Six on History: "our" Economy
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"The sudden shift from “we love our essential workers” to “they’re living off the government dole” seemingly happened overnight.
Across the country, local media coverage has been filled with stories of business owners lamenting that they are unable to fill positions as economies reopen.
“We are short-staffed. Please be patient with the staff who did show up. Nobody wants to work anymore,” reads a sign outside a McDonalds drive-thru window in Texas, according to a viral internet video.
These viral anecdotes, in addition to a weaker than expected April jobs report, have raised concerns over a labor shortage in the United States and how to best address it. The Wall Street Journal reports a record 8.1 million job openings across the country.
But it’s not that people don’t want to work — it’s that they don’t want to work for so little.
Dan Price, the CEO of Gravity Payments who raised the starting wage at his company to $70,000, recently said he gets 300 applications for every opening.
It turns out there’s no “labor shortage” — just a shortage of people who will work for starvation wages, especially during a pandemic that’s hit low-wage workers the hardest. What we are witnessing now is a reckoning and reassessment of the future of work.
But rather than think critically about why so many workers are hesitant to return, some pundits and right-wing politicians blame unemployment benefits. President Joe Biden’s American Rescue Plan provides an extra $300 a week for those out of work during the pandemic.
The GOP now wants to take that away. Republican governors from Montana, South Dakota, Utah, Iowa, and Arkansas, for example, have already announced they will cut unemployment benefits in order to force more people back to work.
If Republicans truly wanted to abide by their free market ideals, they would recognize that in order to stay competitive, employers must adapt to the demands of the market and pay their workers what they are worth.
Instead, they’re opting to slash unemployment benefits, oppose significant increases in the federal minimum wage, and have the government subsidize businesses by forcing employees to rely on assistance like food stamps to get by. Same as it ever was.
The COVID-19 pandemic has exposed the reality that our economy is dependent on exploitation. As the virus spread, many workers watched their bosses prioritize profit over the lives of employees, who risked their health and lives to work frontline jobs during a pandemic that killed over 500,000 people in this country.
While these low-wage workers braved the pandemic, their CEOs cashed in.
A new report from the Institute for Policy Studies found that among the 100 S&P 500 firms with the lowest median worker wages, 51 rigged the rules in 2020 to award CEOs large bonuses while their low-wage employees suffered. Average CEO pay skyrocketed 29 percent to over $15 million, while average employee salaries fell to barely $28,000.
It’s been well over a decade since Congress raised the federal minimum wage. But meanwhile, the CEOs and speculators who get rich off minimum-wage labor have seen their fortunes skyrocket. If the minimum wage had increased at the same rate as Wall Street bonuses since 1985, it would be worth $44 an hour today.
Learn more at the link in bio.
"When the pandemic clobbered the US airline industry, American taxpayers stepped up to help: Congress has approved multiple bailouts, including a recent $15 billion aid package to help airlines weather this crisis. But the airline industry has been in no hurry to return the favor. In fact, even amid a pandemic that has upended many families’ travel plans and budgets, carriers have been far too reluctant to change their restrictive refund policies.
But Markey and his colleagues need to go a step further: Lawmakers must demand that unless airlines provide non-expiring credits or cash refunds to every passenger who was forced to cancel travel plans, they must give back their share of the roughly $50 billion in grants and loans they received in federal emergency COVID stimulus funds. Taxpayers should not be expected to underwrite the airline industry’s refusal to protect its own consumers.
Markey and Senator Richard Blumenthal of Connecticut and other lawmakers have been pressing airlines for a year to offer cash refunds to flyers, and even filed legislation last congressional session that would have required them to do so.
“Americans need cash in their pockets to pay for food, housing, and prescriptions during this emergency,” Markey and Blumenthal wrote in letters to 10 US airline carriers. “It is unconscionable that airlines are largely refusing to return customers’ money even as the industry sits on more than $10 billion in unused travel credits.”
While these efforts by lawmakers are laudable, they lack sufficient incentive needed to press airlines to act.
Airline CEOs flocked to Washington last year to implore the White House and lawmakers to provide carriers with COVID stimulus relief. If they want to keep that money, they need to give customers’ their money back.
Providing airlines, and the hundreds of thousands of airline employees, a lifeline during the pandemic was important. It saved jobs and livelihoods, staving off furloughs to help airline workers stay above water until enough Americans are vaccinated and travel resumes in earnest.
But it was also a big boon for executives and stockholders, as the bailout buoyed airline stocks. In May 2020, Delta Airlines stocks dipped below $20 per share. This week they hover near $45 per share – meaning the biggest beneficiaries of the government’s stimulus funds are investors.
Some carriers, including Delta, American Airlines, and United Airlines, have already extended the expiration date credits for COVID-related cancellations into 2022. American and United airlines have also begun paying back some of the stimulus money they received.
But airlines can do more. As the nation recovers from the economic fallout of the pandemic, taxpayers who bought plane tickets they have been unable to use deserve cash in their pockets too. Lawmakers should tell the airlines to pony up."
Editorials represent the views of the Boston Globe Editorial Board. Follow us on Twitter at @GlobeOpinion.
Yahoo! (5/7/21) quoted a Wall Street analyst saying that the jobs report “made it much easier to argue that the re-upping of enhanced unemployment benefits by $300/week in the March relief bill has crimped labor supply.”
