More to Bad Jobs Than Low Hourly Pay

March 24, 2014

New York Times columnist Steven Greenhouse profiles a nurse’s aide and several other low-wage workers in Chattanooga, Tennessee to show why low-wage workers generally are “finding poverty harder to escape.”

One reason is simple enough. Their hourly pay rates are too low. All the profiled workers get somewhat more than the federal minimum, which applies in Tennessee and 28 other states — not, however, as much as the proposed $10.10 an hour. So the increase would help.

But low pay rates alone don’t account for the troubles the workers have paying for basic expenses. The nurse’s aide, for example, like a growing number of low-wage workers across the country, doesn’t have a regular work schedule, let alone a full-time job.

“For today’s low-wage, hourly workers, … scarce, unstable and unpredictable hours are the new norm,” write Professors Charlotte Alexander and Anna Haley-Lock.

Employers aren’t only cutting back on full-time jobs. Those that can are, in many cases, relying on “just-in-time” scheduling, i.e., adding and subtracting workers’ hours according to immediate need.

It’s reportedly common in restaurants and other retail businesses, which can now establish very short shifts — 15 minutes, in some cases — and use software to fill them, based on customer traffic, sales or predictors like weather conditions.

Workers may show up for what they think is a five-hour shift and be sent home early. They may be told they’ll need to put in extra hours — or to be available for them, with no guarantee they’ll be working.

They may have no regular hours at all, but instead have to call in daily — or be constantly accessible by phone. More commonly, their work days and/or hours change from week to week. And they don’t know what their schedule will be until a day or so before they’ve got to meet it.

“Even then,” said one chain restaurant worker, “it was only a guesstimate.”

Likewise, of course, the budget planning that low-income people are enjoined to practice. “I have been scheduled for as few as six hours in a week and as many as forty,” says a New York City sales associate. “How is anyone … supposed to plan a budget with such erratic schedules?”

And how is a parent supposed to manage childcare arrangements, when she’s sometimes needed, sometimes not, sometimes for far longer than scheduled — or at altogether different hours?

And how will she afford child care when a center may tack on a hefty fee for late pick-ups — or when her hours are suddenly, though perhaps (or perhaps not) temporarily cut in half?

Iffy schedules pose other problems for low-wage workers. For example, they can’t take on a second part-time job because they can’t commit to any work schedule, even if not another “just-in-time.”

They often can’t try to improve their prospects by getting more education or specialized training because they never know when or how often their work schedule will conflict with their classes.

The surges and plunges in working hours also wreak havoc on eligibility for many public benefits and the support they provide because recipients generally have to recertify, i.e., periodically reapply.

A woman in Massachusetts says, “A good month, I can work thirty-eight to forty-five hours and it just happens to be that month they want my pay stubs for food stamps. OK, the next month comes around I’ve worked three hours one week, twelve hours another week … They don’t want my pay stubs for that month.”

So she could lose at least part of her food stamp benefit — and then have to try to recover it. Temporary hours spikes can also jeopardize¬†childcare subsidies, WIC, housing assistance and Medicaid.

On the other hand, earnings plunges make it even more difficult for low-wage workers to qualify for unemployment benefits. Yet they’re at high risk for unemployment — in part because they’re expected to work whenever.

Finally, as many have written, the on-again, off-again, never-know-when schedules create high levels of stress for workers. They’re also harmfully stressful for their children, whose daily routines and caregivers constantly change.

CLASP and partners have identified two policies that some employers have adopted to mitigate the problems of unstable schedules for low-wage workers.

One, also favored by Professors Alexander and Haley-Lock, guarantees workers who’ve reported when told to a certain number of hours of pay.

Seven states and the District of Columbia actually have so-called “reporting pay” laws, but they vary considerable in whom they cover, the number of hours guaranteed and the required pay rate.

These laws may be on the books, but it’s doubtful they’re consistently enforced, since they hinge on vulnerable workers filing complaints. And, of course, they do nothing about schedules that constantly change.

Nor does the other policy, though it comes closer. It guarantees workers a set number of hours a week — or pay for those hours if there’s not enough work for them to do. Costco, among others (probably not very many), has a version of this policy.

There’s a business case to be made for a work guarantee. It can help reduce turnover, for example, and increase productivity — not only because workers know their jobs, but because they want to do them well.

