CHAPTER ONE
The Bargain-Basement Economy
By the time I arrived at Atrium Medical Center, the relatively new hospital just outside my hometown of Middletown, Ohio, my dad’s care was focused on keeping him as comfortable as possible as his body slowly gave out. He wound up in the hospital after falling down the stairs, which resulted in a punctured lung and broken ribs. Lungs are pretty amazing, and if somewhat healthy will actually close holes and heal on their own. But because his lungs were far too damaged owing to asbestos exposure in the factory, along with a pack-a-day cigarette habit that started in his teens, they were stubbornly refusing to heal. And he was much too weak to be a candidate for surgery.
My dad’s chances of surviving after that unlucky tumble were determined by the story of his entire working life. Like many men of his time, he graduated from high school and went right to work at Armco Steel (now AK Steel, since being bought by Kawasaki in the 1990s). He started at the bottom, on rotation and on call for any number of dirty, backbreaking jobs in the coke plant. After about a decade, he enrolled in the company’s apprenticeship program to become a machinist. After twenty-nine years of service, he retired with a nice pension and a gold tabletop clock. But his body paid the price. While he was “only” seventy-three years old, his body was well worn, especially his lungs, which instead of being plump like pink cotton candy were pockmarked, strained, and a lifeless gray. As he lay in a morphine-induced state of bare consciousness, our family gathered in this sparkling new medical facility, which my hometown was depending on to revive itself in the post-manufacturing world. Just a mile or so down the two-lane highway on which the ten-building medical campus sits are brand-new upscale developments, complete with stainless-steel appliances, granite counters, and sunken bathtubs. In 2015, AK Steel announced plans to build a new $36 million research and innovation center in Middletown, a major recommitment to the town, and one that would have made my dad proud. The area’s proximity to Interstate 75, which connects Middletown to Cincinnati to the south and Dayton to the north, makes it appealing for bedroom communities and office developments.
But none of this was on my mind as I sat in my dad’s room all day interacting with a cadre of health-care professionals, each of whom was responsible for one aspect of my dad’s care. What did manage to break through the haze was the seemingly endless number of health-care workers who played some role in caring for my dad.
There was the young man in scrubs who was the attending physician’s assistant and who, unremarkably, was thought to be the doctor until he responded to a medical question by saying, “That’s a question for the doctor—I’m just her assistant.” There was the respiratory therapist, who was gentle and efficient. There was the nursing assistant who skillfully turned Dad to change his bandages, her body seemingly too small for the task at hand. Then there were the four young men who gingerly yet powerfully managed to move my dad and all the machines tethered to his body into a new bed. And finally there was the nurse who was on duty during what would be Dad’s final hours with us. He was young—maybe late twenties—and wonderfully gifted at his job. I remember wondering how many of these young men and women would probably have worked on the factory floor a generation ago. Today health-service occupations are one of the biggest providers of jobs in the economy. And like the small army that cared for my dad, the wages range from poverty-level to solidly middle class.1
The need for legions of health-care workers, still mostly women but with a modest and growing percentage of men, will continue to swell as the baby boomers grow old and frail. In fact, it will be the low-paid health-service jobs that will increase the most as more baby boomers retire. This bargain-basement economy will grow the most for the foreseeable future—not the much-touted knowledge economy. Topping the list of occupations that will add the most jobs to our economy are retail salespeople, child-care workers, food preparers and cooks, janitors, bookkeepers, maids, and truck drivers. Of the thirty occupations that will add the most jobs in the coming decade, half pay less than $30,000 a year.2
This is the heart of America’s working class today. And it will be even more so tomorrow.
Like the hard-hat working-class jobs of previous generations, today’s working-class jobs are physically demanding, in somewhat surprising ways. Take, for example, this common job description for home health aides: “Appreciable physical effort or strain. Moderately heavy activity. May include lifting, constant stooping, and walking.” Four decades ago, backbreaking work on the factory floor offered hourly wages in the high teens. Being a home health aide, a common example of a manual labor job, entails lifting and moving people, not slabs of ore, and pays an average of $20,000 a year.3 At its heyday back in 1970, manufacturing accounted for 30 percent of all jobs, making the United States truly a blue-collar nation. No industry today comes close to the sheer dominance manufacturing had in our economy. But taken together, education and health services, along with leisure and hospitality—two big industries where bargain-basement jobs dominate—match the former heft of manufacturing. That’s basically what’s behind the transformation of working-class jobs in America. As companies shuttered factories in the United States and income inequality began its steady ascent, jobs for home health aides, child-care workers, fast-food workers, janitors, and waiters swelled to accommodate major cultural and social trends, including the growing disposable income of the upper echelon and the time crunch facing all workers, but especially those who have young children or aging parents to care for.