A year later, things aren’t going as planned. News outlets trumpeted what they often called “disappointing” job growth numbers in the United States (Yahoo! Finance, 5/7/21; CNN, 5/7/21; Reuters, 5/7/21; BBC, 5/7/21; Time, 5/8/21). The New York Post (5/7/21) ran a comical front page with an employer begging for employees—a sort of inverted class-consciousness for the notoriously anti-labor tabloid—blaming the Biden administration, because city “restaurants have been burned by a shortage of workers who say they’re better off collecting Covid relief bill–enhanced unemployment checks.”
Front-page New York Times graphic (5/8/21)
The New York Post (5/8/21) reported that restaurants are desperate to hire workers—but not so desperate enough to offer higher wages, apparently.
The Wall Street Journal editorial board (5/7/21) didn’t mince words when it denounced “government policies that have shoveled cash to consumers and rewarded Americans for not working.” “Most lower-income workers can make more sitting on the couch,” the paper sneered.
But the perspective of those workers and unemployed people are often left out of stories, or their quotes are buried beneath the partisan bickering over the jobs numbers and the complaints from businesses.
Before the job growth figures came out, media reported that business owners and managers were complaining of sluggish hiring. Many of these stories led with complaints from employers and analysis by economists. Sometimes these were followed by one or two quotes from workers—who offered the rationale that wages were too low for high-risk work in a pandemic, and that employers should consider raising pay—but these were often overshadowed by the perspectives of owners and analysts (Philadelphia Inquirer, 5/5/21; New York Times, 4/8/21, 5/7/21; Bloomberg, 5/6/21; Business Insider, 4/21/21).
More input from workers and labor advocates would add needed context to the narrative. Many labor advocates scoff at how many of these stories blame a “labor shortage,” even though the reality is that there are plenty of workers out there who just don’t want to work for low wages. It is unquestionable that the enhanced unemployment benefits and stimulus payments have offered an alternative for people who would otherwise take risks to work in a pandemic; it’s now possible for them to wait to return to work until vaccination rates increase and Covid-19 infection rates decline.
But some of the problems in jobs growth predate the pandemic. Consider the so-called “retail apocalypse,” the media’s term for a wave of closures in the brick-and-mortar retail sector (Atlantic, 4/10/17), especially among the titans of big-box stories like Sears (CNBC, 10/12/18) and JC Penny (CNN, 2/27/20). The prevailing wisdom is that these stores have suffered from the growth of delivery companies like Amazon, which is notorious for poor working conditions, including not letting workers use the bathroom (CBS, 4/5/21), and union busting (Vox, 3/24/21).
And while the Financial Times believed that Covid-19’s seemingly low mortality rate wouldn’t create a worker shortage akin to the one after the Black Death, death isn’t the only factor. If a worker doesn’t have a good employer-backed medical plan, hospital care, ambulance rides and days off work are financial burdens one might want to avoid.
Sarah Jaffe: “Your boss was happy to dump you off the payroll, possibly while getting a federal bailout, but now they’re complaining that you don’t want to come back?”
Sarah Jaffe, author of Work Won’t Love You Back, noted that the narrative that potential workers are simply living off government payments is ill conceived. She told FAIR in an email:
One thing I think getting missed is that the US decided to let everyone get laid off and do its subsidies through expanded unemployment, rather than the type of furlough scheme done in the UK, where the government stepped in to pay the wages so that people could remain in jobs. The result of this is that people feel no loyalty to old work and have every reason not to—so why return to those crap conditions? Your boss was happy to dump you off the payroll, possibly while getting a federal bailout, but now they’re complaining that you don’t want to come back?
Also: The first round of expanded unemployment gave people $600 a week extra. That was hardly eating-bonbons money, yet we heard about people having the ability to pay the bills for the first time with it. That expired, and I’ve spoken to workers who spent months wondering what would happen to them. The persistent story since the last crisis was pervasive underemployment—2008 wiped out a lot of middle-wage jobs and replaced them with low-wage jobs.
So the re-expanded deal was $300 extra a week—the equivalent of $7.50 an hour at 40 hours. These are not cushy benefits in the least! A one-time stimulus check of $600 and then another of $1,400 (which by the way a lot of people haven’t gotten, including, er, me) is definitely not “retire and watch HBO” money. What it is is exactly what unemployment was designed to do: allow people to have some breathing room before having to accept the first crappy job that came along. That’s the point of unemployment insurance, which we pay into so that it’s there when we need it. That this is some government handout is utterly ridiculous, and it harks back to the godawful days of the welfare queen narrative.
There’s another problem with the media coverage on recent hiring. The recent jobs numbers and the anecdotal reports of sluggish hiring are painted as bad news, not just with words like “disappointing,” but with the visuals that have accompanied these stories in places like the Washington Post and New York Times. But why is it such a bad thing that workers have increased economic options in the pandemic, putting them in a better bargaining position? Labor advocates have been fighting for a increase in the minimum wage, with some state and local success (CNBC, 1/2/20), though its prospects at the federal level died when Arizona Democratic Sen. Kyrsten Sinema infamously gave the boost a literal “thumbs down” (New York Times, 3/7/21).
Now workers might be in a better position to push wages up if employers are forced to compete with both the fear of the pandemic and increased unemployment payments. That most media portray this as a bad thing exposes an anti-worker and pro-boss bias."
