National (In) Security- In the United States of Inequality

The working poor cluster in certain occupations.  They are salespeople in retail stores, servers or preparers of fast food, custodial staff, hotel workers, and caregivers for children or the elderly.  Many make less than $10 an hour and lack any leverage, union or otherwise, to press for raises.  In fact, the percentage of unionized workers in such jobs remains in the single digits — and in retail and food preparation, it’s under 4.5%.  That’s hardly surprising, given that private sector union membership has fallen by 50% since 1983 to only 6.7% of the workforce.

Low-wage employers like it that way and — Walmart being the poster child for this — work diligently to make it ever harder for employees to join unions.  As a result, they rarely find themselves under any real pressure to increase wages, which, adjusted for inflation, have stood still or even decreased since the late 1970s. When employment is “at-will,” workers may be fired or the terms of their work amended on the whim of a company and without the slightest explanation. Walmart announced this year that it would hike its hourly wage to $11 and that’s welcome news.  But this had nothing to do with collective bargaining; it was a response to the drop in the unemployment rate, cash flows from the Trump tax cut for corporations (which saved Walmart as much as $2 billion), an increase in minimum wages in a number of states, and pay increases by an arch competitor, Target.  It was also accompanied by the shutdown of 63 of Walmart’s Sam’s Club stores, which meant layoffs for 10,000 workers.  In short, the balance of power almost always favors the employer, seldom the employee.

As a result, though the United States has a per-capita income of $59,500 and is among the wealthiest countries in the world, 12.7% of Americans (that’s 43.1 million people), officially are impoverished. And that’s generally considered a significant undercount.  The Census Bureau establishes the poverty rate by figuring out an annual no-frills family food budget, multiplying it by three, adjusting it for household size, and pegging it to the Consumer Price Index.  That, many economists believe, is a woefully inadequate way of estimating poverty.  Food prices haven’t risen dramatically over the past 20 years, but the cost of other necessities like medical care (especially if you lack insurance) and housing have: 10.5% and 11.8% respectively between 2013 and 2017 compared to an only 5.5% increase for food.

Include housing and medical expenses in the equation and you get the Supplementary Poverty Measure (SPM), published by the Census Bureau since 2011.  It reveals that a larger number of Americans are poor: 14% or 45 million in 2016.

via informationclearinghouse National (In) Security- In the United States of Inequality