The New Big Jobs: Feeding, Serving, Caring, and Stocking America
The old leviathan of the blue-collar working class, the auto industry, is commonly referred to as the Big Three, meaning GM, Ford, and Chrysler. In their prime, these companies symbolized American ingenuity, prosperity, and industrial hegemony. Despite major setbacks, including bankruptcy filings, the Big Three automakers have rebounded, though employing a fraction of the workers they did at their peak. And in an unprecedented concession, the United Auto Workers (UAW) union agreed in 2007 to a two-tier wage system, with new workers hired at lower wages and with fewer benefits. Today about 134,000 hourly workers are employed by the Big Three, and a full quarter of those workers earn second-tier wages—$15.79 to $19.28 an hour, compared to the first-tier wage of $28.4 In 2015, the UAW successfully renegotiated contracts with the Big Three automakers, bringing entry-level wages into line with veteran wages. For example, Fiat Chrysler workers approved a new contract that would bump entry-level workers’ pay up to $28 an hour after eight years and provide signing bonuses for new hires.5 Workers at GM and Ford won similar new wage terms. To the tens of millions of individuals working in today’s bargain-basement economy taking food orders, bathing the elderly, mopping floors, and stocking warehouses, even the auto workers’ second-tier wages would represent a fat raise. One of the reasons even second-tier wages at the Big Three are higher than the average wages in the jobs that form the backbone of the working class today is that those autoworkers still have a union. The same is no longer true for broad swaths of workers toiling in what has become the largest source of jobs in the auto industry, auto parts manufacturing. Today nearly three-quarters of auto jobs are in parts manufacturing, and increasingly those jobs are being filled by temporary staffing agencies. One estimate found that approximately 14 percent of auto-parts workers were hired through a staffing agency, with paychecks 20 percent lower than those of workers who were hired directly.6
The degradation of manufacturing jobs, even when they’re brought back to the United States, reveals just how challenging it is for today’s workers to fight for a decent living. The fact that the once mighty, union-dense manufacturing sector can devolve into a place of low-paid, temporary staffing gigs is indicative of the power that’s been lost by our once working-class heroes. And it underscores the obstacles to rebuilding livelihoods for the majority of American workers.
The largest sources of jobs for the new working class fall into four main groups: retail and food jobs, blue-collar jobs, cubicle jobs, and caring jobs (see Table 1). Many of these jobs exist at the bottom of a long line of contracts and subcontracts, or are staffed by temp agencies, or are part of a franchise system—all forms of hiring that no longer align with existing labor laws written almost a century ago, making them vulnerable to wage theft and unsafe working conditions. These jobs are the giant amoeba of the American labor market, swallowing and engulfing more and more of our workers in a huge blob of low-paying work. This reality is not reflected in TED talks, swanky ideas summits, or other intellectually elite venues where rumination about the knowledge economy, entrepreneurship, and creative destruction are de rigueur. But make no mistake, it is the economy of our present and our future.
Table 1. The Largest Jobs in the Bargain-Basement Economy (2012)
Source: U.S. Department of Labor, U.S. Bureau of Labor Statistics, Table 1.4, Occupations with the Most Job Growth, 2012 and Projected 2022, at http://www.bls.gov/emp/ep_table_104.htm and Occupational Outlook Handbook at http://www.bls.gov/ooh/.
Food and Retail Jobs
Topping the list of the largest number of jobs in the bargain-basement economy are food and retail positions, employing nearly 17 million workers. These workers run the gamut from your order-taker at McDonald’s to your waitress at Olive Garden to your cashier at CVS to the salesperson at Macy’s. Of course, what they all have in common is low pay and a mandate to help satisfy our consumption needs. Back in 1970 the average American family spent most of its money on food to be eaten at home, with just 25 cents of every dollar spent on eating out. By the beginning of the millennium, 42 cents of every dollar spent on food was for take-out or dining out.7 And that increased demand for food on the go or a family dinner out is one reason that the so-called leisure and hospitality sector has grown from providing just 8 percent of all jobs in 1970 to providing 12 percent in 2013.8
There’s an enduring image of retail and food workers as being high school or college students who cruise through during summers or work after school year-round but then kiss those jobs goodbye once they’ve earned better credentials. But like most stereotypes, this image is far from accurate. Among waiters and waitresses who are officially grown-ups—that is, aged twenty-five to sixty-four—a full eight out of ten do not have a college degree. Similarly, most retail salespeople don’t have college degrees either: 75 percent. But what about fast-food workers? Aren’t they mostly teenagers? Nothing epitomizes teen jobs more than flipping burgers or working the drive-through for any of the big fast-food companies. Well, it turns out that just 30 percent of fast-food workers are teenagers. Another 30 percent are aged twenty to twenty-four. The rest—40 percent—are twenty-five or older.9 And just over one-quarter of fast-food workers are parents who must rely on meager pay and unstable schedules to provide for their children.10
The reality of retail workers is also quite different from the stereotype. Over half of retail workers are contributing 50 percent or more to their family’s income.11 And as in fast food, most of these jobs are held by adults without college degrees—defying the notion of a teen-centered workplace.
Arlene is a sixty-two-year-old African American woman who talked to me from her hospital bed after being admitted for complications from breast cancer. She recently moved in with her daughter, who is her primary caregiver as she goes through treatment. Arlene has worked in retail for nine years at the Walmart store in Evergreen Park, Illinois. She works the seven a.m. to four p.m. shift at the store, taking an hour-long journey on two buses to make it to work on time. She currently works as a sales associate in the electronics department but has done various jobs at the store, including being a cashier and a door greeter. Her hourly wage is $12.02, but as we’ll discuss in the next chapter, a ubiquitous challenge facing workers in food and retail is getting enough hours to earn anything close to a decent living. It’s no different for Arlene, whose hours range from twenty-four to thirty-two per week.
