The Economic Policy Institute (EPI) reports that it has been seven years since Congress last increased the minimum wage, making this "the second largest stretch of government inaction since the minimum wage was enacted in 1938." The EPI released a statement of 562 economists, including four Nobel Prize winners, supporting an increase in minimum wage, a measure they believe "can significantly improve the lives of low-income workers and their families." Learn more about minimum wage and other labor terminology in the NOW glossary of labor terms.
But the trouble with wage trends doesn't end there. NOW's segment "The View from Main Street" continues to tell a story first reported a year ago of American workers facing major economic challenges. In the fall of 2003, over 450 union workers took a stand against meat-processing giant Tyson Foods in Jefferson, Wisconsin, striking to protest the company's decision to lower wages and cut benefits. But there were plenty of people eager to work for non-union wages and the strike broke down last winter. Tyson is now paying new workers less than the old starting wage.
The current story in Jefferson is just one example of a trend of middle and working class economic hardship. Even after the recession purportedly ended in November 2001, the job situation has been bleak for many. In the article "The Vanishing Middle-Class Job" (9/20/04), WASHINGTON POST reporter Griff Witte cited a Federal Reserve Bank study: "Of the 2.7 million jobs lost during and after the recession in 2001, the vast majority have been restructured out of existence." More and more American workers are forced to turn to new jobs coming to town, and these new jobs aren't like the old ones.
The New Jobs
With the reported 96,000 new nonfarm jobs this past September, it would seem that the job market is improving. Yet the Bureau of Labor Statistics reports that the number of jobs being created, on average, has barely kept up with population growth. Officially, there were 821,000 fewer jobs in September 2004 than there were in January 2001. (Read more about the changing face of unemployment.)
The bad news about the new jobs, for those who are finding them, is that they pay significantly less than the old ones. In 48 of the 50 states, "jobs in higher-paying industries have given way to jobs in lower-paying industries." That statistic comes from a January 2004 EPI economic snapshot that goes on to explain:
Nationwide, industries that are gaining jobs relative to industries that are losing jobs pay 21% less annually. For the 30 states that have lost jobs since the recession purportedly ended, this is the other shoe droppingnot only have jobs been lost, but in 29 of them the losses have been concentrated in higher paying sectors. And for 19 of the 20 states that have seen some small gain in jobs since the end of the recession, the jobs gained have been disproportionately in lower-paying sectors.
The EPI has created a chart based on Bureau of Labor Statistics data which compares the November 2003 average wage in growing industries to that in contracting industries, state by state. Look up what the difference was in your state (PDF). (Learn more about low wage work and workers in a Q&A with Beth Shulman, author of THE BETRAYAL OF WORK: HOW LOW-WAGE JOBS FAIL 30 MILLION AMERICANS.)
In addition, part-time jobs now represent what economists are calling a "disproportionate share" of the overall job market. One reason specialists cite for this change is the increase in job-based health insurance premiums, making it more difficult for employers to provide benefits.
But better economic times may be ahead. A USA TODAY article in early October 2004 reported that economic forecasters now expect job creation to grow at a faster pace at the end of 2004 and throughout 2005 than had been previously expected.
Take a look at the figures of a year ago when NOW first went to Jefferson, Wisconsin in "Downward Mobility" or learn more about the economic issues in play in Election 2004.
Sources: The Bureau of Labor Statistics; The Economic Policy Institute; THE NEW YORK TIMES; THE WASHINGTON POST