wages

Why Low Wages are Far From Good News

Anne Thompson — Tue, 19 Jul 2011 11:38:38 -0400

The Austin American-Statesman ran an op-ed Saturday under the head-spinning headline ”Low Texas Wages are Mostly Good News.” No joke.

American-Statesman staff writers Lori Taylor and Heather Gregory noted that Texas had the highest percentage of low-wage workers in the country in 2009 and 2010: more than a half a million workers in the state made the federal minimum wage or less. In this tough economy where so many Americans are struggling to provide their families with housing, food, education and health care, how is that good news?

Taylor and Gregory argue that Texas has a higher percentage of low-wage workers primarily because it is cheaper to live in Texas. “The biggest reason why Texas is a low-wage state,” they write, “is that we have a relatively low cost of living.” As a result, the authors argue that low-wages are sufficient for Texas workers and not a cause to worry.

Yet while Texas may have a lower cost of living than other states, the federal minimum wage is so woefully low and out-of-date that Texas workers making minimum wage are still mired in poverty. The federal minimum wage is $7.25 an hour, or roughly $15,000 a year for full-time work. That is more than $7,000 below the official poverty line for a family of four, and even farther below what a family requires to meet basic needs. The notion that $15,000 is enough to raise a family in any state in this nation is absurd.

But according to Taylor and Gregory, these low wages are acceptable to Texans, otherwise they would not be taking such poorly paid jobs. They write “Research demonstrates that workers are generally willing to accept lower wages in locations — like Texas — where the cost of living is low and there are local amenities that make it a desirable place to live.” According to the authors, it’s not that companies are offering lower wages and workers have little bargaining power to negotiate a better wage—it’s that workers willingly accepting lower pay because they don’t need higher wages.

Yet more than one in six Texans—or 17.2 percent of state residents— lived in poverty in Texas in 2009. That’s the 8th highest rate in the country. Mississippi, which tied Texas in 2010 for having the highest percentage of minimum wage workers, had the highest poverty rate in the nation in 2009. Texas also has the nation’s highest percentage of residents without health insurance; in 2009, more than one in four Texans had no health coverage.

Another reason that Taylor and Gregory say that lower wages in Texas are not a cause for concern is that the workforce is younger than in other states, and young workers’ wages will increase with age. They write, “Nationally, teenagers are five times more likely to earn the minimum wage than are hourly workers over the age of 25, and Texas has a lot of teenagers.” However, Census data show that teens make up an even smaller portion of wage earners in Texas than they do nationwide: nationally 4.1 percent of working people are teens while 4.05 percent of wage earners in Texas are teens. . In fact, it’s not a greater percentage of working teens that are driving low wages in Texas. That makes sense, because we know that while teens are more likely to make minimum wage, more than three quarters of minimum wage earners in the U.S. are adults over the age of 20. Contrary to stereotypes, the overwhelming majority of low-wage workers are adults who contribute a substantial portion of their households’ incomes.

Stepping back to look at the stalled economic recovery, the fact that low wages could be regarded as good news is stunning. As David Leonhardt detailed over the weekend, the main factor preventing an economic comeback is anemic consumer demand. With the bursting of the housing bubble and the disappearance of easy credit, wages play an even bigger role in spurring spending. The downward pressure on wages caused by the economic crisis make a stronger minimum wage even more important—both because even more families are depending on it, and because it is the floor for other wages across the bottom of the labor market.

As the below graph from the Bureau of Labor Statistics demonstrates, the number of Texans making at or below federal minimum wage has shot up since the recession. The number of jobs paying at or below the federal minimum wage in Texas increased by 76,000 in 2010.

With the disappearance of higher paying jobs, more and more families are depending on low-wage jobs to get by. A growing proportion of workers making minimum wage or near-minimum wage will make it harder for Main Street to recover from the severe economic hit they have already taken. This is anything but good news.

Anne Thompson is a Policy Analyst at the National Employment Law Project.

TV Appearance: A Little Buzz Kill About Jobs Numbers, Hedge Fund Billionaires, and Other Econ Stuff

Richard Eskow — Fri, 01 Apr 2011 21:58:57 -0400

I think Alonya was suggesting at the end that I was being a downer about those job figures ... I believe the current slang term for that kind of thing is "buzz kill." Oh, well!