I asked Arlene to tell me how she felt treated on the job, and honestly, her answer startled me. She began by saying that Walmart supervisors treat her “very disrespectful, almost like a slave, I can almost relate to slavery because you don’t have any rights. I signed on to do this job the way they want it done. On the other hand, you do want to be compensated for what you bring to the table. You want to be able to take care of your basic needs, pay your rent, pay for your utilities, put food on your table. If you are in fact making billions of dollars for this company, then I don’t see what the problem could possibly be that you could take care of your basic needs and be compensated fairly. But that’s not how it is at Walmart.” Arlene, who marched with Martin Luther King Jr. in Chicago at the age of seventeen, today works in a job where she compares the way she’s treated to our nation’s greatest moral stain.
Arlene isn’t alone in her dissatisfaction. Various surveys find that jobs in retail and food service rank very low in terms of job satisfaction.12
The Blue-Collar Jobs
In the top-ten list of occupations providing the largest number of jobs in our country, two of the ten (laborers/material movers and janitors) could be described as traditional blue-collar work, that is, physical labor done overwhelmingly by men. But unlike four decades ago, these jobs aren’t on the assembly line or factory floor. Today over 2 million people in the new working class are employed as janitors or cleaners, earning an average hourly wage of $10.73.13 Nearly seven out of ten of these jobs are held by men. About half of them are held by whites, whereas Latinos make up 30 percent, African Americans 16 percent, and Asian Americans 3 percent of the other half.14 The other big occupation for working-class men today is what’s known as hand laborers and material movers, employing 3.4 million people.15 This is classic manual labor: moving freight or stock to and from cargo containers, warehouses, and docks. It also includes sanitation workers, who pick up commercial and residential garbage and recycling. The job requires a lot of strength, because most of the lifting and moving is done by hand, not by a machine.
When Eric runs errands after work while still wearing his uniform, people regularly come up to him to ask how they can get a job at Coca-Cola, his employer. “People have great respect for Coca-Cola and want to be part of the company,” he says. “What they don’t realize is that the company doesn’t really treat its workers well.” Eric is a general laborer at the company’s South Metro distribution center on the outskirts of Atlanta, working the night shift. He started with the 4:00 p.m. shift but now does the 8:30 p.m. to 4:30 a.m. shift. He was hired at Coca-Cola (officially known as Coca-Cola Refreshments) in October 2009 and made $11 an hour. Five years later he was at $13.40. Eric confided to me that most of his family doesn’t know how little he gets paid; they just assume he’s doing well because he works for Coca-Cola. His title, general laborer, covers a lot of different duties, from being a checker (someone who scans the inventory on delivery trucks when they come back to the warehouse to make sure there are no errors) to performing all kinds of tasks in the warehouse, including driving forklifts and unloading trucks. “Anything I’m asked to do, I pretty much do, at a general-labor pay scale.” When he started at the company, he worked as a checker, doing data entry of the drivers’ sales as they returned to the distribution center. But Eric was transferred to the warehouse, he believes in retaliation for trying to unionize the facility. Eric, an African American, is in good company in the warehouse, which was 100 percent staffed by African Americans when Eric worked there,* while the managers were all white. Damon, one of Eric’s former coworkers, explained to me that in the previous year, as a result of the union activity bubbling up, Coca-Cola had brought in new supervisors for the warehouse, all of whom are African American. He told me that during his four years of working in the warehouse, only five white men had been hired for the facility.
When I spoke to Damon, he was out on short-term disability as a result of wear and tear on his back and knees from his job. Despite being just thirty-two years old, his body is worn out. Damon is an order builder, which means that he puts together the orders to go out for delivery on trucks by manually hoisting cases of beverages and stacking them onto pallets. Damon, like all the “pullers” in the warehouse, is paid by the number of cases he moves during each shift, currently at the rate of 8.4 cents per case. At the start of each shift, the pullers are issued their “pull quota,” the number of cases they must move before leaving the warehouse. “I’m the number-one order builder, hands down,” Damon explained. “Nobody can outpull me. Because we get paid based on commission, I go out hard. I put my body on the line. In order to make a good living pulling cases, you got to be fast.” That fast pace, both Eric and Damon believe, contributed to the death of one of their coworkers, who died of a heart attack while pulling cases. “Every time I go into the warehouse, I see that day all over again,” Damon told me. The company offered counseling for the workers but wouldn’t approve any time off to deal with the loss of their colleague.
The pressure of the pull quotas is a major issue the workers have tried to get management to address. Pullers are literally running across the warehouse to complete their quota in as few hours as humanly possible, because the longer it takes to meet their quota, the less their hourly rate works out to be. And it’s important to note that the workers are not allowed to leave until they’ve met their quota, no matter how long it takes. Damon says he typically works six or seven hours a day, but most of his coworkers need eleven or twelve hours to complete their quota. The workers get two fifteen-minute breaks plus thirty minutes for lunch, but they don’t get paid for these breaks, because they work on commission. “I wouldn’t mind taking the break, but I came here to make money. If I’m not getting paid for something, I don’t want to do it,” Damon said.
