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The Year of the Low-Wage Worker

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Posted on Jan 3, 2014
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By Sonali Kolhatkar

If the state of the U.S. economy were measured by how the vast majority of Americans are faring, rather than by stock prices on Wall Street, this year’s much-touted economic recovery would be a bust. More than a million Americans who have been jobless for at least six months are set to lose unemployment benefits because Congress refused to extend them. When the congressional budget deal that excluded the benefits extension was reached in early December, President Barack Obama called it “a good first step,” and everyone celebrated because both major parties had finally agreed on something.

But this year, refusing to wait for lawmakers to take action on poverty, low-income Americans organized and rose up in numbers not seen in recent years. They demanded better working conditions and pay, and the right to form unions. Workers at Walmart and fast food outlets like McDonald’s had the most high-profile actions of the year. But numerous other movements have also emerged, such as teachers in North Carolina organizing a “walk-in” to protest education cutbacks, Amazon workers in Delaware filing a petition for a union, and transit union workers in California’s Bay Area striking for a better contract.

Perhaps the scattered labor actions are prompting Obama to speak out against income inequality, as he did on Dec. 4. Perhaps organized labor is finally influencing the president. Or perhaps it is simply a coincidence that he gave a major speech about the growing income gap between the rich and poor in the United States just a day before fast food workers in 100 cities around the nation went on strike demanding living wages in early December. Even if there is no coordination between unions and the White House, a national dialogue about wages and working conditions for the bottom 99 percent of Americans is certainly past due.

Obama chose to give his speech in Anacostia, one of the most poverty stricken neighborhoods in Washington, D.C., where predominantly African-American residents face an unemployment rate of 20 percent. In an interview after the speech, economist Max Fraad Wolff told me it was different from the president’s previous remarks about income inequality because Obama seemed to offer a “much more full throated endorsement of a significant increase in the minimum wage.”

In addition to spotlighting the embarrassingly low federal minimum wage, currently set at $7.25 an hour, the president’s wide-ranging speech also invoked the astronomical rate of CEO pay, the weakened state of unions, childhood poverty, the folly of trickle-down economics, and the importance of health care. Perhaps most importantly, he dared to bring up the issue of class, saying, “The opportunity gap in America is now as much about class as it is about race, and that gap is growing. ... We have to reject a politics that suggests any effort to address it in a meaningful way somehow pits the interests of a deserving middle class against those of an undeserving poor in search of handouts.”

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Wolff agreed with Obama, saying, “It’s long been true that in a country that won’t talk about class inequality, there becomes a conflation between class and race and if we’re going to be completely honest here, the Republican Party has fairly artfully used that to make it about ‘those other people’ taking government services and handouts, trying to dodge taxes. And what that’s produced over the last 30 years is a lower middle-income white population that’s literally often excitedly voting for its own destruction and the notion that what they’re doing is preventing the undeserving poor—who, in their imaginations, are often people of color—from getting undeserved services. And this has left the higher-income echelons of the U.S. to more or less walk away with the whole pie.”

While Obama called income inequality the “defining challenge of our time” and something that “drives everything I do in this office,” his words ring hollow. This is a president who has failed to rein in the recklessness of Wall Street, remove corporate loopholes, adequately deal with growing student loan debt or bring justice to those who lost their homes in the mortgage crisis.

As Wolff warns, “It looks to me that there’s going to be an unfortunately large gap here between rhetoric and the legislative policy proposals.” In spite of political lethargy in Washington, D.C., there has been some success at the local and state level to boost the minimum wage. The city of SeaTac in Washington state raised its minimum wage to $15 an hour in a recent election. California’s legislature passed a bill increasing the state’s to $9 an hour, while New Jersey raised its by $1 to $8.25.

It is one thing to lift the boats of low-wage earners, but what about the fact that America’s rich are continuing to reap obscene benefits? Wolff continued his criticism of Obama, saying, “We haven’t even really seen an aggressive attempt [by the president] to halt upward redistribution. If we want better distribution of income ... we need to first stop actively redistributing wealth upward.”

The idea that anyone can attain astronomical wealth is a delusion that is deeply ingrained in American culture. So while taxing the rich to halt upward redistribution of wealth may now be more popular than ever, a third of the population still opposes it.


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