For a change, all of the political negativity coming from my general vicinity was directed at Republicans - and only Republicans.

(This was last-minute, hence the unshaven look.)

About that "unshaven" look: I asked a personal question about it on my own blog - one that's far too trivial to diminish these august pages.

Jobs Crisis In Real World ... Just Not In DC

Dave Johnson — Thu, 03 Feb 2011 08:30:54 -0500

Who is our economy for? Who is our government for? For 30 years we have been undergoing a transition from "We, the People" democratic government to a plutocracy run by and for the wealthy. One indicator of this transition is the way the DC Elite respond to unemployment. 9-10% unemployment used to be a national emergency. Now it's a yawn.

What The Washington Paper Says

The Washington Post has a front-page story, Why does Fresno have thousands of job openings - and high unemployment? that says the problem is really "structural," a skills gap, and there is little we can do. This is significant because so many people who make policy read the Washington Post while sitting in their nice, expensive restaurants. Stories like this risk that they will think that there really are plenty of jobs out there, but the serfs just aren’t up to taking them, or are too spoiled, but in any event there is no problem that needs solving, and call the lobbyist because this month’s check is late.

Meanwhile, anyone in the real world outside of Washington or Wall Street, reading about “thousands” of job openings going unfilled immediately knows something is fishy. In fact, if this story ran on the front page outside of DC or Wall Street we might even need to worry about Egypt-style riots. Anyone on the same side of the continent as Fresno knows that there are not “thousands’ of unfilled job openings. There might be thousands of foreclosures, or thousands of people in food lines, or thousands of people whose unemployment has run out but there are not thousands of unfilled job openings.

What The Local Paper Says

The Fresno Bee has a different story to tell, EDITORIAL: President should come see impact of joblessness in Valley:

The economy may be improving, but it would be difficult to persuade the thousands of out-of-work Valley residents that things are looking up.

The six Valley communities cited in a U.S. Labor Department report have unemployment rates that run from 16.4% in Hanford-Corcoran to 18.6% in Merced. The other Valley cities on the list are Fresno (16.9%), Visalia-Porterville (16.8%), Modesto (17.2%) and Stockton (17.5%).

. . . The nation's economic recovery will not be complete until Americans go back to work. At every level of government, the goal should be to implement policies that improve consumer confidence and encourage businesses to hire workers.

The Fresno Want Ads

The Fresno Bee help-wanted ads tell the story.

There are 963 “Sales” jobs listed, but the first 519 of those are at the same "company," called “Work At Home Jobs, Inc.” and are mostly the same "job," if you can call it that. The next 136 are a different "company" and the "jobs" are calling people from home to sell them wireless cell service – on commission. The next 52 are the same deal but a different "company," selling internet from home, on commission. The next 46, same story. Etc.

The next category after Sales is “Business development”, with 691 jobs, 466 are “work at home” and many of the rest are the same jobs at the same companies as the “sales” jobs. The next two categories are "General Business" and "Other" and, again, list the same "jobs" at the same "companies." The next category is "Business Opportunity." I challenge you to guess what "companies" and "jobs" are listed. (Hint: it's the same ones again.)

Supply And Demand

Among the few specifics in the story is the example of "Jain Irrigation, which cannot find all the workers it wants for $15-an-hour jobs running expensive machinery that spins out precision irrigation tubing at 600 feet a minute, 24 hours a day, seven days a week."

$15-an-hour is just above the poverty level for a family of four, at about 130%.

Dean Baker, writing in, The Problem of Structrual Unemployment: Really Incompetent Managers, makes the point that a company complaining they can’t find skilled workers at $15 an hour needs to think about raising their offer. Baker writes,

It presents comments from one employer who complains that he can't find workers for jobs that pay $15 an hour. This is not a very good wage. It would be difficult for someone to support themselves and their children on a job paying $15 an hour ($30,000 a year). If the company president understand economics, then he would raise wages enough so that the jobs were attractive to workers who have the necessary skills.

If they can't get workers, they should know that they need to bump up the wage offered until they can. That is about as basic as it gets in the supply/demand equation.

Can't Sell The House And Move

Part of this problem is the housing market. If Fresno really doesn’t have the skilled workers businesses need, Silicon Valley and Las Vegas certainly do, and have very high unemployment rates, but the people there can’t sell their houses and move! And even if they could sell they are "underwater," will come out of the sale owing a ton of money that they can't make up by taking a $15-per-hour job!