The supervisors responded to the workers’ complaints about the quotas being too high by shifting some of the orders to another facility. But they also hired more order builders for the South Metro warehouse, which sounds good until you realize that more workers with fewer overall cases results in a substantial pay cut per worker. Damon explained that his activism has earned him a bad reputation in the warehouse and kept him from being hired for other positions there. He knows his body won’t tolerate the demands of hauling cases much longer, so he’s applied for several positions in the warehouse and has been passed over for each one. He was particularly excited about a forklift-operating job for the four to eleven a.m. shift, because that schedule would allow him more time with his kids, who are three and nine years old. He was told he didn’t get the job because of his attitude. Damon’s doctor issued a medical order restricting him from lifting more than fifteen pounds, which he shared with his supervisor. But since he didn’t slip and fall at the warehouse, his supervisors won’t accommodate the restriction by finding another job for him, even though he has worked there for four years. “Given how long I’ve worked there, I’d expect for them to say. ‘Hey, you got restrictions now, you can do this or that instead,’ but they will never let me do nothing else. They won’t let me learn nothing else. They just want me to pull cases and pull cases and pull cases and pull cases until there ain’t nothing left of me.”
Both Damon and Eric described a work environment in which managers play favorites, and only those who “suck up” get promoted to other positions. This is a common refrain among the working-class people I interviewed, in all types of jobs, resulting in arbitrary enforcement of the rules and a climate of intimidation.
Coca-Cola may have an $83 billion brand,16 but many of its warehouse workers live in poverty despite working full-time jobs. Eric said that one of his coworkers was living in an extended-stay hotel in one of the worst areas of town because he couldn’t afford rent. Another was living in the car-wash area of an abandoned gas station. Eric sees it as a basic lack of fairness that a megabrand like Coca-Cola pays its workers such low wages and treats them with such disrespect. He shared with me stories of workers being denied requests for time off. One of his coworkers had his wisdom teeth pulled and had a doctor’s note saying that he should take time off, but his manager denied the request and said he’d get a point on his record if he took the time (a worker with ten points is fired). One of Eric’s coworkers described their workplace as a “modern-day plantation-style environment.”
The unpaid breaks, the arbitrary enforcement of rules, the refusal to accommodate sick or injured workers, and the dangerous conditions fueled by the per-case payment structure all led Eric to reach out to the local Teamsters about trying to organize the warehouse. Eric is driven to improve the working conditions at the warehouse by his faith and his sense of justice: “God has a purpose in everybody’s life. And sometimes he’ll take you through a storm in order to get you through the light. So this is just a storm I’m going through right now at Coca-Cola. I love helping people. If I could snap my fingers and make the whole world right, I would do it. Working there at Coke, I fell in love with the people. A lot of men and women working there were walking in fear, and didn’t have the courage. In our pursuit of unionship over the last two years, I can see them putting their chins up and squaring their shoulders, ready for it. And that brings me joy, to see them inspired and ready to do better for themselves.”
The union drive is an uphill battle, even though Eric estimates that about 70 percent of the warehouse workers are participating at some level in the effort. But that percentage can change dramatically by the time an election is called (if it’s ever called), because like most major corporations, Coca-Cola will vigorously fight to keep the union out. The company has already brought in union busters to hold meetings with the workers, which they are required to attend. In an economy where job growth is still too slow and steady full-time jobs are still too elusive, if your front-line manager makes it clear that he expects you to vote against a union, courage can be hard to summon and hard to sustain.
Not everybody has the kind of spirit to demand better treatment, Damon told me. Far too often workers have been convinced that the job at Coca-Cola is the best they can do. But Damon sees it differently, and he tries to convince his fellow workers to demand what they’re worth. “You’re a human being,” he said. “You’re not just a piece of machinery to be put on an assembly line. You’re a human being. If you’re not being treated like a human being and being compensated fairly, then you should speak up.”
The Cubicle Jobs
The third largest source of jobs for the working class, coming in at over 9 million, breaks into three large occupational categories: general office clerks, secretaries and administrative assistants, and customer-service representatives. None of these jobs requires more than a high school diploma, though a fair number of college graduates may find themselves doing this kind of work as a way to get their foot in the door. But by and large, these jobs are held by working-class women. They answer phones, file papers, deal with customer complaints, type memos, make copies, order supplies, and basically keep everything in the office running smoothly. These jobs are found in a wide range of settings, from doctors’ offices to technology companies to local bank branches. In fact, despite the prevalence of ATMs, over a half million people work as bank tellers, with a median hourly pay of $11.99.17 And like fast-food and retail workers, one-third of bank tellers must rely on public assistance such as food stamps and health insurance programs.18 Although bank tellers often must purchase suits to wear to work, their low wage places them squarely in the new working class. As a former bank teller quipped, “You have to dress up, but basically you’re working as a cashier at Walmart.”19
Most bank tellers are paid less than $15 an hour working for an industry in which the top ten banks take in more than $100 billion in profits each year.20 Erika has worked at a suburban branch of TD Bank in Maryland for five years. The thirty-four-year-old African American woman fell in love with the banking industry while studying business management in college. When she started as a teller she was paid $11 an hour, and in five years she worked her way up to $12.57 and became an assistant head teller. In May 2015, Erika earned a raise to $14. When I talked to her on a Thursday evening, she still did not have her schedule for the following week. TD Bank is open seven days a week, so tellers tend to work both weekdays and weekend shifts, and Erika is no exception. The shifts are long: 7:30 a.m. to 5:30 p.m. or 10:30 a.m. to 8:30 p.m. during the week, and five-hour shifts on weekends. The unpredictable schedule makes it difficult for Erika to get her two teenage children to their various games, especially on the weekend. “I thought I was going into banking to actually provide a service to people. I was inspired by it,” she told me. But the reality, she discovered, is pretty much like working in retail.
