Though the unemployment rate has decreased in over 40 states since the recession, a recent article in the Institute For Policy finds that the amount of Wall Street bonuses handed out to employees last year would be enough to double wages for all Americans working full-time at the federal minimum wage rate.
Currently, the federal minimum wage rests at $7.25 per hour, and while there are efforts to increase the minimum wage, political economist, Robert Reich, sheds some light on why wages are so low for the average worker today. His most recent blog post titled, “The Paid-What-You’re-Worth Myth,” compares the wages of workers at two of the largest companies in America, past and present.
“Fifty years ago, when General Motors was the largest employer in America, the typical GM worker got paid $35 an hour in today’s dollars,” Reich wrote. “Today, America’s largest employer is Walmart, and the typical Walmart worker earns $8.80 an hour.”
He continues on to say that the GM employee was not so different from the current Wal-mart worker. They didn’t have a better education, and were not more productive. However, he does point out one key difference, unions. GM employees were backed by unions, which allowed for autoworkers to earn a decent, livable wage. Since a large portion of Americans were part of a labor union, this also allowed for non-unionized employees to have better pay and benefits as well – something that is not currently happening with non-unionized workers like Wal-mart employees.
“The more bargaining power workers have, the more equitable the economy becomes,” said Director of Communications for California Labor Federation, Steve Smith. “…We were at a peak in terms of union density at that time, meaning that workers had the ability to bargain with their employers over wages, benefits and working conditions.”
A report by the National Employment Law Project finds ten ways to help rebuild the middle class and U.S. economy, of which include: the right and freedom to join a union, increasing the minimum wage, as well as saving good public and private jobs.
According to the NELP report, only 12 percent of workers belonged to a union in 2011. That number shrinks to 7 percent for private employees. The report also finds that from 2003 to 2007 unions increased wages by 12 percent for all workers and 21 percent for low-wage workers, a number that could increase if we had more workers protected by labor unions.
“The other thing that we look at right now is this trend from full-time permanent positions to temporary positions,” said Smith. Those temporary positions often have lower wages, no job security attached to them, and few if any benefits for health care or retirement. We’ve seen more corporations moving toward temporary employment as opposed to permanent employment.”
Low-wage jobs have increased three times faster than mid- and higher-wage jobs, stated the NELP report. Moreover, eight out of ten jobs that are predicted to grow the most do not require a college education, leaving more room for growth in lower-paid jobs.
“If we’re going to create an equitable economy again,” said Smith, “it can’t be done without a stronger labor movement, and more workers having the ability to bargain with employers.”