Income Inequality and Service Jobs

So I’m watching an episode of CNN’s series Inside Man. This particular episode is about unions. There’s a section covering income inequality where it points out that since 1973, the average American worker’s income has gone up about 6% (adjusted for inflation, one assumes), while the average CEO income has gone up by 726%. The show also pointed out that about 90% of new jobs created since the recession have been service industry.

Now I’m going to depart slightly from most of my friends on the left. I don’t think either of these are necessarily bad things. I have no real problem with CEOs earning an insane amount of money, nor with 90% of jobs being service jobs. But there is a slight problem that I do have with this.

Extreme differences in income is acceptable only if the people on the lower-end of that income are able to live good, decent, healthy lives with access to toys, tech and teaching (ok…education…but I wanted a third “t”!). Now most lower-income people in this country actually come to close to that. Very few people starve to death, for example, and with the expansion of Medicaid and Obamacare, most people are able to get health insurance even if they’re poor. And they can usually afford to have a computer, even if it’s a bit old, a cell phone, even if it isn’t smart, and a TV, even if it isn’t HD.

However! Lower-income people are still usually only a paycheck away from a shitstorm of trouble. You’re supposed to only spend 1/3 of your income or less on housing. That’s seldom the case for lower-income people. It certainly isn’t the case for me. If you’re spending 50%+ of your income on rent, that doesn’t leave you much of a margin for error, especially if you have kids.

This is why something like a higher minimum wage is important. If a CEO of a company I work for is making three times the amount per day that I earn in a year, I’m fine with that, as long as I’m earning enough to cover my expenses, have some savings, have some benefits and have something left over. I don’t require that I earn what he does (though it would be nice); just that I earn a fair wage. Even if that job is a service industry job (as my current one is), I should be making a fair, living wage.

And that’s where this all falls apart, because these days, that often isn’t the case. Wal-Mart pays its employees very, very poorly. It varies depending on the market, but we can generally assume it isn’t a living wage in most places. They don’t have to do this. According to that same episode of Inside Man, if Wal-Mart paid their employees an average of twelve dollars an hour, and passed 100% of that cost to their customers, it would cost the average consumer about $12.50 per year. By contrast, Cost-Co pays its employees fairly well and still manages to have low prices.

The problem in this country isn’t income inequality. The problem is that the rich have basically everything and the poor have very little in the way of things like security. Paycheck-to-paycheck isn’t a fun way to live, and while I don’t think we need to pass laws to make everyone rich, we do need to do some basic correction and, among other things, raise the minimum wage. It’s just sense.


3 Responses to “Income Inequality and Service Jobs”

  1. arthurthepanther Says:

    I think the conversation has focused too much thus far in America on the amount of money paid. Minimum wages are a good and necesary thing, but they don’t solve the problem of buying power/basic needs inequity. I don’t think the whole capitalist structure needs to come down (I like architecture too much to ever live in a grey brick communist paradise 😛 ). However, I think the government does need to step in; perhaps by fixing a maximum rent per occupancy at a given percentage of an individual income (maybe with vouchers or lessor reimbursement for occupancies filled by children). Or something. My idea has some seriously gaping holes. But SOMETHING that is automatically adjusted for prevailing wage, allows for a free(ish) market, and ensures that noone pays over a third of their income for a place to be when they have to shut their eyes.

  2. arthurthepanther Says:

    in other words I heartily agree with you, and also you made me think. ^^

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