What most people don’t realize is that tellers today are salespeople, with quotas for selling new products each month. TD Bank has strict rules that tellers must follow during every interaction with a customer, which are designed to create consistency and maximize sales. For example, Erika must say each customer’s name three times during each transaction, must always offer at least one product, and must be sure to invite the customer back. “It gets a little tricky and a little weird, especially when customers are in a hurry, to say all those things. ‘Hey, Mr. Jones, okay, Mr. Jones, thank you, Mr. Jones,’ and the customer is looking at you like ‘Why do you keep saying my name?’ Literally, customers are irritated and they want to go on their way and don’t want to hear your speeches and sales pitches.” The problem is that if Erika doesn’t follow the script, she can be written up. And TD Bank routinely sends out “secret shoppers” to make sure their tellers are following the playbook. Her quota is typically 1,000 points every three months, with each new account (depending on the product) earning 20 to 30 points, which is approximately twenty to thirty new products.
Erika’s biggest challenge on the job is the front-line management. As is the case with so many of the people I interviewed, her supervisor has the power to make her life on the job miserable. She’s been yelled at by her boss, and despite complaining to human resources, nothing has changed. In addition to challenges with her supervisor, Erika and her coworkers have all tried to get management to provide them with more predictable and stable hours from week to week. So far their complaints about the sales quotas, schedules, and treatment on the job have failed to be remedied by management. While Erika and her colleagues generate revenue for the bank and serve as the face of the brand, their compensation in the most profitable segment of our economy is particularly contentious. TD Bank’s top six executives collectively took home over $43 million in compensation in 2014.21 The way Erika sees it, in addition to being able to pay all her bills, an increase in pay would raise the status of tellers in the industry, who she explained are widely seen as unimportant.
As I discuss more in the next chapter, Erika’s experiences are all too common in the bargain-basement economy, where front-line managers call the shots, play favorites, and, most important, have an inordinate amount of power to make the lives of their employees miserable. Like Erika, millions of people in the new working class experience a steady accumulation of indignities on the job, from chaotic scheduling to arbitrary discipline to unpaid sick days. It all adds up to a strong feeling that their work isn’t valued and doesn’t matter, which is usually in great contrast to how they themselves feel about their work.
The Caring Jobs
At some point in our lives we will all come to rely on the professional care of someone. It may be a personal aide who shops and cooks for an aging parent or a child-care worker who nurtures and educates your toddler. Maybe it’ll be a home health aide who bathes, feeds, and clothes a disabled relative. These workers, all of whom earn around $10 an hour, help relieve so many of us from caring burdens that once were familial (and mostly women’s) responsibilities.
Historically, when caring work was not provided by a daughter, mother, or other female relative, it was outsourced to the lowest-status women in our society. From black slaves in the South to ethnic immigrants in the North to Chicanas in the Southwest to Japanese immigrants in Hawaii and California, caring for the aged, sick, disabled, and young was poorly paid and highly racialized from the founding of our country to the antebellum period.22 This legacy continued through the early twentieth century, even under public jobs programs developed after the Great Depression. In both the Works Project Administration (WPA) and the National Youth Administration (NYA), women of color were often directed to take domestic jobs, not public jobs. Similarly, agencies that were set up to help Japanese Americans find work upon their release from internment camps after World War II also directed women to domestic jobs.23
Throughout the first half of the twentieth century, it was not uncommon for white middle-class families to employ a woman of color to help clean the house, prepare meals, and care for children or elders. The legacy of this occupational segregation remains today: The majority of these caring jobs are still done by women of color, with a disproportionate share held by black women. Black women make up a full one-third of nursing assistants and home health aides and one-fifth of personal care aides (compared to about 6.5 percent of the population). Latinas make up 14 percent of nursing assistants and home health aides and close to one out of five personal care aides (compared to about 8.5 percent of the population). Taken together, close to 5 million people in our economy are employed as home health aides, personal aides, nursing assistants, and child-care workers, all earning around $9 or $10 an hour.