Externalizing Training Costs

Companies expect workers to already be trained, “externalizing” one more cost onto local communities, while shopping for the lowest tax areas to locate.

California has a budget crisis and is cutting back on funding for the community colleges and other programs where people are trained for jobs. One reason for the budget crisis is businesses demanding ever-lower taxes, or playing communities and states against each other for tax incentives to relocate, using property tax avoidance schemes and so many other ways to get out of paying something back to the public for the public investment that enabled them to prosper.

The Real Problem

Out here in the real world the real problem is not "structural," it is that there just are not enough jobs, they don't pay enough, "free trade" deals have lowered wages and undermined our manufacturing base, there is not enough demand in the economy and the government is not doing its job of picking up the slack and after 30 years of tax-cutting the infrastructure is crumbling and not supporting competitiveness for our businesses.

There are millions of unemployed and millions of infrastructure jobs that need doing. There is a new green energy and manufacturing revolution going on in the world and we do not have an economic/industrial policy to capture our share. There is problem after problem that is not being addressed by a government captured by interests.

DC Avoids Dealing With The Problem

It seems that the DC Elite will do anything to avoid just seeing what is in front of their faces.

Clearly we have lost jobs from trade deals, Wall Street financialization and domination, lack of investment in infrastructure and education, etc. But the DC Elite come up with a thousand reasons not to fix these because the interests that benefit from those deals have influence over them. Our budget deficit is obviously from tax cuts and military spending – but you will never, ever, ever, ever hear that. Instead we hear job-killing "austerity" solutions that avoid asking the wealthy few to pitch in.

On one issue after another, the DC Elite provide cover for the wealthy elite interests who now control DC. The transition from We, the People democracy to a plutocracy of, by and for the wealthy few is nearly complete.

The real problem is not a breakdown of the structure of the job market and is not a mismatch between the jobs and the skills, it is a lack of jobs because of lack of demand, and a mismatch between who our government and economy are supposed to work for, and the interests that have brought this about.

March 10 Summit on Jobs and America's Future

On March 10, 2011, the Summit on Jobs and America’s Future will bring together leaders and activists who understand that America faces a jobs crisis – and who are committed to building a political movement for sustainable economic growth, dynamic job creation, and a revival of the American economy.

It's free, $15 if you want lunch. Beat that.

To Lift The Economy, Lift Wages

Dave Johnson — Thu, 09 Sep 2010 14:17:56 -0400

To lift the economy, we have to lift wages. Increased wages will restore demand. The changes that will increase wages will help restore democracy.

The social contract used to be that citizens in our democracy share the benefits of our economy through increased wages that come from increases in productivity. This broke down and working people's incomes have been stagnant since the Reagan Revolution. (Yes, I'm telling the same story again. It needs to be told, over and over so people can understand what is happening to us. We are feeling the effects of the Reagan Revolution coming home to roost.)

Reagan and the conservatives weakened the government and broke the unions. Government and organized labor were the forces in our society that had stood up for the interests of regular people against the "moneyed interests" and weakening them fundamentally changed the fairness equation of our economy. After the Reagan Revolution working people's share of the benefits from increased productivity turned down:

All of the benefits of improvements in our economy now flow to a few at the top. This results in intense concentration of wealth:

With more and more of the income and wealth going to a top few, We, the People are thought of less and less as citizens and more and more as "the help." But who is our economy for, anyway? Our economy can operate for the benefit of We, the People, or it can operate for the benefit of a wealthy few at the expense of the rest of us. This is the ongoing battle. And history has shown over and over that when economies operate for the few, they don't work.

This is not just about sharing the economy, it is about sharing the decision-making power. In our form of government We, the People are supposed to make the decisions. When Reagan said, "Government is the problem" he was really saying that decision-making by We, the People is a bad thing. When conservatives complain about "big government" they are complaining about We, the People having a big share in decision-making. When they call for "less government" they are calling for less of a share of the decisions-making by us. This means the wealthy and powerful have more of a share -- of everything.

With the income, wealth and benefits of the economy increasingly flowing to a top few, working families tried to compensate for the loss in various ways. Women entered the workforce. Former Labor Secretary Robert Reich explains, "By the late 1990s, more than 60 percent of mothers with young children worked outside the home (in 1966, only 24 percent did)." (Please read his whole post if you have time.)