But, as the CLASP report says, “relying solely on voluntary employer action will not suffice.” We’ll need new and/or revised laws and regulations to make bad jobs better in the rapidly-growing low-wage service sectors.


Why We Need Full Employment Policies Now

March 13, 2014

Awhile back, Dean Baker at the Center for Economic and Policy Research published a (free) book castigating progressives for “loser liberalism.” We’ve played into the hands of conservatives, he argued, by failing to focus on how they’ve structured markets to “redistribute income upward.”

This came not long after Rortybomb blogger Mike Konszal asserted that we’ve given in to “a kind of pity-charity liberal capitalism” because we’ve abandoned the vision of a government that empowers workers.

New York Times columnist Thomas Edsell picked up on this, saying that our focus on “means-tested transfer programs” like food stamps and long-term unemployment benefits leave “the most needy and vulnerable to the vagaries of public opinion” — a big mistake because hard times like these diminish sympathy for the less fortunate.

These critiques make me feel more than a little sensitive, since I’ve tended to focus on programs designed to compensate for the economic disadvantages of the poor and near-poor.

I’m not inclined to shift my focus to how markets are structured. Which is just as well because I don’t have the expertise.

But I do think it’s time to get a little balance here. So I want to take note of a major theme in the critiques — and another (free) book, co-authored by Baker and fellow economist-blogger Jared Bernstein.

The theme is the need for government policies that will create and sustain full employment.

We’d then have an economy where increased demand for goods and services wouldn’t create a more jobs because, with some limited exceptions, everyone who wanted a job had one — and was working for as many hours as s/he wanted to or could.

Or, as economists conceive it, the unemployment rate would be low enough so that increased demand would only drive up inflation.

Full employment would obviously solve our immediate jobless worker problems — especially the very high percent of workers who’ve been jobless a long time and seemingly will remain so as long as employers can chose to summarily reject them, as many apparently do.

But as ex-Wonkblogger Ezra Klein’s review of the Baker-Bernstein book says, full employment also creates the conditions for worker power — and the wages, benefits and other working conditions that power can gain.

It’s especially important in today’s economy, where unions represent only 6.7% of private-sector workers. This, combined with other developments, e.g., opportunities for businesses to shift jobs overseas or to states with laws that weaken unions, helps explain the fact that wages have flat-lined — except for those at the tippy-top.

It’s most important for workers without a college degree — in part because many who have one are perforce currently taking jobs that don’t require college-level skills. Hence an unemployment rate for the lowest-educated workers that’s three times higher than the rate for college graduates.

This is one reason Bernstein calls full employment “the best, if not the only, friend of the working class.” But it’s not the only reason.

When he analyzes data from the Economic Policy Institute, he finds significant increases in hours worked by those in the bottom fifth of the income scale during past periods of full employment — and increases for those in the middle fifth also.

This, of course, is another way that full employment boosts wages. It would surely make a big difference now, with more than 7.2 million part-timers who’d like full-time work, but can’t get it.

Needless to say, I hope, anything that boosted working families’ incomes would narrow the growing gap between the richest and the rest. We’d probably still have a high degree of income inequality, which ought to concern us forth both economic and political reasons.

But (back to Bernstein again) the growth of our economy, i.e., the value of all the goods and services produced, would be more equally shared.

And there’d be more growth because lower and middle-income families would spend more, without contributing to the sort of credit bubble that’s been held partly responsible for our Great Recession.

And for all these reasons, there’d more tax revenues that could be used to strengthen the safety net and/or work supports — the Earned Income Tax Credit, for example, and subsidized child care — for the smaller number of people who still couldn’t afford what Baker and Bernstein refer to as “a decent standard of living.”

Baker and Bernstein propose a number of ways to achieve full employment — some more controversial than others.

Most controversial perhaps is the fundamental premise. The federal government should actively intervene to restore full employment. And that will mean choosing to run deficits for awhile, rather than trying to squeeze as much as possible out of the non-defense part of the budget.

Hard to imagine in this political climate. But if enough people understood what they — and the country as a whole — would gain from a full employment economy, we might see the political will to pursue it.


What Could Cut the Poverty Rate Right Now

February 20, 2014

A nice, short video from the Half in Ten campaign tells us five things we can do to cut poverty today. They’re actually four things Congress can do — and one that it shouldn’t.

