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Marie Cocco: The Pretense About Jobs

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Posted on Sep 5, 2006

By Marie Cocco

When it pays better to be old and retired than young and working, we can no longer indulge Bush’s fantasy that the economy is on the right track.

WASHINGTON—The problem isn’t Wal-Mart. Well, let’s just say it can’t only be Wal-Mart.

Not when the Census Bureau reports that Americans are essentially better off old and retired than young and working. Not when even the wages of college-educated workers—the cream of the labor market crop—are stagnant or falling, right along with the pay of those who work in the nation’s great factories or greet you in a big-box store as you enter in search of cheap sneakers.

Those who worked full-time, year-round last year saw their earnings, after inflation, fall—again. The White House trumpeted a different number from the latest census numbers. It boasted of a 1.1% overall increase in median household income.

Here is what the president and his political minions left unsaid: Almost all of that gain went to households headed by people 65 and older.

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What does it mean to have an economy in which it pays more to retire than it does to work?

Economists are still puzzling over the gain in the incomes of the elderly, with an early consensus that it may well be a demographic glitch. As the oldest of the elderly, who tend to have the lowest incomes, die, the proportion of “young’’ elderly rises. These new retirees are more likely to work to supplement their Social Security benefits, and to have more income from savings.

For just about everyone else, the new numbers on the economy are another reminder that people who “work hard and play by the rules,” as Bill Clinton used to say, just can’t win. That’s true even for those who were supposed to score big in the so-called “new economy,” workers with a college degree.

A piece of parchment turns out to offer little protection against the gale-force winds of globalization and the padding of corporate profits at the expense of workers’ wages. The wages of college-educated workers rose by 0.3% between 2000 and 2005, according to “The State of Working America,’’ the annual compendium of data on employment released each Labor Day by the Economic Policy Institute. That’s the same wage growth earned by those with just a high school diploma or less.

For new graduates, the fruits of work were more meager still. Wages for college-educated men in entry-level jobs fell by 3.9% over the same period. For entry-level women with college degrees, wages fell 1.9%.

“We see people graduating with skills ... not able to get a wage that was higher in 2005 than it was for their older brothers or sisters who graduated in the late 1990s,” says Lawrence Mishel, an author of the report and president of the liberal-leaning institute.

For a generation, blue-collar workers have suffered while their economic lifelines were shredded. First manufacturing jobs and the unions that helped make their workers middle-class disappeared, then wages dropped and corporate managers came to see benefits not as a reward for loyal work but as a cost to be cut. All through this, the country was told that a college degree or other high-level skills training would allow a worker to escape the degrading spiral down, and provide a lift up.

Now the security of a white collar is unraveling, too. Pension coverage for college-educated workers dropped to 60.7% in 2004. It had been rising steadily throughout the 1990s. The health-insurance crunch has hurt, as well. The percentage of college-educated workers with job-based insurance has sunk to 68.5%—down from nearly 80% in 1979.

No wonder that the nonpartisan Pew Research Center, summarizing the results of its Labor Day poll, put it this way: “Americans believe that workers in this country are worse off now than a generation ago—toiling longer and harder for less in wages and benefits, for employers who aren’t as loyal as they once were, in jobs that aren’t as secure, and in a global economy that might well send their work overseas.’‘

It is time to stop pretending.

Stop pretending that workers are to blame because they didn’t go to school. Colleges and universities churn out millions of graduates—the kids have the loan payments to prove it. What they don’t have is the paycheck needed to make them every month.

It is time to stop pretending that national policies of neglect—benign or malevolent—are somehow going to lead the economy to correct itself. It hasn’t yet, and it’s gone far, far off-course.
   
Marie Cocco’s e-mail address is mariecocco(at symbol)washpost.com.


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By Ray Tapajna, October 21, 2006 at 5:56 pm Link to this comment
(Unregistered commenter)

Please pass on Tapart News and Art that Talks about workers dignity, Free Trade, Globalization and the value of work competing with the value of products at http://tapsearch.com/tapartnews/ It makes no sense if the value of products are cheaper if the value of work is lowered under the value of products on a regular basis. We worked at several factory jobs while going to college. The jobs paid an equivalent of $15 to $20 an hour. If these jobs were available today, there would be thousands standing in line trying to get them.
The post office in seeking price hikes tells us that the price matches the cost of everything else over the years. In most cases the price does match up with the cost of goods and services except for one item the post office never mentions. They never compare wages and income with the past.
Explore the lost worlds in the Flat World of Globalist Free Traders led by Thomas Friedman at http://tapsearch.com/flatworld
Thomas Friedman uses statistics that do not match up with the past. In the 1970s. the public would laugh if a person making only a $100 a month was considered employed and they would have been very upset if only 38% of all workers qualified for unemployment insurance. There would have been a Congressional investigation back then about it.