Then, still not getting by on stagnant wages with rising prices, people worked more hours or added second jobs. Then they started using up their savings.

Finally they resorted to adding debt.

This all finally broke down, demand slowed, and the economy has slowed to a crawl. The 90s financialization and "dot com" bubbles obscured the way things were headed, and then the housing bubble of the 2000s continued the illusion. But debt just kept rising people kept working longer and harder to get by, while the richest few kept getting richer. Finally it all crashed and current attempts to prop it up by helping the wealthy and big businesses are not succeeding. Bailing out big banks and their executives and shareholders and not holding anyone accountable, while letting predatory corporations continue their economy-draining practices has not only kept the worst parts of the "share of the wealth" problem in place, it has undermined people's faith in government and demcoracy. Changes need to be made.

Most people pay for things with income from jobs. If we want demand to rise, then we need to raise incomes. But things are still going in the wrong direction. As CAF's Robert Borosage writes today,

"Over the last decade, we lost one in three manufacturing jobs. Inequality reached Gilded Age extremes. CEOs and bankers pocketed million dollar bonuses while cooking the books and gambling on exotic securities, inflating the housing bubble until it burst. Health insurance companies kept a strangle hold on a health care system that costs twice as much as those in other industrial countries, leaves millions uninsured and provides worse health care."

Who Gets What For What?

This bad economy situation is going to drag on until we make real changes in the structure of who gets what for what in this country. Every incentive in the economy is to try to reduce wages, cut benefits and eliminate jobs. Think about that. People get bonuses and raises and owners get richer if they eliminate YOUR job or at least cut back your pay and benefits. For example, by replacing a worker with a machine, the owner of the machine gets more money, the worker gets nothing. But in the larger economy each time this happens it means there are fewer people in a position to buy whatever goods or services the same companies that eliminated the jobs are in business to provide. And it means that a few wealthy people become more wealthy and powerful.

This is where government comes in. Government is supposed to be the force that speaks for and protects the interests of the people, empowers people through education and rules, set conditions to keep wages high, lay down the infrastructure in which businesses thrive, and coordinates the international competition for industries and jobs. But the Reagan Revolution broke that. We need to restore it.

There are so many things that government could be doing to get the economy working again for working people, small and medium businesses and big corporations that want to make an honest living. Boost the minimum wage, modernize the infrastructure, provide health care, provide free education through graduate level, increase Social Security, help unions organize, impose a democracy tariff so imports don't get around the protections provided by our democracy, and return to taxing the rich who reap the dividends and payout of all the past investment that We, the People made to make business thrive.

And there are larger structural changes we can make. Just brainstorming but what if workers replaced by machines directly got some of the income generated by the machine. Workers laid off this way several times might then have enough income to get by without working! Or what if we cut the workweek from 40 hours to, say, 35 before overtime kicks in. Maybe that would increase hiring, while giving regular people more leisure time. (And keep cutting the workweek as machines and computers do more of the work.)

And, of course, to have wages at all people have to have jobs. One would think this would go without saying but these days it seems there is a need to point out that people are hurting for jobs, because the DC elite seem to have moved on from that. We badly need government programs to directly hire people to do things that help the people of the country. We would have all of this if the Reagan Revolution hadn't weakened government of, by and for We, the People.

Other posts in the Reagan Revolution Home To Roost series:

Tax Cuts Are Theft
Reagan Revolution Home To Roost -- In Charts
Reagan Revolution Home To Roost: America Drowning In Debt
Reagan Revolution Home To Roost: America Is Crumbling
Finance, Mine, Oil & Debt Disasters: THIS Is Deregulation

See the Reagan Revolution Home To Roost series.

Pressure On Wages As Well As Jobs

Dave Johnson — Thu, 01 Apr 2010 14:39:48 -0400

Our economy is not structured to produce enough jobs. Tomorrow's jobs report is expected to show as many as 200,000 jobs created in March, but a lot of that is temporary Census hires, and even 200,000 jobs created is still 2-300,000 fewer jobs than number of new entrants into the job market each month! So even a "good" report of 200,000 will be just another "economy still getting worse more slowly" story.

