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DAVID ROSMAN: Low minimum wage affects the underemployed work force

Wednesday, December 11, 2013 | 6:00 a.m. CST; updated 9:34 a.m. CST, Wednesday, December 11, 2013

Four news stories caught my attention this week, all dealing with wage and income in the United States. With more than 203,000 newly employed Americans in November and the unemployment rate at 7 percent, economic expectations were exceeded. To add to the good news, the third-quarter gross domestic product, the GDP, hit an annual adjusted rate of 3.6 percent.

However, those numbers are hiding something quite important, something of which Pope Francis and President Obama spoke, and that is the continued economic inequality Americans face daily.

Of those newly filled jobs, almost 60,000 are retail or food service positions, those that pay the federal or state minimum wage. If you happened to be hanging around some of the fast food joints Thursday, you might have run into those protesting for a $15 per hour wage.

Fifteen dollars per hour sounds like a lot of money when in fact it is only $30,000 annually if one were working a 40-hour week for 50-weeks a year, with  no vacation pay. KBIA/91.3 FM reported that a single parent with one child must make a minimum of $16.47 per hour or about $33,000 to make ends meet. Unfortunately, most retailers and food service employees work part time and full timers are usually limited to 37 hours a week with no hope for overtime.

I can only speculate that some of the new hires are men and women who have taken a second or third job to support their families. Simply paying the rent or mortgage, utilities, car and insurance payments and putting food on the table will eat up most, if not all, of one’s take home pay.

In Boone County, where rent will take $7,000 to $15,000 from a family’s budget, a family of four needs $36,000 to $57,000 to survive. If you are not sure what this feels like, have your civic or church group participate in a Poverty Simulation presented by Central Missouri Community Action; you will learn quickly that $15 an hour is still poverty wages.

If you believe service industry employees are students or high school dropouts, the Wall Street Journal will stop you in your tracks. In a March 2013 column, the Journal wrote, “Underemployment — skilled workers doing jobs that don't require their level of education — has been one of the hallmarks of the slow recovery. By some measures, nearly half of employed college graduates are in jobs that don't traditionally require a college degree.”

Of the nearly 60,000 new service industry jobs created in November, as many as 30,000 went to college graduates.

It is not just newly minted college graduates who are finding it difficult to land one of November’s 2,000 or so high-paying careers. Men and women with decades of professional experience are applying to Walmart and McDonald’s.

To say that social welfare, and I emphasize “welfare” here, is used by those who do not want to find work is truly not seeing the large cracks in the current system. The University of Illinois and University of California – Berkeley are telling us that more than 55 percent of all food service workers are on food stamps.  

This is not to say that there are no high wage jobs available. Boeing Aircraft’s average employee is paid some $87,000, something that makes the building of the new 777X in Missouri so important. However, of the top 250 Standard & Poor’s 500 Index companies, retailers seem to have the largest gaps between the “average” salaried employee and the CEO.

At J.C. Penney, No. 1 on Bloomberg’s “Top CEO Pay Ratios,” the average employee makes about $29,600, including salary and benefits, while CEO Ron Johnson made more than $53 million, a 1,795 percent disparity. By contrast, W. James McNerney of Boeing receives $27 million, a disparity ratio of 317 percent.

And $29,600 for retail may be high. Using MIT’s “Living Wage Calculator” for Boone County, the salary here might be closer to $22,000. The average food service employees would see $16,000 annually.

The protesters are not part of some socialist plot designed to redistribute wealth. Wage disparity and poverty go hand-in-hand and are thought to be two taboo topics to bring up at the dinner table. We need to stop blaming the workers and start discussing solutions. The first thing is raise the minimum wage to something more reasonable than Missouri’s $7.50 an hour.

David Rosman is an editor, writer, professional speaker and college instructor in communications, ethics, business and politics. He writes a weekly column for the Missourian.


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Comments

Michael Williams December 11, 2013 | 8:17 a.m.

Let me start out by asking: "Who wrote the title of this article?"

"Low minimum wage effects the underemployed work force."

What?

Effects?

