The Politics of Poverty

Ideas and analysis from Oxfam America's policy experts

Is the economic engine putting people back to work also condemning them to poverty?

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Home care aide Malrissa Perkins feeds Alan B. Smith, 81, in Lincoln, Massachusetts on June 13, 2013. The number of personal care aides will increase 70% between 2010 and 2020, making it the fastest-growing job in the country, according to the US Department of Labor. Scott Eells / Bloomberg via Getty Images

Raising the minimum wage is the fundamental first step toward rewarding hard work and restoring the ladder to economic mobility.

Mary Babic is the Communications Officer of Oxfam America’s United States Regional Office.

Yes, President Obama was right in his State of the Union speech on Tuesday night in celebrating the signs of recovery from the 2008 recession. “Our economy is growing and creating jobs at the fastest pace since 1999. Our unemployment rate is now lower than it was before the financial crisis.”

No matter your political leanings, it’s hard to disagree: Jobs are good.

Jobs fuel the engine of growth. Jobs put money in workers’ pockets to pay for food, housing, transportation. Jobs give people a sense of productivity, community, engagement. Jobs reward hard work and give people a means to invest in moving forward: paying for education, buying a home, saving for retirement.

Unless, of course, the jobs are not good. And there, unfortunately, is the rub for this particular economic recovery.

The jobs created over the past seven years are, largely, not so good. In fact they are the kinds of jobs that hurt and exploit the workers doing them. Indeed, we’ve seen the strongest growth in low-wage, service-providing industries (e.g., retail, restaurants, and temporary help) and industries less affected by recessions (e.g., health and education). Many of these jobs just simply don’t provide what workers need.

The new job market offers a number of challenges to workers, among them: unreliable part-time schedules that keep workers from knowing when and how long they will work in a given week; and lack of essential benefits, such as paid leave for illness, vacation, emergencies, not to mention employer-provided health insurance and pension plans.

The most salient aspect of the new not-so-good jobs however? The low pay. This, ironically, is what led President Obama also to say: “Will we accept an economy where only a few of us do spectacularly well? Or will we commit ourselves to an economy that generates rising incomes and chances for everyone who makes the effort?

The very economic engine that is putting people back to work is also condemning them to poverty.

While the economy was growing and the wealthiest were reaping the reward, the National Employment Law Project reports that real median hourly wages declined by 3.4 percent from 2009 to 2013. Lower- and mid-wage occupations experienced greater declines in their real wages than did higher-wage occupations. Job growth over 2014 (and in the recovery overall) has been unbalanced, with especially pronounced gains at the bottom and slow growth in mid-wage industries. “Today, there are approximately 1.2 million fewer jobs in mid- and higher-wage industries than there were prior to the recession, while there are 2.3 million more jobs in lower-wage industries,” the President told Congress.

NELP low wage recoveryWhen President Obama asked, “What does middle-class economics require in our time?”, he was putting a spotlight on a sad, new reality. Tens of millions of Americans are working hard at full-time jobs, and are stalled in poverty. They are not “middle-class” by most definitions of the term. They are the millions of “working poor” or, simply, a working underclass yearning for a middle class income and lifestyle.

Last year, Oxfam America found that people work for low wages in every corner of the country. More than 25 million American low-wage workers would benefit from an increase in the minimum wage to $10.10. The 60 million people living in those households – including 15 million children – all depend on wages so low they are barely getting by.

What’s more, we found that OVER HALF of the people relying on food banks around the country come from working households. Even folks who work hard can’t afford to put food on the table. (Our survey from 2013 gives the numbers and tells the tough stories of workers struggling to pay the bills and falling deeper in debt every day.)

This stark reality flies in the face of economic recovery talk, at the same time that the richest folks have garnered extraordinary rewards. The Wall Street Journal notes,

Average, or mean, pretax income for the wealthiest 10% of U.S. families rose 10% in 2013 from 2010, but families in the bottom 40% saw their average inflation-adjusted income decline over that period, according to the Fed’s Survey of Consumer Finances, which is conducted every three years.”

Some sources report that up to 90 percent of Americans have seen their income stagnate or decline since 2008.

Finally, the President noted on Tuesday, “To everyone in this Congress who still refuses to raise the minimum wage, I say this: If you truly believe you could work full-time and support a family on less than $15,000 a year, try it. If not, vote to give millions of the hardest-working people in America a raise.”

We urge President Obama (and you!) to take action and say it loud enough for Congress to hear – those willing to work hard should have jobs that match their integrity and effort. This means jobs that enable all ordinary US citizens to support their families and aspire towards a better life.

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