We need jobs, jobs, jobs and jobs, and we need them to pay people enough.

It's not just trade pressures that are keeping job growth from occurring, but trade pressures are a very big and very immediate part of the problem. Fixing the trade imbalances will be a great start and will give us a small bit of breathing room in which we will hopefully address larger structural problems.

Those trade pressures are not just destroying jobs, they are destroying wages and benefits, too. It's the way of the world; a business owner can't help but look at the legacy wages that built up and up and up during the competitive good times, and wonder why they're still paying those high wages during the bad times. If you have a company full of people making $80,000 or $100,000 and you see people accepting work in similar positions for $40,000 you are going to wonder how to reduce the amount you are paying people. One way is to make them work more for the same pay.

In yesterday's Washington Post, Holding back job growth? Workers' awesome output,

One of the great surprises of the economic downturn that began 27 months ago is this: Businesses are producing only 3 percent fewer goods and services than they were at the end of 2007, yet Americans are working nearly 10 percent fewer hours because of a mix of layoffs and cutbacks in the workweek.

That means high-level gains in productivity -- which in the long run is the key to a higher standard of living but in the short run contributes to sky-high unemployment. So long as employers can squeeze dramatically higher output from every worker, they won't need to hire again despite the growing economy.

[. . .] Fearful of losing their jobs, people seem to have become more willing to stretch themselves to the limit to get more done in any given hour of work. And they have been tolerant of furloughs and cutbacks in hours, which in better times would drive them to find a new employer. This has given companies the leeway to cut back without the fear of losing valuable employees for good.

It's not "awesome output" it is workers being squeezed to death. And it's the way our system is designed.

In Fixing Jobs: Normal Isn’t An Option I wrote that the way our current system is structured employers have every incentive to figure out how to eliminate your job or at least cut your pay,

The core of what needs to be restructured is that we have a system where people with power and wealth benefit when they figure out how to cause other people to receive lower pay and benefits -- or just lose their jobs. The incentives come down to this: if someone can figure out how to cut your pay and benefits or just get rid of you (“eliminate your position”) they get to pocket what you were making, and you get nothing. If you don't own the company you're out of luck.

Returning to "normal" is not an option now and it just isn't going to happen. We have hit the wall of the old economic paradigm. We need to start looking at new models for a sustainable, people-friendly economy that works for all of us, not just a lucky few.

Danger: Falling Middle Class

Tula Connell — Fri, 05 Feb 2010 09:06:52 -0500

Jack Cafferty at CNN this week asked viewers one of his seemingly routine questions. But the responses to: "How has definition of 'middle-class American' changed?" reveal a cataclysmic shift in our nation's economic identity.

Gary from El Centro, Calif., summed up the vast majority of the nearly 200 responses when he replied:

You should ask this question of the three or four people in the country still remaining in the middle class.

The comments reflect more than the run-of-the-mill griping about taxes or middle-aged discontent. They demonstrate a visceral understanding of the deep forces underlying the dramatic change that in recent decades has eroded the solid financial footing of America's working families—America's middle class.

In short, the American public knows what most lawmakers in Washington and policymakers around the country have yet to figure out: The nation is losing its middle-class backbone and bifurcating into a have/have not country.

As Karen from Idaho Falls writes on Cafferty's site:

In my world, there is no middle class–only the very rich, the rich, the poor, and the very poor. Most of us are hanging on to being "poor" by our fingernails and hoping that we won't join the ever growing "very poor" class. Somewhere along the line, "middle class" disappeared.

The not-so-Great Recession is just the latest and loudest part of the long decline of the middle class. From the end of World War II to the early 1970s, wages grew along with productivity. But since then, wages have been stagnant or declining—while productivity skyrocketed. The decline in a family's earning power was offset by the entrance of vast numbers of women in the labor market—and then by wage-earners holding multiple jobs. By the late 1990s, debt—from second mortgages or credit cards—kept the middle class afloat. And now what is revealed is a middle class held together by nothing more than string.

One of the most consequential but least recognized aspects of the current economic disaster is the growing length of time workers are without jobs. In December, the average jobless worker had been unemployed for 29.1 weeks. In contrast, when the recession began in 2007, the average unemployed person had been out of work for 16.5 weeks.

At Economix blog, Catherine Rampell points out in an tellingly titled post, "A Growing Underclass," that the longer unemployed workers stay out of work, the less likely they may be to find work.

