paying jobs.
FACT: Mobility will not bring significant advancement to most low-wage workers. Even after a 25 year period, half of those in the lowest 20 percent of wage earners had not moved above that group and of those that moved half had only moved to the next highest wage group, still below the median wage. Low-wage jobs, historically have had few career ladders. Today, they offer even fewer.
MYTH: Reskilling will solve the problem
FACT: Of course, better education and fluency in new technologies are essential to improve job options of this and the next generation of workers. Yet, these labor intensive industries will continue to demand large numbers of workers regardless of individual mobility and these are the growing sectors of our economy. In the next ten years, the low end of the job market will account for more than 30% of the American workforce. Employers will hire nearly twice as many food-service workers as software engineers, hire as many cashiers as they do computer-support specialists and hire more than twice the number of customer-service representatives as they do computer systems analysts. The reskilling approach will do little to improve the lives of most workers in these low-wage jobs, jobs that will continue to grow as a proportion of our economy. What these workers need is to be adequately rewarded for the skills they already possess.
MYTH: Globalization stops us from doing anything about the problem.
FACT: As profound as the impact of global trade has been on our economy, it does not preclude improving the wages and working conditions for lower-wage workers. Only a small portion of low-wage jobs are actually in industries such as manufacturing that compete globally. Most lower-wage jobs are and will continue to be in the non-tradable service and retail sectors. Checking out groceries, waiting on tables, servicing office equipment, caring for children, tending the sick and cleaning up for the rest of us must take place in a specific location where the child, patient or customer is present.
Other industrialized countries competing in the same global markets as the United States have made political and business choices to ensure that all workers can rely on a safety net. As a result, workers in similar jobs in other industrialized countries have fared far better than American workers. Low-income Americans have living standards that are 13% below that of low-income Germans, 17% below low-income Belgians and 24% below the average income of the bottom 20% of Swedes. This is despite the fact that the median American enjoys a standard of living far above the median German, Belgian or Swede.
MYTH: Low-wage jobs are merely the result of an efficient market and we as a society have little control over this problem.
FACT: Low-wage workers face a world in which they have little power to change their conditions—a result of our creation, not natural law. Over the past quarter century, a variety of political, economic and corporate decisions undercut the bargaining power of the average worker, but especially those in the lower strata of the workforce. Those decisions included the push to increase global trade and open global markets, the increase of immigrant workers into the United States, government efforts to deregulate industries that had been highly unionized, Federal Reserve policies that concentrated on reducing the threats of inflation, and a corporate ideological shift that eliminated the postwar social contract with workers and emphasized a principle of maximizing shareholder value. These decisions contributed to the deterioration in low-wage conditions and a worsening of disparities in income and wealth.During this same period, the most vulnerable workers were deprived of many of the institutions, laws and political allies that generally helped to counterbalance these forces. In 1950, the number of workers who were fired, harassed, or threatened for trying to organize a union was in the hundreds each year. By 1990, that number exceeded 20,000. Private sector unionization rates plummeted from 25% of the workforce in 1979 to 11% today. The value of the minimum wage fell 30% during the 1980s. Despite legislative increases in 1990 and 1991 and again in 1996 and 1997, the value of the minimum wage in 1999 was still 21% less than in 1979.