Full of Employment but Empty in the Wallet

“Full employment equals prosperity” is one of the most venerable equations in American political rhetoric.

Every presidential candidate this year has offered us jobs and more jobs. The Republicans boast of creating 17 million jobs in the last eight years and--until his advisers pointed out that there weren’t enough Americans to fill them--George Bush was promising to bring us 30 million more. Only Michael S. Dukakis, with his zingless slogan, “good jobs at good wages,” seems to have noticed that the word jobs alone no longer spells good times.

But no one is really grappling with the fundamental new reality: that if jobs are supposed to cure poverty and bring comfort to the hard-working, then, sadly, jobs no longer work.

While our political rhetoric still lingers in the 1930s or ‘40s, the America of the 1980s is fast becoming a low-wage economy. Conservatives have resisted this diagnosis tooth and nail, but the evidence keeps piling in. The latest news--from the Democratic staff of the Senate Budget Committee--is that one-half of the new jobs generated since 1979 paid a year-round, full-time equivalent of less than $11,611, which is just about equal to the current, officially defined poverty level for a family of four.

One result is that 9 million Americans hold jobs and yet are unable to rise above the official poverty level. These people--who are more likely to be women than men, minorities than white--can hardly be cheered by the candidates’ offers of jobs and more jobs. They already have a job, thank you; what they need is money.

But if conservatives have been caught short by the new reality, so have liberals. For more than four decades now, “full employment” has been the two-word economic program of the American left. The idea wasn’t just to keep everybody busy, but to get the law of supply and demand working on the side of the American worker: decrease unemployment and shrink the labor supply--and wages would have to rise. Thus full employment, in the statistical sense, would also mean employment at decent, livable wages.

But things haven’t worked out that way. We’re approaching full employment, or at least the lowest unemployment rates we’ve seen since the 1950s. But the law of supply and demand no longer seems to be in effect. Wages have gone up in a few labor-short patches of the economy, such as banks and suburban fast-food places. But the overall average wage remains stuck at a little over $9 an hour.

The reason the liberal full-employment strategy hasn’t worked is that wages don’t rise automatically when the labor supply shrinks. They rise when workers demand pay increases, generally through the traditional tactics of unionization and collective bargaining. But in recent years employers have fiercely resisted demands for increased wages: They’ve threatened to move to Mexico or Taiwan; they’ve hired fancy law firms to run legal circles around their employees, and in some cases, they’ve resorted to old-fashioned, brass-knuckles, union-busting techniques.

If politicians wanted to bring their rhetoric up to date, they’d have to stop talking about “more jobs” and start talking about how they intend to make the existing jobs worth a person’s time and effort. They could offer to put some teeth back into the National Labor Relations Board, the regulatory agency that is supposed to guarantee workers’ rights to organize, and which has been, for all practical purposes, in a dead faint since 1980. They could get serious about pay equity for women. They could look into all the possible ways--housing subsidies, earned income-tax credits--to supplement the incomes of the working poor.

Unfortunately, while the candidates rail uselessly about “jobs,” current federal policies seem to guarantee that jobs won’t pay. Congress has just declined to raise the minimum wage, which amounts to $6,700 a year, more than $4,000 below the poverty level. And, in a delirium of bipartisan consensus, Congress just passed a welfare “reform” bill that will eventually push 3.3 million more hungry people--mostly single mothers now receiving Aid to Familieswith Dependent Children--into the low-wage end of the labor market. These women are unlikely to find jobs that will lift them out of poverty; in fact, their influx into the labor market will drag wages even lower.

If we don’t do something to reverse the low-wage trend, we’re going to have to do more than revise our political demagoguery. We’re going to have to abandon that “traditional value,” beloved by all parties--the “work ethic.” The American poor are routinely berated for their supposed lack of enthusiasm for work when, in fact, they work very hard for pitifully little reward. But if employers--and government--no longer value work enough to pay for it with a living wage, then why should anyone?