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By Broiler, September 6, 2006 at 5:47 pm Link to this comment
(Unregistered commenter)

My spouse and I have been working multiple jobs
since the Clinton administration. The more things
change the more they stay the same.

It’s always “the economy stupid” for us.

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By Margaret Currey, September 6, 2006 at 1:52 pm Link to this comment
(Unregistered commenter)

The people will rise up when they can not longer afford to buy rice or beans or cheap food that substains the poor, because people will become poor, especially if the greedy corporations look to giving the shareholder or stockholder more than the employees.  The shareholder or stockholder probably does not really have to work for a living, they might be living on an inherritance.

That’s all follks

M Currey, Vancouver Washington

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By GW=MCHammered, September 6, 2006 at 1:45 pm Link to this comment
(Unregistered commenter)

Thank you, Jeebus! I take back everything I said (uh-huh). Now hold on to your swollen wallets ‘cause, this just in:

“Wednesday September 6, 3:38 PM EDT
By Burton Frierson

NEW YORK (Reuters) - U.S. labor costs have risen more robustly this year than first thought, a government report showed on Wednesday, increasing concerns the Federal Reserve may start raising interest rates again to contain inflation.
......
The Labor Department’s report contained revisions to first-quarter data showing hourly worker compensation shot up by 13.7 percent, well ahead of the previously reported 6.9 percent gain.

In the second quarter, compensation rose at a more subdued, but still strong, 6.6 percent pace.”

http://money.excite.com/ht/nw/bus/20060906/hle_bus-n06439628.html

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By Harold Steele, September 6, 2006 at 10:00 am Link to this comment
(Unregistered commenter)

Things won’t change in this Country until the average rank-and-file American gets fed up, and by that I mean REALLY fed the hell up.

In the past 5 years since 9/11, we have gone from being a fearless society to a fearful one. Everything around us is steadily eroding: wages, personal freedoms, you-name-it and it’s on its way down. Unless, oc, you are wealthy, then you have a “Patron Saint” in the Oval Office who is busy looking out for you and yours 24-7-365. Believe it.

Seems to me that if people are truly overjoyed with things as they stand in America right this very minute, then their choices at the Polls this Fall are a forgone conclusion.

If, otoh, people are finally fed up to their eyeteeth with “business as usual,” then their choices at the Polls this Fall are also a foregone conclusion.

And the above observations go -double- for ‘08, as well….

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By GW=MCHammered, September 6, 2006 at 9:02 am Link to this comment
(Unregistered commenter)

If Congress followed historical precedence, federal minimum wage already would be $15 per hour:

According to the U.S. Department of Labor, changes in the federal minimum wage over the thirty years from 1938 to 1968 increased by a factor of 6.4. Meaning the 1976 minimum wage of $2.30 should be $14.72 today. Even during the forty years from 1938 to 1978 the federal minimum wage climbed by a factor of 10.6 from 25-cents to $2.65. Meaning the late 1966 wage of $1.40, later this year should pay $14.84 per hour. And this does not account for the vast increase in per-worker productivity or periods of high inflation since. For decades we were able to pay workers well. So what happened?

“It’s not what you pay, it’s how affordable it is.”

Sound familiar? Capitalists (those with money) want workers (now without money) paying too much for everything then borrow and pay interest to them … pittance wages masked by easy credit … loaning us our wages instead of paying us our due … for life. Home, gasoline and many car prices grew over 6% annually since the mid 70s. This again suggests that the federal minimum wage, just to keep up with rising living expenses, should have grown from $2 per hour then to over $14 per hour today. Ironically, $14 per hour nearly equals the raise Congress gave themselves over just the past decade. And that’s if they worked forty hours per week fifty-two weeks of the year.

So while real prices and productivity have skyrocketed, effective wages and benefits have tanked, mostly masked by extensive financing. Real minimum wage growth has been just 3 percent annually since 1974, meaning today, all things being equal, the equivalent price of:

gasoline should be around $1.17, not $3 per gallon,
a shiny foreign sports car should sticker for about $12,000, not almost $30,000,
a new home in the Pacific NW should close under $80,000, not over $200,000,
even the 1974, 8-cent postage stamp should cost only 22-cents, not 39.

They’ve misspent Social Security and now they’re looting pensions too. Is this really the burdensome tomorrow we want to leave future working Americans?