But it’s not uncommon for home care workers to actually earn less than the official minimum wage. How is that possible in America? Back when President Franklin Roosevelt signed into law some of the nation’s first labor protections regarding wages and hours, the laws were written to ensure that the majority of jobs worked by African Americans would be exempt—indeed, it was the only way to get the bill passed by a Congress controlled by segregationist southern Democrats.24 While not explicitly carving out an exception for African American workers, the National Labor Relations Act of 1935, which established the right of workers to collective bargaining, and the Fair Labor Standards Act of 1938, which established the right to a minimum wage and overtime pay, both specifically exempted agricultural and domestic workers from these rights.
Even though caregiving work in the home has become an official part of our economy—and a pretty big one at that, with 2.5 million jobs and fast growth—services provided in the home for pay were essentially not considered “real work” under existing labor law or standards until very recently. Congress attempted to bring more domestic workers under labor protections in 1974 by amending the Fair Labor Standards Act to cover all domestic workers except casual babysitters and individuals who provided “companionship services”—and left it up to the Department of Labor to define the scope of “companionship services.” Something got lost in translation between the Hill and the DOL. Here’s how the DOL defined companionship services for the purposes of establishing which kinds of workers would be protected: “fellowship, care, and protection,” which included “household work…such as meal preparation, bed making, washing of clothes, and other similar services,” and general household work not exceeding “20 percent of the total weekly hours worked.”25 Now, I have a lot of companions, but never have I washed their clothes or prepared their meals as part of my companionship. I’ve certainly never bathed them just because we were companions. But in the early 1970s, the folks at DOL didn’t see these kinds of services as work, just as part of good old-fashioned companionship (whose description matches almost perfectly that of an unpaid housewife). This is no accident; for hundreds of years, the work done by women in the home was never viewed as such, and that bias continued to bleed into defining the labor standards for women whose jobs are to care for the elderly, the sick, and the disabled. The no-labor-standards loophole was made even broader by allowing third-party employers such as big home care agencies to claim both the companionship-services exemptions, meaning for-profit agencies could continue to pay workers less than minimum wage and no overtime.
While attempts to update the regulations stalled over the past forty years, home health-care aides and personal care aides are now finally recognized as real workers, not merely “companions,” and therefore must be paid minimum wage and overtime. In 2013, President Barack Obama signed an executive order requiring the DOL to amend the regulations. After the order was challenged in the courts, the U.S. Court of Appeals for the District of Columbia Circuit finally ruled that the Labor Department had the power to interpret the law and change the exception. As a result, roughly 2 million domestic workers will finally have the full protection offered to every other worker in America: the right to be paid decently for a day’s work and to get paid extra for working overtime.
It’s a change that couldn’t come soon enough for Myrla, a home care worker in suburban Chicago. She earned $110 per day taking care of elderly patients in their homes. Some were suffering the effects of strokes, others had dementia, and some had chronic, debilitating illnesses like Parkinson’s disease. In testimony delivered at the National Domestic Workers Alliance’s third National Congress in Washington, D.C., she described her job: “I give them sponge baths twice a day, and once a week I bathe them. I assist them in transferring to the commode and assist in the bathroom. With some clients, I have used a Hoyer lift; others I have lifted manually. I cook their meals and feed them and ensure that their medicine is taken. I do housework, including making beds, doing laundry, washing dishes, and cleaning. Often I am asked to communicate between the family and the medical team. I also log daily activities and make lists of things for the family to buy or order from the pharmacy. I keep track of medications, encourage them to drink liquids, and do range-of-motion exercises. In at least two situations I have also taken care of other family members, including a patient’s granddaughter and the husband of a patient. I also train other caregivers and relievers on the routine, and do other work required by the family.”26
That $110 per day is certainly well earned. But it’s important to note that Myrla earns that $110 for sometimes working a twenty-four-hour day when she sleeps over at her client’s home. That comes out to an hourly wage of just $4.58—lower than what most people pay their teenage babysitters, but perfectly legal until January 2015. In fact, one out of four care workers earns less than the minimum wage.27 Myrla joined Latino Union, an organization fighting for greater dignity and rights for home care workers, to use her voice to advocate for better wages and labor protections for the work she loves doing.
Home care work is one of the nation’s largest and fastest-growing sources of jobs, fueled in large part by the tidal wave of aging baby boomers. As Myrla’s story illustrates, for many of these workers, the job conditions and pay eerily recall the days of domestic servitude. Much of the home care industry is dominated by big for-profit agencies, who recruit and hire out home health aides, personal care assistants, and nursing assistants. The agencies exist thanks to state and federal Medicaid and Medicare contracts, which pay the lion’s share (two-thirds) of costs related to home care. But given the profit motive and the right to pay less than minimum wage and no overtime (at least up until January 2015), these agencies could divert most of the money from the contracts for executive compensation and pay the women doing the actual work little more than an allowance (and no benefits, either).
The number of home care industry jobs has more than tripled since the 1970s, and will continue to be one of the largest sources of new jobs for the foreseeable future. The same goes for child-care workers and personal care aides. As structured currently, there are no career advancement opportunities in this field, unless an individual can carve out the time and money needed to rack up a new credential to move up the ladder to licensed practical nurse or medical assistant. There’s no universal apprenticeship system in place to provide on-the-job training to move up to better-paid positions. For the new working class, moving up the ladder requires thousands of dollars for community college courses and the time away from work to study and attend classes—an all but closed door for most working-class women.
