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Look around — wages and job opportunities are still stagnant

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Posted: Thursday, September 19, 2013 12:28 am

Don’t let the diminishing unemployment rate fool you. An economic crisis still looms in this country — the same one we were supposed to be out of years ago.

The richest 10 percent of Americans took more than half of the country’s income in 2012, according to a New York Times study. That’s the largest share since the government began keeping records. In fact, about 20 percent of the nation’s income was concentrated in the top 1 percent of earners.

As long as this continues, unemployment will remain rampant and wages stagnant. Because high levels of unemployment have lasted so long, businesses have no incentives to improve workers’ salaries, and companies know workers will take what they can get in this kind of environment. According to the same study, income for the lower 99 percent of workers has risen only 1 percent in 2012, while the richest 0.01 percent — yes, one-hundredth of one percent — enjoyed more than a 32 percent raise. In fact, the richest 400 Americans are worth more than $2 trillion, which is about the same as Russia’s gross domestic product.

While wages have stagnated for an overwhelming majority of Americans, so have employment opportunities.

The unemployment rate for the poorest families — earning less than $20,000 a year — is as high as it was during the Great Depression at 21 percent, according to the Associated Press. Meanwhile, households earning $150,000 or more are enjoying an extremely low unemployment rate of 3.2 percent.

“This was no ‘equal opportunity’ recession or an ‘equal opportunity’ recovery,” Andrew Sum, director of the Center for Labor Market Studies at Northeastern University, told the Associated Press. “One part of America is in depression, while another part is in full employment.”

This news comes on the heels of strikes from Walmart and fast-food workers, demanding a living wage.

Think about it: If we just raise the wages of low-paid workers, then there’s more money injected into the economy through their spending. Less people would have to work multiple jobs to make ends meet, thus opening more positions for those most affected by unemployment.

But raising the minimum wage hurts business and causes prices to skyrocket, right?

Not exactly.

A study from April 2011 by the University of California, Berkeley found that if Walmart paid its workers $12 an hour, the average shopper would only spend an extra 46 cents per trip. That’s nearly double the federal minimum wage and would only cost the consumer an extra $12.49 per year. And again, that’s only if the new costs were completely absorbed by consumers.

Other companies manage to pay better than minimum wage, like Walmart competitor Costco, which pays its workers $17 an hour on average. Not to mention that many of these companies claiming a higher minimum wage would break them are also present in countries with higher minimum wages than the U.S. — countries such as Australia, the U.K. and France.

The only people corporations care about are shareholders, not workers. The only way the economic situation will get better in this country is if policies like this start to change. We must quit prioritizing the rich over the poor and stereotyping low-income individuals and communities and give them what they deserve — fair wages and equal opportunities.

Justin Jones is a UF journalism senior. His columns run on Thursdays. A version of this column ran on page 6 on 9/19/2013 under the headline "Wages, job opportunities remain stagnant"

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  • Welcome to the discussion.

    3 comments:

    • Carlos the Plumber posted at 8:35 pm on Fri, Sep 20, 2013.

      Carlos the Plumber Posts: 156

      I think the public will accept a $1.25 menu. You all claim it's cool that the price of gas goes up. Why not burgers?

       
    • psugator posted at 2:39 pm on Thu, Sep 19, 2013.

      psugator Posts: 114

      It's really not that simple. If you raise wages for the service workers, the price of services automatically goes up.

      So, for example, if you force McDonalds, Wendy's, and Taco Bell to pay their workers $10/hour, that's the end of your dollar menu.

      With no more dollar menu, those very same workers who ate off it, will now be paying more to eat because of the price increases.

      Therefore, it's a domino effect.

      If you want to argue the very highest 10% are being overpaid, and they could take less money and have a more proportional distribution of wages at companies, this would be a more valid argument.

      Instead of the CEO pulling in $55 million, the CEO makes $250,000 and all the workers receive higher wages. This is a model that dominated America when the country was successful and the middle class was thriving. Also, equal income distribution in companies creates more spending (i.e. the worker who is making $20k is now making $40k and they can spend more money on restaurants, bars, clothes, etc. which also adds more job and employment in those sectors and so-on).

      Simply just saying "raise the minimum wage" doesn't work -- it's a structural problem that revolves around proportional income distribution.

       
    • Carlos the Plumber posted at 11:37 am on Thu, Sep 19, 2013.

      Carlos the Plumber Posts: 156

      Think about it: If we just raise the wages of low-paid workers, then there’s more money injected into the economy through their spending. Amen. The people trying to hold our wages (and public spending) down are hurting themselves and much as us.

      This was why the Clinton era boomed. We (the working poor) got a major tax cut and poof, that rising tide floated all boats.

      I'm sure some will say Clinton raised taxes. True he raised the tax rate but increased the personal deductions. As a plumber, I was making basically the same wages and getting a 50 cent raise every year. I was paying $2,350+/- a year under Bush I and went to paying $1,750+/- a year under Clinton. Clinton dumped tons of money into the economy because there are a ton of us at that wage level and we dump that money into the economy right away. We don't sit on it. We don't hide it offshore. We spend it right here and now.