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By DM, September 6, 2006 at 8:34 am Link to this comment
(Unregistered commenter)

Part of the cause is the great promise of globalization that all countries will be better off with free trade.  The problem lies in the definition. “Free trade” is an economic principle which politicians use to tell us we are better off shifting our manufacturing base to lower wage countries.  However, this is only theoretically true when the trade is “free” and all the checks and balances are in place.  We are not currently participating in free trade, merely trade.  The following are just a few examples of policies that prevent free trade.  If currencies are not allowed to move freely between trading partners then we do not have free trade. (China)When a country has a trade deficit relative to another country its currency should drop making its goods relatively cheaper. The end result should be a trade balance.  China continues to peg its currency to the US dollar and while this continues the trade imbalance will continue. If countries sell us products, but have barriers to our products entering their country we do not have free trade (China, Japan, etc) Furthermore, when countries use different standards for ethical treatment of their workers we do not have free trade.  The original economic theory assumed all workers are treated equally in their respective country. Another example is that foreign goods such a food (and other products) is not produced to US standards, yet is imported.  Pesticides, for example, not allowed for health and environmental reasons in the US are being used in other countries giving their producers a cost advantage.  This trade, which is far from free, is a large factor in our stagnant wages.  I can’t imagine how this will work itself out over the next 20 years if it continues unchecked.

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By Jim Freeley (Local 300 NPMHU) Retired, September 6, 2006 at 8:20 am Link to this comment
(Unregistered commenter)

Great column! I am retired and would agree with the premise above that younger retirees (70)may be doing slightly better. Depression babies quite naturally were savers, and going to work right after WW2 we were much more likely to be employed in an industry that was unionized. Hence Social Security plus defined benefit pension plus savings enable us to worry less about the future, than those stuck in today’s workplace.
I do have a different view of education than many others. Education should not be viewed as vocational training but as a basic necessity of life, and therefore should be pursued for its own reward.
Eddie Mcknight is right on target with his remark about not seeing this kind of analysis.

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By Eddie McKnight, September 6, 2006 at 7:05 am Link to this comment
(Unregistered commenter)

Why don’t we get this kind of reporting on the evening television news?  Instead, we get some pre-packed, glossy story that has been sold to the networks for the purposes of selling the spin.

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By Dr Ozong, September 6, 2006 at 6:01 am Link to this comment
(Unregistered commenter)

Nothing is more perplexing to me than the lack of outrage on the part of American workers. We have taken hit after hit at the hands of government policy that shamelessly favors corporate and business interests, with nary a whimper of protest. Due largely to technological advances, we have increased productivity exponentially, and continue to do so, even though most of us do not benefit from the gain. We work more, with our Blackberries and cell phones and laptops, but have less time with our families, less time for our communities, less time for what is important in a human life. We have allowed ourselves to be transformed into beasts of burden.

The biggest lie we are fed is that Education is the answer. It’s not and can’t be when the game is rigged the other way. This country is off-track, out of control, on a collision course with widespread pain, and the people we elect could care less because they know the masters they serve.

What was it Michael Moore said, “Dude, where’s my country?” I’m wondering.

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By Bibliophile, September 6, 2006 at 5:20 am Link to this comment
(Unregistered commenter)

I have graduated from college with a communications degree.  There are no decent jobs for entry-level workers, unless you can afford to work for free or at fast-food wages.  We are competing for what used to be entry-level college degree jobs with people who have been in the workforce for a decade, because they can’t find jobs at their skill level, either.  I am working as a secretary making less money than before I sold my house and used the proceeds to return to college.  We did the math - it should have been enough.  But republican education budget cuts forced my college to raise tuition by double digits and increased “fees” like parking and required medical insurance every semster.  Now I have $30,000 in student loan debt, when I should have had none.  Less income - staggering new debt - lost years of my life when I could at least have been earning money - higher prices for everything = bad investment.  Maybe all those boys who aren’t going to college anymore are right.  Maybe the numbers just don’t add up anymore.

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By Youffraita, September 5, 2006 at 7:56 pm Link to this comment
(Unregistered commenter)

My father, who died about two months ago at the age of 87, brought in more between his pension and social security than my take-home has ever been—and yeah, I have that college degree.  He didn’t.

Am I angry?  Well….maybe just a little.  The GOP has done everything in their power to disenfranchise the middle class, and what I don’t get is why the rest of the (non-Dem) middle class would ever vote for the scumbags who want to give OUR increases in productivity to the Management that doesn’t give us raises, benefits, or much of anything else.  In fact, as their companies are folding, CEOs get huge golden parachutes.

OMG, even Ben Stein (a Republican) has written columns for the Sunday NYTimes on why the rich should pay their fair share of taxes.

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