USA: All work, low pay (an Australian's viewpoint) FWD

Tom Boland (
Mon, 8 Feb 1999 05:14:58 -0800 (PST)


Sydney [Australia] Morning Herald - Saturday, December 27, 1997



The deregulated, no-union, zero-employment economy of the United
States is seen by some Australian employers and politicians as a
model. But as ADELE HORIN travelled America, she found the downside
- an army of worn-out, exploited working poor.

"GETTING a job is easy," says Rose Scott. "It's getting the pay you
want that's hard - $7 an hour is the most I've ever made." A small,
blonde, shy woman in her 30s, Scott is talking in the office of the
Adecco Employment Agency in Greenville, South Carolina, where
she has come to get a job.

In Greenville, population 65,000, a Bible-thumping, anti-union town,
the jobless rate is 3.8%, even less than the US national rate of 4.9%.

As Scott says, getting a job is easy. In the booming US economy,
where unemployment is at a 25-year low, crack addicts have jobs,
alcoholics have jobs, and single mothers of newborn babies have
jobs. For an Australian, accustomed to more than a decade's bad
news on the jobs front, the atmosphere is electric.

South Carolina, which only four years ago recorded Australian-style
unemployment rates, has achieved what economists loosely define as
full employment - and other States such as Nebraska, South Dakota
and Wisconsin boast even lower jobless figures.

But having a job in the US does not mean having a living wage.

When Scott's husband left her with three children under eight to
support, she found a job in a convenience store, working the
midnight to 8am shift.

"It paid $6 an hour and I could barely support myself let alone my
children," she says in Adecco's over-bright, no-frills office.

Unable to find overnight child care or feed her children, Scott was
forced to send them to live with her mother 50 kilometres away.

But relinquishing her children was not the only trauma for Scott. An
armed robber held up the convenience store when she was on duty.
Terrified, she resigned the next day, which is what has brought her,
still shell-shocked, into the Adecco employment office.

It isn't long before Adecco's placement officer calls Scott to the desk,
having scanned the computer and found her another job - just like
that. This time, she will be making boxes for a packaging company at
$US7 an hour, starting at 7am.

"I should be able to have my children back in a few months," Scott
says happily as she leaves, clutching complicated directions to her
new workplace. But who, I wonder, will mind her children when she
leaves for work at 6.30am, and how will she afford child care?

AS I travelled around the US, wondering whether Australia should
emulate or beware the US economic model, Rose Scott's pale face
stayed with me. She came to embody the contradictions of this
"economic miracle". America has put its underclass to work.
Virtually everyone not incarcerated - and there are 1.7million of
those - can get a job. But the workers are exhausted. They are
suffering from too much work - 12-hour shifts, seven-day weeks,
60-hour weeks. Compulsory overtime is common. Mothers drag
infants on a succession of early-morning buses for the sake of a
minimum-wage job. Rose Scott works through the night for a
pittance. American families have suffered falling or stagnant incomes
- and declining hourly wages - for more than 20 years.

That's the underside of the US economic miracle - an army of
worn-out, exploited working poor and an embattled middle class
puzzled at the gap between their living standards and the enviable
unemployment rate.

Compared with Australia's, other US indicators look less impressive.
The US has much greater inequality, twice the proportion of working
poor, seven times as many men in jail and a much higher divorce
rate. And US workers are much more likely than Australians to be
retrenched, while feelings of job insecurity, as measured by the
Organisation for Economic Co-operation and Development, are much
more widespread.

Shelters for the homeless are filled with people who have jobs.
"Sixty to 70% of the people we serve are working," Anne Burke
tells me later when I visit Urban Ministries, a charity for
Carolina's homeless and medically uninsured.

"The work is there," she says, "but work is not the solution to the
problem of poverty."

On average, Americans work about a month longer per year than
they used to 20 years ago. But the typical family is still worse off
than its counterpart in 1979. As well, fewer workers in the 1990s are
covered by health insurance and aged pension plans.

And while jobs are easy enough to get, millions are on the road to
downward mobility if they get retrenched. Few are as lucky as Rose
Scott: an average new job pays 15% less than the previous one.

Recently, families have begun to reverse the long decline in median
household income. But since hourly wages have continued to fall, the
only way people have caught up has been through working longer
hours or at multiple jobs or by having more family members work.

When President Bill Clinton boasted at a rally that he had created 11
million jobs, a worker called out, "Yes, and I've got three of them."

When he boasted that most of the new jobs were relatively well paid,
the Economic Policy Institute, a Washington think tank, showed that
30% of America's full-time workers earn poverty-level wages.

When the minimum wage shot up to $US5.15 an hour, or $US10,700
a year, on September1, it meant minimum-wage workers were still
$US2,000 a year worse off in real terms than their counterparts 30
years ago.

High-tech jobs are increasing. But the five occupations with the best
prospects over the next 10 years, according to the US Department of
Labor, are cashier, janitor, shop assistant and waiter. Also, America
can't get enough prison guards. And it seems any American can get
work at Wal-Mart, the downmarket retail colossus that provides one
in every 200 civilian jobs. "About 75% of American families
are caught in an Alice-in-Wonderland world, working enormous
hours but not getting anywhere," says Professor Barry Bluestone, of
the University of Massachusetts, when I meet him in Boston.

In the mid-1980s Bluestone alerted the nation to its "disappearing"
middle class as the rich grew hugely rich, and the poor grew poorer
and more numerous. In the '90s, he is warning about its overworked
and underpaid. At a time when labour should have the upper hand,
the willingness of incumbent workers to work harder and longer has
kept a brake on wage increases. It has also contributed to the highest
rates of after-tax corporate profits in 36 years.