Ai-jen Poo, director of the National Domestic Workers Alliance, articulated the central role care work plays in our lives by saying, “This is a profession that deserves recognition. It’s not like the pipes and railways of old but it is nonetheless infrastructure. It is the work that makes all other work possible.”28
These Wages Don’t a Living Make
When I was growing up, money was tight, especially before my mom went back to work. With four kids to raise and just one breadwinner, my mom became an avid coupon-cutter, hitting the grocery store with an envelope stuffed with savings. Most of my clothes were hand-me-downs, either from my older sister or from our church’s rummage sale. But we were never hungry. If I wanted a snack, there was always something to eat. In the winter the house was warm—and it was a house, a two-story, three-bedroom house on half an acre, with a pond, apple trees, and an aboveground pool. This security was all purchased with the earnings from my dad’s union job at the steel factory. For the new working class and their children, however, keeping the cupboards and fridge stocked is often a struggle, even with help from food stamps and the local food pantry—and even with two parents punching the clock.
Today the median wage for people in the working class aged twenty-five to sixty-four is $1.30 less per hour than it was in 1980 ($15.61, down from $16.91).29 Still, looking at the working class as an undifferentiated whole hides very important distinctions by gender, race, and age. Like American society more generally, there’s a hierarchy of earnings. Working-class men still outearn all other demographic groups in the working class, despite a nearly $5-per-hour decline in real wages over the past three decades. Today the median hourly wage for working-class men is $17.56, down from $22.04 in 1980. The white working class makes significantly more than any other demographic group, thanks in large part to the higher wages of men. As Table 2 shows, hourly wages for most workers have been stagnant over the past three decades, with modest increases for women and only significant declines for men.
A major challenge facing much of today’s working class is getting enough hours on the job. Nearly 15 percent of the working class today are in part-time jobs, some by choice, but nearly 40 percent of those workers are involuntarily employed part-time—meaning they’d prefer to have a full-time job.30 In order to cobble together enough income, 5 percent are holding down more than one job.
Table 2. Median Hourly Wages for the Working Class
Median Hourly Wages for the Working Class, 1980–2012 (2013 dollars)
Source: Author’s analysis of U.S. Department of Labor, Bureau of Labor Statistics, Current Population Survey Annual Social and Economic Supplement.
The declining wages of the new working class are visible in the changing demographics of the food stamp program and the rising ranks of food pantry shoppers. Since 2000, more and more people on food stamps actually have jobs. Many even have full-time jobs. In 2014, for the first-time, working-aged people, not children and seniors, were the majority of food stamp recipients.31 There’s no social program other than welfare that carries a heavier stigma—and to many conservatives, food stamps (now officially called the Supplemental Nutrition Assistance Program/SNAP) are nothing less than a scourge on American society. In 2014, 46 million people—20 percent of all Americans—used food stamps to fill their grocery carts.32 With the onset of the Great Recession, food stamp enrollment climbed significantly, growing from about 26 million Americans in 2007 to 40 million by 2010. With most new job growth confined to low-paid sectors of the economy, millions of people still struggle to meet their basic needs with a paycheck. According to the Department of Agriculture, about four in ten people who receive food stamp benefits live in households with at least one working adult.33 Shamefully, many of the working adults receiving food stamps and other government benefits work for some of the most recognizable brands and most profitable companies in the world.
Let’s start with fast-food workers—the ones we interact with the most, the so-called front-line workers. According to the UC Berkeley Labor Center, more than half (52 percent) of the families of front-line fast-food workers are enrolled in one or more public programs, compared to 25 percent of the workforce as a whole, with a price tag of over $7 billion per year to taxpayers. About $4 billion of that is for public health-care programs. Another $1 billion is spent on food stamps and another $1 billion comes from the Earned Income Tax Credit.34 So in order to make ends meet on an hourly wage of just $8.63, most fast-food workers rely on a mix of government benefits, from tax credits to health insurance. Meanwhile, much higher up the hierarchy, fast-food CEOs are living large on earnings 1,200 times that of the average fast-food worker.35 That’s a pay disparity higher than in any other industry, and yet these CEOs are employing millions of people at wages so low they can’t make ends meet.
