The Undeclared War on America's Middle Class

By Thom Hartmann, AlterNet
Posted on September 6, 2006
http://www.alternet.org/story/41192/

This excerpt is reprinted with permission from Screwed: The Undeclared War Against the Middle Class by Thom Hartmann; Berrett Koehler Publishers, 2006.

You can't be middle class if you earn the minimum wage in America today.

The American dream and the American reality have collided. In America we have always said that if you work hard and play by the rules, you can take care of yourself and your family. But the minimum wage is just $5.15 per hour. With a 40-hour workweek, that comes to a gross income of $9,888 per year. Nobody can support a family, own a home, buy health insurance, or retire decently on $9,888 per year!

What's more, 30 million Americans -- one in four U.S. workers -- make less than $9 per hour, or just $17,280 a year. That's not a living wage either.

The U.S. Census Bureau's statistics for 2004 show the official poverty rate at 12.7 percent of the population, which put the number of people officially living in poverty in the United States at 37 million. For a family of four, the poverty threshold was listed as $19,307. If the head of that family of four were a single mother working full-time for the government-mandated minimum wage, she couldn't even rise above the government's own definition of poverty.

Becoming middle class in America today is like scaling a cliff. Most middle-class Americans are clinging to the edge with their fingernails, trying not to fall. In the 1950s middle-class families could live comfortably if just one parent worked. Today more than 60 percent of mothers with children under six are in the work force. Not only do both parents work but often at least one of those parents works two or more jobs.

Middle class at 80 hours per week

In a 2005 article in the Chicago Tribune, reporters Stephen Franklin and Barbara Rose introduce us to Muyiwa Jaiyeola. Jaiyeola, who is 33 years old, works a 40-hour week as a salesman at a Sears store, then works another 20 hours in the stockroom of a Gap store in downtown Chicago. When Jaiyeola pulled two all-night shifts at his stockroom job in late August, he was able to sleep only two hours in the afternoon, then two more in the morning before going back to his sales job. He hoped to nap during his break in the middle of the night.

Jaiyeola is not hoping to get rich -- he's just trying to pay his bills. Working two jobs at this wage level is what it takes to be middle class these days. And he's not alone. According to Franklin and Rose:

Nearly 7.6 million Americans straddle two or more jobs and must find time to work, sleep and live somewhat contorted lives in a very full 24 hours. According to a 2001 U.S. Labor Department survey, most workplace moonlighters do it because they want or need extra money to pay bills ...

Those who specifically need the extra work to pay bills are most often women who take care of their families, and divorced, widowed or separated workers. For a quarter of the American work force, not only is the American dream not a reality, no part of it is.

Low wages are being paid not only to entry-level workers at places like Wal-Mart and McDonald's but also to adults like Jaiyeola who have work experience. The people being forced to work two jobs to make a living are the heartbeat of our society. They are child-care workers and nursing home workers, janitors and security guards, salespeople and stockers. They often have the most hazardous jobs, the late-night jobs -- the jobs that rarely include benefits.

Americans have traditionally believed in an economy where those who make a contribution are rewarded. A man like Jaiyeola should be able to work eight hours at Sears and then go home.

Low prices, low paycheck

Cons argue that we have to choose between having high wages and having low prices. They are wrong.

Take the case of Wal-Mart. According to the United Food and Commercial Workers union (UFCW), Wal-Mart could pay each employee a dollar more per hour if the company increased its prices by a half penny per dollar. For example, a $2 pair of socks would then cost $2.01. This minimal increase would add up to $1,800 annually for each employee.

I wouldn't mind paying more for a pair of socks if it meant that my fellow Americans would be able to pay for good health care. That would save me money because right now Wal-Mart's uninsured employees run up hundreds of thousands of dollars in bills at emergency treatment centers when their problems often could have been solved more cheaply and with better results had they been caught earlier at a doctor's office.

And I wouldn't mind paying one cent more for a pair of socks if it meant that parents could be home at night and on the weekends spending quality time with their kids. That's a real family value.

Here's what all this talk about wages really comes down to: Would you rather pay 10 percent more at Wal-Mart and get 30 percent more in your paycheck, or would you rather have lower prices and an even lower paycheck? That's the real choice: We're either spiraling up into a strong middle class, or we're spiraling down toward serfdom.

Looking at the arc of U.S. history, we discover we've been on a downward spiral ever since Ronald Reagan declared war on working people in 1981. Companies cut prices and then cut wages so they can still turn a hefty profit. Folks whose wages have been cut can't afford to shop at midrange stores like Macy's, so they have to buy at "low-wage" discount stores like Wal-Mart. That drives more midrange stores out of business and increases pressure on discount stores to send their prices even lower. To compensate for lower prices, they lower wages so they can still turn a hefty profit. On and on it goes -- until the people working those jobs are no longer middle class and have to work two or three jobs to survive.

Our choice is not between low prices at Wal-Mart and high prices at Wal-Mart. It's between low prices at Wal-Mart with lousy paychecks and no protection for labor, and the prices Wal-Mart had when Sam Walton ran the company and nearly everything was made in the United States and people had good union jobs and decent paychecks.

The choice is ultimately about whether we want to have a middle class in this country.

Why unions?

Unless you are a CEO, you don't have a lot of leverage to demand benefits at your workplace. Every year or two, you might go to your boss and ask for a raise or an extra day of vacation, but usually you can't do much about what hours you work, what health benefits you receive, or how your retirement benefits are structured. Unions give workers that leverage.

Unions are designed to give workers a voice in decisions that affect their jobs. They allow workers to negotiate with their employers for wages, health benefits, retirement benefits, and good working conditions. In the best circumstances, unions partner with companies -- both have an interest in satisfied, happy workers.

Unions create a middle class by allowing you and me to ask for the wages and the benefits we need to become or remain middle class. Unionized workers earn higher wages, have better benefits, enjoy greater job stability, and work in a safer environment. In 2003 union workers earned an average of 27 percent more than nonunionized workers. Seventy-three percent of union workers received medical benefits compared with just 51 percent of nonunion workers.

And 79 percent of union workers have pension plans. Cons have slandered unions for more than a hundred years. Professional people have bought the line that it is unprofessional to be in a union, that only blue-collar workers unionize. People worried about their status and legitimacy -- like nurses -- tend not to join unions.

But it's not true that unions are just for blue-collar workers. Unions are for anyone who wants to be middle class. Teachers are almost all unionized. Actors -- most of whom are not Sean Penn or Charlize Theron and don't get paid big bucks -- are almost all unionized. Anyone who works needs the rights that unions can provide.

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