Don't you mean "affects"?
________________________

So here we have professionals taking fast food jobs at wages far below that which they need and desire....because jobs are not available in their chosen fields....because this President has sustained a stagnant economy by creating chaos that stiffles investment in new jobs and increases uncertainty and the perception of risk....

.....and your solution is to arbitrarily raise the minimum wage????

You're fixing the symptom, not the cause.

You are simply playing "catch up"; this is NOT a solution. It's a sop getting us from today to tomorrow with no hope for next week.

The worst investment anyone can make (individual, group, community, state, nations) is the one that pays current expenses but creates nothing new tomorrow.

(Report Comment)
Ellis Smith December 11, 2013 | 8:32 a.m.

"A government which robs Peter to pay Paul can always depend on the support of Paul." - George Bernard Shaw (1944)

In a non-regulated economy, remuneration for services rendered is based largely on what those services are deemed to be worth. We can argue - endlesly - about whether the correct value has been placed on some skill or service (that is, either over- or under-priced), but in the end a (free) market determines remuneration.

To cite an example dealing with the Missourian, it's my understanding local columnists whose comments appear in the newspaper are unpaid. One might suggest that based on content, some may still be overpaid. :)

(Report Comment)
Michael Williams December 11, 2013 | 8:42 a.m.

Ellis: Yeah, I'm always surprised when a newspaper supports (via publication) forced wage increases paid by others when the newspaper itself pays little-or-nothing for services rendered.

Kinda destroys the "moral authority" thingie, dontcha think?

(Report Comment)
Michael Williams December 11, 2013 | 9:08 a.m.

Ellis: The disclosure statement at the end of Dave's column should read: "David Rosman is an editor, writer,...in communications, ethics..... He writes a weekly column for the Missourian [for which he is unpaid even though he supports the notion that OTHERS should pay higher wages to everyone except him although I don't know why]**.

Maybe he gets a free subscription to the paper which, of course, would likely be an untaxed form of barter.

I dunno.

** = my changes.

(Report Comment)
Ellis Smith December 11, 2013 | 10:45 a.m.

Perhaps being an unpaid columnist for the Missourian is far from the best example. Let's examine something else, from the late and not too lamented Union of Soviet SOCIALIST Republics.

There was a governmental health scheme (golly gee!). In an attempt to control costs, remuneration of physicians was severly controlled. As the situation progressed ( meaning in real time) it became less financially rewarding to practice medicine.

A high percentage of the available physicians at the demise of the government was female. Well, what's wrong with that? What was wrong was that males, both those who had been practicing physicians or might have otherwise considered a medical career, were pursuing other jobs, because they paid better.

Also, a young and reasonably nice-looking female could make more money as a prostitute than she could as a physician - especially if she worked in the illicit foreign currency economy. (Just what all parents wish their daughters to be!)

At the time of the demise of that disgusting government life expectancy in Russia had dropped to levels unknown elsewhere in the industrial world.

When government starts screwing around with economics the consequences can be "quirky" indeed; however, we need to keep in mind that both hell and Socialism are paved with good intentions.

(Report Comment)
Michael Williams December 11, 2013 | 2:33 p.m.

Ellis: To sum up your last missive, it's all about self-generated initiative.

Promote it, and good things happen.

Place roadblocks, and bad things happen.

It's really that simple.

Unless you're in an ivory tower spouting "the way things SHOULD be!" in which case the proponent thinks you can chip away at human initiative/enthusiasm and still have robust societal progress. Hell, I just wrote that and it STILL makes no sense.

(Report Comment)
Ellis Smith December 12, 2013 | 5:01 a.m.

Michael:

What to me is most important about my 12-11-13, 10:45 am post is that the information cited about the situation at the end of the Union of Union of Soviet SOCIALIST Republics was REAL and DOCUMENTED, not some abstract [expletive deleted] concept. What is, is; what has been, has been.

What "will be" is largely or at least partially unknown. But as the saying goes, to ignore history is to be forced to relive it. Don't know about everyone else, but I really don't want my family and friends to relive the 20th Century.

PS: While health care in the Soviet Union was going on the rocks, the party faithful and their families and friends enjoyed excellent health care. "All animals are created equal, but some animals are more equal than others." - "Animal Farm" (Orwell) So much for workers' paradise.

(Report Comment)

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