First, their skills may deteriorate or become obsolete—especially if they are in a dynamically changing industry like high technology.

Second, the stigma—both internal and external—of their unemployment grows. Studies have linked job loss to declines in self-worth and self-esteem, meaning these people will probably make less compelling job candidates.

So, even if there were jobs available—there are now more than six unemployed workers for every one job—getting one becomes harder and harder the longer you're out of work. Jobs are so few, in fact, even a weekly columnist at Forbes had this to say:

For many, many Americans there are no jobs and few prospects. For them the Great Recession is not a cute aphorism but a major cataclysm.

Long-term joblessness is one more nail in the middle class coffin. As Working-Class Perspectives describes it:

Unlike in past business cycles, the middle class has not been able to recover so far, despite increases in productivity and stock prices. In “America Without a Middle Class,” Elizabeth Warren documents how the de facto unemployment rate, credit debt, “underwater” mortgages, increased use of food stamps, personal bankruptcies, and the loss of pensions and health care have all dramatically increased. Middle-class households have depleted their savings and are increasingly accruing debt to pay for college, health care, and other expenses.

Some experts believe that the decline in jobs will only continue. For example, Alexandra Levit predicts significant losses in a number of key industries between 2008 and 2018: semiconductor manufacturing (33.7 percent), apparel manufacturing (57 percent), newspaper publishers (24.8 percent)….Corporations are moving many of these jobs offshore or replacing them with technology rather than paying middle-class wages and benefits. The economists are right that new jobs are being created in place of these. But as Jack Metzgar discussed last week, most of the new jobs offer even lower wages and benefits and require less education.

Jobs are offshored while the jobs that remain in the United States are low-wage, with little affordable health care or retirement options. Meanwhile, the smooth of face and soft of hand financial wizards who turn their noses up at the industrial manufacturing sector fail to realize that when the United States loses its ability to make things, it also loses the research and development power that fueled the nation to greatness. And it loses something a lot more. Louis Uchitelle interviews Sen. Sherrod Brown (D-Ohio) about the humiliation of building a new World Trade Center with no glass made in the United States:

“Imagine China,” he said in an interview, “building a huge structure intended to be an important national symbol and importing glass from the United States to build it. There is no way the Chinese would do that.”

And a low-wage job nation fuels income inequality. This from a stunning report by economist John Schmit at the Center for Economic and Policy Research:

From a peak just before the 1929 stock market crash through the early 1950s, wage and income inequality, broadly measured, were declining. From the early 1950s through the late 1970s, inequality was flat, or even falling slightly. Since the late 1970s, however, inequality has skyrocketed, climbing back to levels last seen in the 1920s. In 1979, for example, the top one percent of all U.S. taxpayers received about 8 percent of national income; by 2007, the top one percent received over 18 percent. If we include income from capital gains in the calculation, the increase in inequality is even sharper, with the top one percent capturing 10 percent of all income in 1979, but over 23 percent in 2007.

Back at Cafferty's site, Chad from Los Angeles knows why:

The middle class has turned into the "peasant class." We have been taken over by a few wealthy people who control our politicians and government. We have become an Aristocracy. Except the ones in control are not royalty, they are businessmen hiding behind a cloak of deception that is Corporate America.

In the short term, critical steps must be taken for immediate relief. The first is getting the Senate to extend unemployment insurance (UI) for the long-term unemployed. As usual, the House already has acted, extending UI in December, while senators dither. (Click here to tell your lawmakers it’s time to act.) Extending UI is part of the jobs initiative the AFL-CIO is pushing for immediate relief for jobless workers.

But before the current crisis fades, the nation must begin to reverse the more than 40-year trend in which the gap widens between rich and poor and the middle class falls out of the bottom.

Silas from Boston—a city not unfamiliar with fomenting revolutions—offers an intriguing insight:

We've allowed the "upper" class to become too big to fail. As a result, the middle class is an endangered species which has to bail out the class that got us into this mess to begin with. This is how the French Revolution started.

This is a cross-post from the Firedoglake blog.

The Wrong Recovery

Eric Lotke — Wed, 16 Dec 2009 09:45:01 -0500

Things are supposed to be looking up. Today’s data from the Bureau of Economic Analysis gives a fuller picture: low wages and declining domestic production.

