It’s not hard to figure out where the new poverty is coming from

I got my first job in 1977, in a nasty, greasy restaurant. It paid about three bucks an hour. What do you suppose that would be today? A little over $11.00 an hour, which is about what I make now. So, I have about the same buying power working for a highly profitable Fortune 500 software company doing complicated tech stuff as I did when I was 15 years-old working part-time washing dishes in a barbeque joint. I am by no means alone, this is one big reason why corporate profits and CEO pay have skyrocketed:

HuffPo — The federal minimum wage was first put in place in 1938. From that year until 1968 when its value peaked, the purchasing power of the minimum wage increased by more than 140 percent. As a result, minimum wage workers saw a sharp increase in their living standards. Over this 30 year period, low wage workers shared in the gains of the economy as a whole as the minimum wage rose in step with productivity growth.

If workers at the bottom had continued to share in the economy’s growth in the years since 1968 as they had in the three decades before 1968, we would be looking at a very different economy and society. If the minimum wage had risen in step with productivity growth it would be over $16.50 an hour today.That is higher than the hourly wages earned by 40 percent of men and half of women.

Let that sink in for a moment: almost half the working US population is making less than the effective, inflation/production adjusted minimum wage from half a century ago. Even though our productivity, experience, education, and skill set has soared damn near into orbit, our real wages have fallen so far we are now competitive with Chinese peasant labor. Which is all you need to know to understand why some cash rich companies have purportedly discovered their patriotic commitment to the US worker in the past few months.

I realize a lot of readers here simply don’t see the new poverty firsthand. But it is not hard to find if you start looking. It is poorly sequestered away in low end apartment complexes, upstairs parental attics, and grandma or grandpa’s basement, it is sprinkled through out suburban America, hidden in plain sight, easier to find than inner city ghettos. Trust me, once you are mired in this trap, your degrees won’t matter, hard work won’t matter, your charm and your friends who say they will help you will not be able to help you, your experience will not matter, your on the job performance will not matter, even head hunters cannot or will not help you find a better job.

You are now typecast a loser. A lifer in the growing ranks of poverty. A moocher, a rate sucker, and if you seek help to make ends meet and survive, you will be labeled a cheat, a lazy good for nothing parasite, an unemployment chiseler, maybe even a crook.

It’s the economic equivalent of the no-fly list. You don’t know how you got on it and there’s no way to get off, outside of prison or death.


  1. unbound says

    And the interesting part is how people have been fooled into thinking that such wages and the current economic conditions are acceptable.

    One of the things older people (like myself) that lack the power of observation (not like myself) seem to not understand that places like McDonald’s hires people for their career (I actually had an interview with Hardee’s that went this way back in the late 1980s…I was a well experienced fast food cook that was looking to work for 6 months, and was rejected because they were looking for career seeking people). Look across the counter, and you find more often than not that the people working are not teenagers (in my area, it’s a lot more often than not). Low wages are no longer being paid to teenagers looking for spending cash. People are trying to subsist on these wages.

    Another thing people seem to not understand anymore is that $100k really isn’t a lot of money anymore. As a matter of fact, if you live in a big city (which most $100k+ workers do), it won’t get you to middle class. $100k was a whole lot of money 30 years ago; and, it certainly isn’t bad today, but it isn’t enough to live in a large house and drive expensive cars. $100k today is worth as much as $42.5k was 30 years ago. Even in 1983, nobody would claim that a family making a little over $40k was living the high life…but 30 years later, that is exactly the way the public seems to perceive low-end 6 figure salaries (which should be very fricking common place for most families in the US).

  2. Onamission5 says

    Last time I worked for a corporation was the last time I was offered health insurance, and it was at a “reduced” rate which equaled a full third of my monthly wages. I was making at that time twice minimum wage. If I’d gone ahead and agreed to have health insurance for me and the kids, I’d of had just enough left over to feed us and put gas in my car to get to work. Forget about rent, utilities, emergencies, childcare, clothing, or fun. Not that I could make rent on my own anyway, but utilities I had covered. That’s the tradeoff that all too many people are making, those are the choices we have to make at the wages we can get: electricity or health care?

  3. sumdum says

    Ho ly CRAP! 11 bucks an hour? I make more at the local supermarket. The US is long overdue for a revolution.


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