They’re all modest, middle-of-the-road proposals, reflecting both pending legislation and priorities identified in the President’s latest State of the Union address. That alone should tell you that they won’t have an easy time getting through Congress, though polls indicate bipartisan support from voters.

Here they are, with supporting details from the video and others I’ve added.

Create Jobs. What Half in Ten has in mind here are investments in renewable energy, other “growth sectors” and infrastructure projects, e.g., repairing our pot-holed roads and crumbling bridges, improving public transport.

We’re still 7.7 million jobs shy of the number needed to bring the unemployment rate down to its pre-recession level — 600,000 fewer than when the video was created, but still a daunting number. The recommended investments would help close the gap — as might the next thing, according to many economists.

Raise the Minimum Wage. In other words, Congress should pass the Fair Minimum Wage Act, which has been awaiting a vote for about a year and a half now.

As I’ve written before, the bill would raise the federal minimum wage to $10.10 an hour by 2016 and then link it to a commonly-used consumer price index so that it wouldn’t again lose purchasing power due to inflation.

The bill would also, over a longer period of time, raise the federal tip credit wage — now and since 1991 stuck at $2.13 an hour — to 70% of the regular minimum wage and then link it to preserve this ratio.

In the late 1960s, Half in Ten says, the minimum wage was enough to lift a family of three out of poverty. A full-time, year round job at the federal minimum wage now pays less than the federal poverty line for a two-person family.

Expand Access to High-Quality Pre-K and Childcare. This, as you probably know, is a high priority for the President and a broad spectrum of advocacy organizations. They’re focused especially on children in low-income families, more than half of whom start school at a disadvantage — and never catch up.

A bill reflecting the Obama administration’s proposal — the Strong Start for America’s Children Act — would make pre-K available for more low-income four-year-olds and, at the same time, establish quality standards. It also seeks to raise quality in programs for younger kids.

The Half in Ten video, however, focuses on the immediate pocketbook issue. Low-income families, it says, spend, on average, 40% of their income on childcare. More money for publicly-funded programs and/or subsidies to help pay the rates other programs charge would obviously leave more leftover for other needs.

Make the Workplace Family Friendly. Three priorities here. One is mandatory paid sick leave for the more than 40% of private-sector workers whose employers don’t see fit to grant it voluntarily. The percent in roughly double for low-wage workers, who can least afford to take unpaid leave.

A second priority is paid family leave so that workers can take time off for a broader range of compelling reasons, e.g., childbirth, a sick family member in need of care. Only 212% of workers have this benefit now.

And of the 59% who have an unpaid family leave guarantee under the federal Family and Medical Leave Act, about two million need, but can’t afford to take it, according to a recent survey.

A bill now pending in Congress would take care of both these issues — and without adding a penny to the federal debt, says one of the cosponsors.

The third priority is legislation to further strengthen the Equal Pay Act. Women still earn only 77 cents for every dollar men earn. Various reasons for this, but an estimated quarter to a third of the gap may reflect discrimination.

Don’t Make Poverty Worse. In other words, Congress is to refrain from further cuts to programs that provide cash or near-cash benefits to people in need.

Half in Ten flags SNAP (the food stamp program), which, as you know, was recently cut. It lifted nearly five million people above the poverty threshold in 2012, according to the Census Bureau’s Supplemental Poverty Measure.

Also flagged are unemployment insurance benefits, which lifted more than 2.4 million above the poverty threshold.

So Congress will surely make poverty worse if it doesn’t renew the recently-expired Emergency Unemployment Compensation program — or does, but trims it back again. The former seems more likely than the latter, unless Republicans rethink their position.

This is, in a way, a sad agenda because it’s largely based on pending legislation, which is largely based on what stands at least a remove chance of passing in this highly-divided, deficit-obsessed Congress. Sad also because chances seem pretty remote for much of it.

But one never can tell. So the thing we can do right now is to weigh in with our elected representatives on these five things — unless, of course, we’re disenfranchised District of Columbia residents. Sigh.


Year End Checkup for Shared Prosperity in DC

January 2, 2014

End of year seems a good time to look at how the District of Columbia is progressing — or not — toward becoming One City. So I turned to the indicators that the Half in Ten campaign published a couple of weeks ago.

We do see progress, especially if we look back to the first set, which, for the most part, shows where we were in 2010. But it’s a fragmentary picture — even more so if we focus only on the indicators Half in Ten could update, as I will here.

