This is a continuation of my book review of Barbara Ehrenreich’s Nickel & Dimed. Part 1 posted yesterday.
Housing costs post the greatest obstacle for low-wage workers. Why does our society seem to resist rectifying this situation? Do you believe that there are realistic solutions to the lack of affordable housing?
In Nickel & Dimed, Ehrenreich’s first job (near Key West, Florida) as a food server does not pay enough for her to even get a modest apartment. She eventually upgrades to a better paying food service job, and is able to rent a half-size trailer so narrow you can touch both walls while standing in the middle, but only after having a $600 deposit. Most of the people she worked with, living paycheck to paycheck in a hotel room somewhere, do not have even that much starting capital, even though it would ultimately be cheaper in the long run for them to live in an apartment or trailer.
An easy way to rectify the issue of housing is to do away with the security deposit. Just increase the first year’s rent slightly to spread it out across all months – if tenant’s stay longer, they get a slight rent reduction. Require the first month’s rent up front, of course. Although I have had to deal with it myself, I had never really thought about the barrier that is created by the security deposit. Ehrenreich had $1000 in cash when she began each of her jobs (that was part of the experiment), but notes in retrospect that most of the people she met along the way probably would not have even had that. The gap between staying in a hotel room and paying a month’s rent is substantial – in Florida, where she eventually secured a small trailer rental for $550 /month (+$550 deposit) here were the living conditions of two of her coworkers:
- Gail: “flophouse” apartment – $250 / week ($1000 / month, a $450 difference)
- Tina + friend: Days Inn – $60 / night ($1800 / month on average, a whopping $1330 difference)
In either case, these people clearly make enough to pay any sum in between the rent for an efficiency ($500 / month, in that part of Florida) or a one-person trailer ($480 – $550, also in that part) all the way up to a full month’s rent at a hotel (~$1000 / month). Charging a slight premium ($100-150 / month) in lieu of a security deposit should lower that threshold substantially.
Ehrenreich experienced remarkable goodwill, generosity, and solidarity among her colleagues. Does this surprise you? How do you think your own colleagues measure up?
This wasn’t the first time I had heard about this particular phenomenon: lower income / working class folks donating more of their wealth (either principally or proportionately) than their wealthier counterparts. But just so we’re on the same page, here a few bits of supporting information.”]The Walton family, heirs to Sam Walton’s Wal-Mart fortune, donated a mere $6,000 (total) to the Wal-Mart “Critical Need Fund”, a program for Wal-Mart employees that suffer grave misfortune (house fires, floods, etc.). By comparison, the employees, all making an average of $8-$10 per hour, gave $5 million that year (2004). (Source) To really twist the knife, the Walton family made a combined $3.2 million dollar contribution to Conservative lobbyist efforts that same year. Historically, their philanthropic track record consistently shows they would rather use their money towards political causes rather than charitable ones.
A recent story on NPR about a study in philanthropy supports the same conclusion, as well. In that study, conducted by Paul Piff of U.C. Berkeley, test subjects were surveyed for information pertaining to their socioeconomic class, and then participated in a “game” where they were given 10 credits (cash equivalents) — when the game finished, they were allowed to give away remaining credits to test subjects that they will never meet. Says Piff:
So interestingly and possibly counter-intuitively, we found that people who were actually ranking themselves as relative high in their socio-economic status were less inclined to give points away than were people who ranked themselves as relatively lower in social class.So essentially, people who have more, or who identify themselves as having more, were or tended to give less in this just very simple task of generosity toward a stranger.
McClatchy has reported similar findings from analysis of data from the Bureau of Labor Statistics. As of 2007, the poor (incomes ranging from $10k to $19k annually) donated, on average 4.3% of their income to charitable causes, nearly twice the overall average. The wealthier classes ($73k annually and up) donate 2.0 – 2.1% of their income annually.
In Nickel & Dimed, Ehrenreich’s co-workers independently and repeatedly helped her out in a bind, giving her food or clothing when she needed it, even though many of them could barely get by themselves. Perhaps this philanthropic spirit is a consequence of the point Ehrenreich makes at the end of the book: the poorer class donate their most precious commodity, their time & energy, by working for substandard wages.
Many campus and advocacy groups are currently involved in struggles for a “living wage.” How do you think a living wage should be calculated?
Before this can even be tackled, it must first be established what quality of life any individual worker is entitled to. Is it a right to have shelter, medical care, and food, if one is able-bodied and willing to work?
As far as I see it … try to follow this … being unemployed is just a very unproductive government job that involves filing papers, taking courses, and passing around papers.
It’s worth noting that Fisker does not believe people are entitled to jobs, and that we should all be grateful to have work, if we do. His point was merely that it is a bit ridiculous to pay people to fill out meaningless paperwork that wastes their time, and that it would be better if we had more productive outlets, or better yet: if we could learn to live on less.”]Back in the post-Depression era, as part of the New Deal, many public works projects were created to help give people jobs but simultaneously invest in our country. President Obama tried to revive this initiative early on in his term, with his call for “shovel ready projects” as part of the America Reinvestment plan, but it seems that it faded out of popularity as other, more salacious, issues arose.
