Income Inequality, the Gutting of the Middle and Working Classes, and What We Have to Do Next

 

The evisceration of the union-based job security of the United States Postal Service is the quintessential example of an ongoing social experiment: how much of the middle class chunk of the prosperity pie will the American people allow to be shaved off and redistributed upward? Long time readers and twitter followers know that I often call for the repeal of the Postal Accountability and Enhancement Act of 2006. It required the pre-funding of retiree benefits for postal workers who hadn’t even been born yet (which is not required of any other federal agency and without which, the USPS would show a profit every single year) and was designed to bankrupt the Post Office and hand all the Post Office’s business over to UPS and FedEx. USPS jobs are (were) well-paying middle class jobs that never required a college degree; and that is the point. People at the very top of the American wealth pyramid who want our society to transform into a caste system don’t like the idea of people without a college degree earning $50,000 (mail carriers working overtime) or $70,000 (USPS middle management) a year. And other people in the system who are not rich and have seen their jobs shipped to Mexico, India or elsewhere and/or have seen their wages stagnate or decrease over the past 35 years are now working low-level management jobs at $35,000 a year, putting in 60 hours a week and know: this is it. There’s not enough money, not enough time, and I am not going to get ahead. Young people are being offered $11/hour “assistant manager” jobs at 30 hours a week in the same tone one might offer a lottery winnings check and no one is telling them that there was no such thing as an hourly management job that wasn’t full time 20 years ago. It would have been a full time salaried position with benefits — stellar benefits.

 

We could call it a conspiracy. Except it’s being done right out in the open.

 

Now, instead of asking, why is our middle class and our working-class shrinking? And then realizing that both are being deliberately, slowly but surely, eroded through a systematic process of 1) outsourcing, 2) insourcing via H-1B visas that allow our jobs to be taken by people from other countries by moving the people to the job instead of moving the job to the people, 3) turning full time jobs into part time jobs, and 4) turning salaried positions into hourly, we are instead operating in a bubble — the isolation of our own socioeconomic class — and that is what prevents us from seeing that almost everyone else is experiencing a similar or worse situation. But the glue that holds this master plan together? Media reports and corporate mouthpieces that promote a false narrative designed to make the masses feel that someone else is being overpaid. Overpaid because they’re in a union. Overpaid because of affirmative action. Overpaid because they don’t have a degree. Overpaid because they do have a degree but don’t have experience. Overpaid because they work for the government. But it’s happening to everyone. Everyone’s income is declining (except the 1%’s; 95% of all income gains since 2009 went to them — the other 99% saw a net decrease). We just don’t realize it because the strategy — divide & conquer, in order to pit us all against each other — is working.

 

 

 

Think $15/hour is high for a minimum wage? Consider this. It costs what it costs to live. And when people don’t make enough to live (pay for food, shelter and health care), society picks up the difference and its (our) tax dollars subsidize what the poor can’t afford to pay for with their wages.

 

Supporters of the $15/hour minimum wage, you have probably heard the latest complaint, “$15 an hour is really high for an entry level job.” How to respond? “There’s no such thing as an entry level job. The phrase is entry level position. It referred to a now rare opportunity to begin a career in a salaried position with the understanding that one would continue to work one’s way up a corporate ladder, through hard work and promotions, from there. A job is wage based labor. Entry level positions were careers that began with a salaried position of at least $40,000 a year in today’s money, with benefits. At $15/hour, even if a person got scheduled for a full 40 hours a week, 2080 hours per year, today, they would make at most $31,200, and of course wouldn’t, because they would now go into an income tax-paying tax bracket. Even after taxes, that is still enough to disqualify them for food stamps, subsidized housing and subsidized health care. They will not actually have any more disposable income than they do now. They will simply have to spend that additional $15,000 per year on health insurance, rent and food instead of our tax dollars picking up the difference through social welfare programs.”

 

Know why Walmart especially hates the $15/hour movement? Because the way it works now, they get to double dip: pay their employees wages so low that they employees HAVE to go on SNAP, then those same workers use the SNAP to buy food at Walmart! That’s the whole reason the Waltons entered the grocery market by creating Super Walmarts in the first place. And it’s actually even more brilliantly horrific than that: Walmart does whatever it takes to keep their workers part time, in other words, working 20 hours a week at the most to avoid having to offer any kind of benefits whatsoever (especially health insurance). So if one worker works 20 hours a week at $7.25/hour, that’s about $7,540 per year or about $628/month. Now, let’s say this worker is a married woman, and has two children. She could — and probably does — receive the maximum SNAP benefit for a household of 4: $649 (the difference is $138 less if she isn’t married and has 2 kids). She’s going to spend every dime of that at Walmart. Now, Walmart has actually paid her more than $628 per month. They’ve paid approximately $39 on top of that $628 into Social Security, so they’ve paid about $667 to have her work in their store. But they recouped $649 of it from her SNAP. Now, I can’t say what Walmart paid to stock that food — the profit margin on eggs, sugar, and milk is very low, so for the sake of argument, let’s round up and pretend that $649 worth of food actually cost Walmart 60% of the retail price (it didn’t, but let’s make this example as horrifying as we can within the context of knowing that the truth is probably even more horrifying), about $390. The $649 (SNAP amount) – 390 (W’s cost) = $259. So ok, they really only recouped $259. So $667 they paid to have her work part time that month minus the $259 they recouped through SNAP (keeping in mind it was probably more — a lot more) is $408. $408 x 12 months = $4,896. At 20 hours a week, that’s 1040 hours in a year. $4,896 for the year divided by about 1040 hours and they paid her a whopping $4.71 an hour. That’s how much it cost them (and we are rounding UP, way up) to have a woman — systemically impoverished because many many people benefit from the perpetuation of poverty — work in their store. Oh, and you, person who makes $50k/year at your crap job that keeps raising your health insurance premium and as of January 1, raised your deductible to something so high you’re actually praying to God daily that no one in your family gets sick, you paid for her food — and her family’s food. You paid for her health care. Not her health insurance, her health care. Impoverished Walmart worker has no health insurance premium because medicaid doesn’t work that way. The tax dollars just go straight to the provider with no mark up for an insurance company middle man. And Walmart got away with paying slave wages. Because we are being divided and conquered and don’t want someone who stands on her feet all day, carrying and lifting objects to restock shelves and perform other physical labor, to make enough to buy her own food, pay her own rent and afford her own health care.

 

And that, my friends, is the sordid scent of Walmart’s victory.

 

 

This is what it will take to turn things around: demanding a living wage for the poor. This WILL force all employers to increase their wages through upward pressure. The way to demand it is through reminding our elected officials that they work for us and that if they do not do what we want — in this case, increase the federal minimum wage to $15/hour — then we will vote for their opponent on election day. Sign every petition that crosses your path. Vote. Vote again. Call your Congressperson. When you hear your family and friends say things like, “that’s a lot of money for a teenager,” remind them that that teenager should be the very lowest on the totem pole of workers and that a living wage will force employers to show preference to workers who are not in high school when hiring, and pay them more than $15/hour. Ask them, when was the last time $31k/year was enough for a person with kids anyway? $15 an hour for a high school student who’s going to work for a maximum of three months a year at more than 20 hours a week (and is poor themselves if they’re working that much, and is probably doing it to save for college) will at the *worst* provide more of an incentive for employers to hire adults. Everyone benefits when everyone has enough money to live and spend and buy cars and houses and save. Yeah, savings accounts!

 

Bottom line: you can make a difference in people’s understanding of what’s happening with income inequality with just a few talking points. Especially in the mind of your congressperson.