Real average hourly earnings fell 0.5 percent from October to November, seasonally adjusted

The U.S. current-account deficit— the combined balance on trade in goods and services increased to $108 billion in the third quarter of 2009, up from $98 billion in the second quarter. The main driver was the deficit in goods. With the economy beginning to “recover” people started buying again – sending more of our money overseas.

This isn't recovery. This is putting us back onto the same wrong path we had before – a low wage economy supported by trade deficits and foreign borrowing. No, thank you. I hope.

Broken Dreams and Cookie Crumbs

Tula Connell — Fri, 29 May 2009 09:25:57 -0400

When Brynwood Partners in 2006 took over the Stella D'oro factory in the Bronx, the Wall Street private equity firm had every reason to believe it would be easy to slash the wages, pensions, holidays and sick pay of the 136 bakery workers.

But the takeover brainos forgot one important fact: The workers are represented by a union, Local 50 of the Bakery, Confectionery, Tobacco Workers and Grain Millers (BCTGM). And throughout their more than nine-month strike, the workers have been strongly supported by their union brothers and sisters and by members of the community as they walk the picket line every day outside the plant where Brynwood now employs strikebreakers.

The saga of Stella is part of an all-too-familiar story of what has become our American Dream—a Dream deflated, bust and broken by unfettered corporate greed. Originally a family-owned firm, Stella was acquired by RJR Nabisco, then taken over by Kraft when RJR Nabisco broke up (in the wake of the disastrous KKR leveraged buyout). Stella was run into the ground by its corporate overseers, then dumped to private equity earlier this decade when Kraft began to dispose of "non-core" assets under pressure from Wall Street.

Generations of New Yorkers grew up with and loved Stella D'oro cookies, once an iconic, national, premium Italian-style biscuit brand.

Vicky has 28 years on the job baking those cookies. She began work at Stella D'oro at age 20. Now she has no paycheck coming in nor any health benefits. Vicky and her co-workers walk the strike lines at West 237th and Broadway every day, defying corporate chieftains who, after the union contract expired July 31, 2008, demanded reduced wages, four fewer paid holidays and workers shell out an additional $1.32 per hour for health insurance.

Imagine the equity guys having to sweat over $1.32 an hour. If only.

Every day is another hardship for the workers on the picket line. A month into the strike, they already were talking among themselves about their fading American Dream. This from the Riverdale Press:

On Sept. 11, nearly a month since the 24-hour picket outside of the Kingsbridge factory began, striking workers sat on lawn chairs underneath their usual blue tarp and an American flag.

It was a day fraught with symbolism, as workers struggled to make sense of the stark contrast between the patriotism they felt on the anniversary of that tragic day and the American dream they say is slipping away from them.

The bakery workers have been joined on the picket lines by nurses, staff at the City University of New York, textile workers and many others, with New York State Teachers Union recently presenting the workers with $2,500 for their strike fund. The workers have taken their struggle to the luxurious offices of Brynwood Partners in Greenwich, Conn., and to the home of Brynwood Partners and Stella D'oro Chairman Hendrik Hartong III, son of Henk Hartong Jr., former Pittston coal CEO and Brynwood founder.

If you're in New York, stop by the picket lines or take part in a rally and march this Saturday, May 30. The group is assembling at noon at the Target on West 225 Street, one block east of #1 Station and will march to Stella D'oro factory at 237 Street/Broadway.

Either way, you can take action to support the striking workers by sending an e-mail to Henk Hartong and Brynwood Partners at huppsv@brynwoodpartners.com or info@brynwoodpartners.com. Tell them to go back to the bargaining table and negotiate a fair agreement to preserve the living standards of their loyal employees.

Solidarity is what has enabled the workers to withstand these long months without pay or health care. Solidarity is what will enable them to win.

Women's Wages Less Than Men

Armand Biroonak — Thu, 09 Oct 2008 00:00:00 -0400

Women earn 78 cents for every dollar earned by men. Over the course of her career, the typical working woman loses almost a quarter of a million dollars in wages.

Professional Women Earn Less Than Male Counterparts

Armand Biroonak — Thu, 09 Oct 2008 00:00:00 -0400

Women with advanced degrees or careers in high-paying fields can earn less than $ 2 million over their working lives compared to similar male counterparts.