About the Indicators

Half in Ten chose the indicators in 2011, when it reset the clock for its original goal — cutting poverty in half in 10 years.

As I wrote at the time, they reflect a broader vision — not only less poverty, but more broadly-shared prosperity. For the latter, Half in Ten defined three priorities — creating good jobs, promoting family economic security and strengthening families and communities.

It picked 10 indicators for states and the District, presumably based in part on data it could directly access or secure from other organizations.

Even so, some of the data in latest set aren’t as current as one would wish. And the good job indicators are largely indicators of people who’d qualify for good jobs, rather than the extent to which such jobs are available.

The online report is still, so far as I know, the only single source of so many figures that allow us to measure progress toward social and economic justice.

The report also provides two bases for assessing each state-level figure — a best-to-worst numerical ranking and a better-or-worse figure, based on what Half in Ten calls the “U.S. average.” This is apparently another term for the nationwide rate.

I’m a bit queasy about comparing the District’s rates to the averages. (See note below.) But I’ll use the averages because they may provide a useful perspective. The rankings, as I’ve said before, are an apples-to-oranges comparison, so far as the District is concerned.

Poverty Reduction

As you may already know, the poverty rate in the District was 18.2% last year. This was about 3.1% higher than the U.S. average, according to Half in Ten.* But it was 2% lower than in 2010.

The child poverty rate shows more progress. It was 26.5% in 2012, as compared to 30.4% in 2010. But it was 5.5% higher than the U.S. average. And that, obviously, was alarmingly high too.

Access to Good Jobs

The unemployment rate in the District 8.9% last year — 0.8% higher than the U.S. average. The rate in 2010 was 9.9%.

How much of the dip indicates more residents working is an open question, since the rate doesn’t include jobless workers who’ve given up looking or potential workers who decided not to start. We know that they’ve been a major reason the national unemployment rate has dropped.

The disconnected youth rate, i.e., the percent of teens and young adults who were neither in school nor working, dropped from 17% in 2010 to 14% last year. This is 2% lower than the U.S. average, but the same as in 2011.

Economic Security

Health insurance coverage is one of the District’s strongest points. Only 9.14% of residents under 65 and below 138% of the federal poverty line (the cut-off for Medicaid eligibility under the Affordable Care Act) had no health insurance during 2012.

This is 8.6% lower than the U.S. average and 3.92% lower than the District’s own rate in 2011, the earliest year Half in Ten could report.

The District also does fairly well on food insecurity — at least in light of the poverty rate and the high costs of housing here. During 2010-12, 12% of D.C. households didn’t always have the resources to provide enough food for all members.

This is about 1.9% lower than the U.S. average and 1% lower than the District’s initial two-year rate.

On the other hand, only 17% of District residents who were jobless and looking for work in 2012 received unemployment benefits. This is nearly 11.7% lower than the U.S. average, though about 1.5% higher than in 2010.

It’s hard to know what accounts for such a low rate. One factor probably is that many laid-off workers in our thriving restaurant, hotel and home services sectors couldn’t meet the minimum earnings requirements for unemployment benefits.

Stronger Families and Communities

Just two updated indicators in this category — and neither altogether current. One is the teen birth rate, i.e., the number of births to women between the ages of 15 and 19 for every 1,000 in this age group. In 2011, it was 41.8 — about 10.4% more than the U.S. average. But it was 45.5 in 2010.

The other indicator is the number of children per 1,000 who were in foster care. In 2011, there were 16 — about 10.3% more than the U.S. average. But the rate was 20 per 1,000 only the year before.

These are not only indicators of family and community strength. The teen birth rate is linked to child and maternal health, to high school completion and thus to employment — and to poverty, though perhaps less as cause than effect.

Similarly, growing up in foster care has been linked to a host of later problems, including some flagged by the indicators here, e.g., poverty, disconnection from both school and work.

What’s true for these indicators is true for others as well. Each gives us a measure of individual and community well-being, but the measures are inter-connected in a variety of ways.

Which, I suppose, merely reaffirms the need for a holistic approach to both poverty reduction and a more equitable sharing of the prosperity in this very wealthy country.

* The source for the District’s poverty rate is the American Community Survey’s one-year estimate. However, the one-year estimate for the nation as a whole produces a smaller “worse than” difference than the Half in Ten figure I’ve replicated. By my calculations, the figure should be about 2.3%.


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