Higgins: Laboring under a misconceptionWritten by Tim Higgins | | email@example.com
“If you work hard, sooner or later your boss will notice, you’ll do better, and earn more,” is what my father told me as a boy. And like all good sons, I listened. For many years it actually seemed to work. My labors began as a bus boy and a dishwasher at the age of 13, earning a minimum wage then that’s less than a gallon of gas is now. On Sundays when the restaurant wasn’t open, I hand stuffed and sold newspapers to earn extra money; a fairly formidable task, as we sold about 4,000-5,000 of them on an average Sunday.
Career advancement, such as it was, saw me doing everything from pumping gas and doing oil changes to serving as an overnight truck stop short order cook, before discovering (as many of those in college are today) that the college degree I was seeking would not enhance my career opportunities the way I thought. So it was back to being low man on the totem pole, this time as a laborer in the printing industry. Over 30 years of applying myself, and a fair amount of luck, I advanced through a career in production and sales; even running a manufacturing operation down in Georgia for a while.
An erroneous assumption led to re-evaluation, as the daily newspaper industry came crashing down around my ears. It wasn’t the first time I had to start again, but this time there was something different. Oh sure, the nation was dealing with a recession this time, but I’d seen that before; and rampant inflation in the late ’70s besides. No this time there was something different both from employers and from opportunities available; but I could never put my finger on it until reading an opinion piece in the Wall Street Journal. You see, most people in the nation today, regardless of effort, are making less than they did before.
With data from the Census Bureau tabulated by Sentier Research, the Journal reported that average median income declined by about 2.6 percent from December 2007 when the Bush housing bubble burst to June 2009, when the Obama recovery began. Amazingly however, in the period since the economy hit bottom, median household income is down another 5 percent. Apparently, a “recovery” today can be even worse for income than a “recession.”
Of course part of it is the current relationship between employers and employees. With unemployment above 8 percent for the last three years, there’s a large labor pool to draw upon. Many of those already in reduced circumstances could be induced into employment at lower wages than they previously earned rather than face the continued soul-sucking prospect of relying on government subsistence. Those who continued to be employed could likewise be induced to perform at greater levels, with the ego-destroying prospect of unemployment staring them in the face as an alternative.
Lest all come away with a one-sided view of job creators however, try seeing this from their point of view. The cost of employee benefit programs has been drastically increasing for years now, largely through increases in health insurance. Government intervention in health care — until recently, largely restricted to the price controls to hospitals and doctors as part of Medicare and Medicaid — did nothing to improve these prospects, and unintentional or not, could do little but make it worse. The full-blown intervention of the Affordable Health Care Act, the subsequent court challenges and the still unknown implications of this legislation have most employers wondering what each of the employees will cost them. New hires are therefore problematic at best and all but impossible at worst.
The continuing disparity in the pay of private sector workers vs. those in the public sector doesn’t help either. Forget that the households working in the private sector have seen greater losses and that the gap is greater than it’s ever been ($77,998 vs. 63,800 according to the WSJ); and look instead to every level of government’s request for additional “revenue” (taxes) from decreasing taxpayer income in order to support budgets that largely consist of compensation packages for their workers.
Nor does it help that government’s claims about the “cost of living” are meaningless fiction, since they ignore the two largest drains on income these days, food and energy. We’re paying more for everything from tap water to gasoline, from electricity to corn flakes; and the government chooses to ignore the toll this takes on take home pay. Some, including myself, would place blame for this on increasing government interference through legislation and regulation; but that, too, goes largely ignored.
Then again, maybe what should now be ignored were my father’s words. For it seems that the policies that leaders of both parties seem intent on following make them meaningless these days, and that I have instead been laboring most recently under a misconception.