Several days ago, the Labor Department released its most recent figures -- 192,000 new jobs were created in March. That's good news, right? Not necessarily. It's not just the quantity of jobs but the quality that matters, and the quality isn't there.
The Bureau of Labor Statistics recently released its own set of data, identifying the fastest growing and largest employment sectors this week. Its findings were sobering but unfortunately not unexpected. As of May 2013, the most recent date for which data is available, the lion's share of jobs are increasingly in low-wage industries such as food service (including fast food, food preparation and waiting tables), office administration, retail, and customer service. With the exception of nursing, average wages for the 10 most common occupations ranged from $18,800 to $34,000. In light of this new data, it's clear that we're overlooking an important angle. If our economy is in recovery, with new jobs being created and profits on the rise, why are wages declining? And how are these low-wage workers making ends meet?
If we look at the numbers, we can see that the answer is simple: They aren't. Heartland Alliance, the Midwest's leading anti-poverty organization, where I work, is based in Illinois, where the average yearly wage for a cashier is $21,250, or $10.22 an hour. This simply isn't a wage you can live off of and as these jobs have multiplied, so has the number of families relying on government programs such as food stamps to make ends meet. Today, one in seven Americans utilize this program -- in 2007 there were less than half as many.
With monthly benefits averaging $130 per person, these low-income workers must spend their food stamp dollars in the most economical possible manner or go hungry. Often, they end up shopping at local discount stores -- which rely largely on low-wage labor -- perpetuating the cycle. These families work hard but can't get by, they rely on benefits to close the gap but have no choice but to patronize the businesses that keep wages low in the first place. That's a cycle that's bad for families, bad for communities and bad for the economy.
We don't have to accept this as a give -- or pick between profitable businesses and well-paid workers. Costco is a great example of this -- it pays its employees an average of just over $20 per hour with pensions and health insurance available and its profits have grown 15 percent annually since 2009. By paying workers well, we also create a cycle -- one we want to encourage. Well-paid workers spend their increased income in their communities, helping to lift their families out of poverty and create thriving local businesses. As communities grow, they become more attractive to businesses looking to invest, bringing new job opportunities and furthering the cycle of growth, which can minimize ties to government programs and help balance our nation's budget. It's a cycle that leads to stability, rather than stagnation and poverty.
In America, short-sighted policy decisions are an issue we're faced with on a consistent basis. Poverty doesn't exist in a bubble; those who receive government benefits increasingly live in a household in which someone works full-time year-round. The problem isn't that there are too few jobs -- it's that there are too few jobs that pay a living wage. Let's take the long view on this. A higher minimum wage would reward work and decrease the need for government benefits and it needn't strip businesses of a healthy profit margin. It's time to decide where our priorities are and make the investment our workers deserve.
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