A similar story can be found at America’s big-box retailers. Over at Walmart, our nation’s largest employer, about $6.2 billion in public assistance programs is spent on employees in the form of public health care, food stamps, and tax credits.36 A study examining Walmart’s cost to taxpayers in Wisconsin found that a single Walmart Supercenter cost taxpayers between $904,542 and $1.75 million per year, or between $3,015 and $5,815, on average, for each of three hundred workers.37 Let’s be clear: Walmart may offer the lowest prices, but it is far from broke. It typically boasts profits of $16 to $17 billion, and it spends billions more buying back its own shares, a move that artificially inflates the stock price, enriching shareholders and CEOs. As in previous years, Walmart spent $6.6 billion in 2013 on share buybacks. Now let’s say that instead of buying back its stock, it redirected those profits to its employees in the form of a raise: Walmart could have provided its 825,000 lowest-paid workers a raise of $5.83 an hour, providing them with the dignity of decent pay and at the same time no longer outsourcing the shortfall of their low wages to American taxpayers.38 Walmart announced in 2015 that it plans $20 billion in stock buybacks over the next two years. “This share repurchase program, combined with our annual dividends, reinforces our continued commitment to delivering increased value to shareholders,” said Charles Holley, Walmart’s executive vice president and chief financial officer, in a statement on the approved buybacks.39
As numerous studies have revealed how often corporations outsource the costs of low wages and benefits to us as taxpayers, conservatives are once again turning up the heat on the issue. But their outrage isn’t aimed at the mooching corporations for failing to pay their full and fair share of labor costs. Perversely, they’re outraged at the workers (the “takers,” in Mitt Romney’s callous formulation) who are forced to use food stamps.
These Jobs Aren’t Unskilled, They’re Underpaid
Labor economists identify occupations as being unskilled, low-skilled, mid-skilled, or high-skilled. This hierarchy can be useful to researchers as a way to cluster occupations to better assess trends in employment based on education and training. These groupings also provide an easy way to analyze the demographics of the jobholders. The problem lies in the fact that these terms have long transcended the academy and are tossed around casually to describe not only the jobs but the workers themselves. From the pages of the New York Times to the screeching talking heads on Fox News, it’s common to refer to people in many jobs as “unskilled” or “low-skilled” workers. This language is used by conservatives and progressives alike, and I used it myself until I heard a speech given by Barbara Ehrenreich at a conference on inequality sponsored by my organization, Demos. Ehrenreich referred to her time working in low-paid jobs for her best-selling book Nickel and Dimed. She worked as a maid, at Walmart, and as a nursing home assistant. Reflecting on the stress and hard work required to do these jobs, she said she learned that “there is no such thing as unskilled labor.”40
When we categorize work—work that often entails fast thinking, stamina, focus, and often demanding and repeated physical feats—as needing no or little skill, we are stripping these workers of human dignity and rationalizing the proliferation of poverty jobs. If we stop to really think about it, how can any job—labor performed for pay—really take zero or few skills? If that were true, there’d be no need for employers to require applications or in-person interviews for these jobs. After all, if it’s unskilled, any person should do. But that’s not the case. These jobs do require skills, just not the kind that are attached to academic or vocational credentials. Eric, the Coca-Cola warehouse worker, described to me the grueling pace that he and his fellow workers must maintain in order to meet their shift’s quota for wrapping and moving pallets of beverages. He videotaped some of his fellow workers and sent me a clip of one worker running around huge pallet after huge pallet with his wrapping gun, which ensures that the cases of beverage cans are held together when being moved by forklifts to their delivery trucks. This man undeniably has skills—agility, strength, and endurance being just three of them. In addition to employing physical dexterity, these workers must track the inventory using handheld scanners, which inevitably produces occasional errors or incorrectly identifies bar codes. So we can add cognitive skills to the skill set for this job too, namely problem solving and quick thinking.
If you’ve ever waited on tables—another so-called unskilled job—you know that this is a job that requires a herculean amount of skill, at least if you want to get tips for your work. I always tell people that waiting on tables is one of the hardest jobs I ever had, and to this day, when I am feeling stressed or worried about something in my office job, I have a bad dream about waiting on tables in which I forget the abbreviations for the menu items, forget to put in drink orders, or drop plates full of food. Waiting on tables is a serious juggling act that requires keeping track of where all your diners are in their meal—did Table 10 get their appetizers, is it time to put in the order for Table 2, does Table 4 need a refill, Table 3 is waiting on salads still, Table 1 needs their check, Table 5 is waiting for their change, and on and on. And you have to keep all this information straight while being friendly to people who very often do not return the favor. Doing this job well takes an enormous amount of skill, just not one that comes attached to a certificate or diploma.
Two of the bargain-basement economy’s largest occupations are routinely categorized as being unskilled: home health and fast food jobs. If measured by the training required to do these jobs, both require very little. The typical training provided for a home health aide is two weeks. For a fast-food worker, it’s on-the-job training, lasting anywhere from two days to two weeks.41 But for a home health worker charged with preserving the dignity and safety of a disabled or elderly person, an extraordinary number of skills are involved, including, in some ways, the highest of human skills, that of caring for another person who is often quite vulnerable. And if you ask a fast-food worker if his or her job is stressful, you can bet the answer will be yes. Working the floor of a fast-food joint requires serious multitasking skills, often in a hot and unpleasant environment. Fryers need to be cleaned, drinks need to be filled, orders need to be taken, and if one thing goes wrong—something seemingly as small as the syrup on the fountain machine needing replenishment—the whole balancing act collapses. Lines get long. Food gets cold. Fries get burned. And managers and customers get irate.
The ease with which CEOs and elites characterize working-class jobs as either unskilled or low-skilled is an indication of just how far our lived experiences have diverged.
*I interviewed Eric in August 2014. He quit the job at Coca-Cola in early 2015. I interviewed Damon to corroborate the allegations Eric made about the working conditions and management composition in the distribution center.