That said – a “living wage” should, in my opinion, be substantial enough to pay for shelter, food, and basic medical care (either insurance or the equivalent). Anything less does not deserve to be called a “living wage.” This amount should vary by both region and family size.
It’s unrealistic to have the government elevate the current minimum wage to the “living wage” (although the minimum wage does need to be elevated – adjusted for inflation, it’s now equivalent to pre-Clinton era buying power) – however I think what should happen is that for any given state / region, there should be an established rubric for wage levels. Employers would advertise jobs based on how many people the wage can realistically support. In an area where a single person can live on $1,000 / month ($1250 gross), a job that pays $7.75 / hour can be listed in the range of “adequate living wage for one person, no dependents.” If we assumed that in this same area, a single dependent (ie. a single mom w/ 1 child) could be provided for on $1,500 / month, jobs that pay $11.72 / hour could be listed as “adequate living wage for one person, one dependent.”
This data would be re-calculated annually, using BLS data and other aggregate data sources, and employers would be required to disclose which bracket their positions fall under. Potential employees can then make more realistic decisions about where to work, when considering different lower-wage jobs.
The workers in Nickel & Dimed receive almost no benefits – no overtime pay, no retirement funds, and no health insurance. Is this fair? Do you think an increase in salary would redress the lack of benefits, or is this a completely separate problem?
Overtime pay is required for most non-exempt positions (there are some exceptions, if I recall) by the FLSA. Retirement funds and health insurance are not required, but it is wholly unrealistic to think America can sustainably continue without our poorest class receiving some form of benefits.
I see two solutions, one of them substantially more realistic than the other.
The first one is in line with my living wage solution from earlier – Employers should provide assistance to workers about social programs for which they will qualify, based on the wage being paid. Our economic stoicism has to end; wage should not be a taboo topic, and I get the feeling that employer’s have been taking advantage of their employees’ poor math literacy for too long. If an employee will need food stamps, medicaid, WIC, or other subsidies to get by because you can’t afford to pay them enough for their particular situation, then help them. Every employer I’ve known claims to care about their employees – this is a relatively small gesture that would go a long way to help them out.
The second solution is more permanent, but highly unlikely. As a society, we have been babied and coddled by low prices that are acquired through indirectly screwing many other people. Perhaps it’s cheap because corners were cut, or because it’s heavily subsidized, or because it’s outsourced to China; in any of those scenarios, we are losing in the long run from it. Wal-Mart sets the low bar for prices by practically extorting it from their vendors, outsourcing to China where necessary, and exploiting their workers.
There are two ancillary effects from that: the first is that Wal-Mart’s competitors must engage in similar practices to stay competitive — would anyone really pay twice as much for eggs at Kroger or Meijer if they knew what price Wal-Mart had? The second is that since all Wal-Mart stores are corporate owned, the profits from those stores are leached out of the community over time; and while some might argue that the community recoups the losses in property / sales / business taxes, I’d like to remind them that Wal-Mart receives an egregious amount of government subsidies, tax relief, and other such benefits from the communities that beg them to plant roots there. There is no free lunch, and while the nominal cost of items at “rock bottom prices” is low, someone along the supply chain is paying for it.
And that is essentially the rub of this book — so many of the things we enjoy as luxuries of living in a first-world society are borne on the backs of a class of people that are, for the most part, sequestered to their economic class so that others may have convenience. The hidden cost of our conveniences is paid for unintentionally by people that have been convinced they deserve to be where they are, or bamboozled into thinking it is possible to be economically mobile while working two low-wage jobs and barely getting by.
While a revolution that Marx & Engels wanted may cause an upheaval that could result in positive change for the working class, I am skeptical it would turn out favorably for them, given how shrewd the political gamesmen are in this country.
A realistic, yet still real, change would do a world of good, and to re-cap my list of suggestions:
- Employers should focus their efforts on providing benefits to their employees, rather than wasting that money on things like drug and personality tests.
- Eliminate the security deposit in favor of raising the monthly rent slightly (if necessary) in regions where motels & hotels have high residency rates.
- Establish regional “living wage rubrics” to specify the amount of income required for varying familial situations, and have employers inform their applicants what level a particular position can provide for as well as what it can immediately grow to.
- Encourage or provide incentives for employers to assist their employees in acquiring government aid; applications and information should be both available to employees that qualify (determined by the wage the employer is paying) as well as assisted by the employer.
Low wage jobs aren’t necessarily a bad thing – they are plenty adequate for kids in high school, for people re-entering the workforce, or for folks that are wanting some supplemental income but are not otherwise trained. But there seems to be a general malaise about their reality; society seems unwilling to call a spade a spade (re: exploitation) and is content to simply reap the benefits of it, and the workers that are doing the work often seem uninformed about their options or what they are truly capable of.
Better informing employees and improving housing won’t solve poverty, but it will create a slightly more humane working environment so that perhaps someday there will be less co-incidence of “employed” and “homeless.”