Wednesday, May 8, 2013

Who is profiting from government-payed, low-income jobs?

An article in yesterday's Washington Post addressed the role of the federal government in subsidizing low-wage, private employment:

Jim Tankersley and Marjorie Censer (May 7, 2013) Study: U.S. taxpayers employ more low-wage workers than Wal-Mart, McDonald’s combined. The Washington Post,

[Excerpted] Federal taxpayers employ more low-wage workers than Wal-Mart and McDonald’s combined, a new study calculates. The report from a public policy organization Demos, set to be released Wednesday, estimates that taxpayer dollars fund nearly 2 million private-sector jobs that pay $24,000 a year — about $12 an hour — or less. 

Those workers owe their incomes to government contracts, Medicare and Medicaid spending, and federal infrastructure funds, among other public sources. In contrast, Demos estimates that about 1.4 million workers earn that amount or less at Wal-Mart and McDonald’s, which are two of the largest employers of low-wage workers....[end]

Majia here: The question I want to ask is, who is profiting from those low wage jobs? The answer is, highly centralized (in terms of ownership) private interests.

The collapse of middle-class jobs is not accidental. It is driven by greed and outsourcing, among other factors, by a relatively narrow group of powerful. See this discussion here of the de-skilling of middle-class work.

Yesterday, I stopped at BedMart to buy a pillow. I spoke to the sole salesperson there and learned he essentially holds down the store and makes minimum wage doing it. He makes commission and so works very long hours. Spending on beds is down in a context when people are even cutting health care spending. I wonder whether his actual hourly earnings meet minimum wage standards. What a profitable model for the mulch-millionare owner of Bedmart.

Exploitation of labor is a growing problem as our regulatory apparatuses are weakened domestically, but demand exists for low-wage jobs because of overall job scarcity.

It's not a free market for workers, nor has it ever been.

Workers in developed economies have lost power as financialization, automation, and globalization makes their labor and consumption increasingly irrelevant to transnational private interests.

Globalization allows companies to race to the bottom in labor compensation and work conditions, as we have learned recently with the death of over 450 garment workers in Bangladesh due to the structural collapse of a building unsuited for the weight and pressures of manufacturing equipment. 450 Bangladeshis died because of greed and corruption.

Demand itself collapses as labor's share of the pie shrinks. However, collapsing consumer demand in developed economies simply prompts global expansion of marketing and sales.

The entire system is predicated on extraction of wealth and resources, regardless of social and environmental costs 

Why would we allow our government to subsidize low-wage work that profits a few private interests?

Why do we allow and subsidize through our public spending a system that is not sustainable environmentally, economically, and socially?


Inequality: You Don't Know the Half of It by Nicholas Shaxson, John Christensen, and and Nick Mathiason





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