IN A sprawling car parts factory outside Raleigh, North Carolina, I
meet some of the conscripts to the 70-hour week - the tiredest
workers I have ever encountered. Many are required to work bizarre
shifts - 3am to 3pm, for example. Here they are not clamouring for
overtime - they are too frightened to refuse. When I meet Ron,
Lillian, Beth, Stella and union president Iris (this is a union plant,
a rare entity in the Carolinas), at the end of their 12-hour shift, they
flop into chairs in the meeting room as if they will never move again.

Ron has worked 60- to 70-hour weeks for almost three years and
clears $US450. He had worked for the past three weeks without a
single day off - 12 hours on weekdays, 10 hours on Saturday, and
eight on Sunday. On Sunday morning he preaches in church.

"There's no choice," says Ron, a grandfather, hitting 60. "I do it
because the company says we have to. If the supplier goes, we go."

It occurs to me that 130 years ago Ron's forebears were slaves, and
under slavery everyone had a job, too.

But these workers have known worse conditions, and worse
employers. Two of the women previously worked in textile and
apparel factories that have shut down and migrated to Mexico.
250,000 textile jobs in North Carolina have disappeared in a decade.

MANY workers live in fear of getting sick. They have jobs but
increasingly no health insurance, sick pay or other benefits. US
corporations have found ways to evade their traditional obligations.
They get someone else to hire the workers for them.

Employment agencies, like Adecco, where I met Rose Scott, or the
giant Manpower, have become huge hirers of labour on behalf of the
corporations - but with none of the usual obligations. For some
workers their "temporary" status lasts for months or years.

"The perception among workers is that you can't get a job without
starting as a temp through the agencies," says Charles Taylor, of the
Carolina Alliance for Fair Employment.

In the small city of Greenville, alone, he says, the number of
employment agencies specialising in "temporary" workers has
increased from 12 to 60 in less than a decade.

Taylor tells me about a worker called Patricia who used to have a
permanent job as a weaver in a textile mill. When that job ended, she
worked as a "temporary" for two years at the Fluor-Daniel
construction company in Greenville.

Finally Fluor-Daniel put her on permanent staff, gave her a pay
increase, a pension program and health insurance. That arrangement
lasted 18 months before she was laid off.

"Then they hired her back as a temp," Taylor says. "Same desk,
same phone but less hourly pay, no health insurance, no benefits..."

The Tupperware company in Hemingway, South Carolina, laid off
most of its workers and hired them back as temporaries, minus
benefits, through an agency.

Harry Payne, the Labor Commissioner who oversees North
Carolina's employment regulations, had said to me: "If America is so
prosperous, why are its workers so anxious?"

I'm beginning to see why.

Corporations, however, are showered with benefits. In a bidding war
that has been likened to the arms race, States extend extraordinary
subsidies and tax breaks to some of the world's biggest companies.

Alabama even renamed a freeway the Mercedes-Benz Autobahn in
honour of the German car maker, which had deigned to build a plant.
The Government put up more than $US300million in tax breaks and
subsidies for a plant that would employ only 1,500 people - that is,
$US200,000 per job. The deal almost bankrupted the State. Here in
the South Carolina woods, you can find dozens of foreign companies.
Near Spartanburg, the German car maker BMW has established what
is believed to be its first non-union plant in the world. It employs
2,000 workers - under a deal that cost the State Government at least
$US79,000 a job.

A Greenville Chamber of Commerce document highlights the State's
attractions to business: South Carolina has the "second lowest union
representation in the nation", and boasts some of "the nation's
leading [anti] labour law firms".

About 25% of the area's workers earned the minimum wage,
and would gratefully "respond to more rewarding job opportunities".

There are a host of tax credits and subsidies for job-creating
companies. And the State will bear the total cost of training
workers, "even when it involve[s] training in a foreign country".

WHAT can Australia learn from the American experience in creating
a low-unemployment economy? The lessons are not obvious nor
easily transferable. Low wages play a part in the low unemployment
rate. But if low wages were the main reason, Britain, which lacks
any minimum wage, should have even more impressive figures. The
UK's unemployment rate, however, is much higher than the US's, at
about 7% (using comparable figures).

Nor does faster economic growth provide the explanation for low
unemployment. Until recently the Australian economy has grown
faster than that of the US - at 3.5% compared with the
US performance of 2.5%.

Elaine Bernard, executive director of Harvard University's
Trade Union Program, comments: "Australians say, 'If only
we could have America's job machine plus Australia's safety
net'. I always caution people to be careful about what they wish
for - they could end up with the failings of the US and Australia."

If Australia cut wages, it would have to cut its social security
payments, and put time limits on them, too. It might get "good"
unemployment rates. But "bad" poverty. And then again, it might just
get the poverty.


AUSTRALIANS, too, are working longer and harder as competitive
pressures, a hard-nosed management style, and Government policy
push us towards the US model.

Employers and Canberra have run aggressive campaigns against the
ACTU's claim for a "living wage" and against all but minimal safety-
net adjustments to awards for low-waged workers. As well, awards
are being stripped back to cover only 20 basic conditions of work.

Despite the introduction of the 38-hour week, full-time employees in
Australia work more hours than they did a decade ago - on average
41 hours. And compared with 20 years ago, a lot more Australians
work very long hours. In 1996 just under half of male full-time
workers clocked up 45 hours a week or more, compared with 37%
in 1980.

As well, Australians endure more stress, work faster and more
intensively, and put more effort into their jobs than they used to,
according to a Government survey released this year. A quarter of
the workforce feels the balance between work and family has

The American trend towards replacing staff labour with contract
workers has also accelerated here in the first half of the 1990s. And
like Americans, Australians are turning their backs on unions, with
coverage falling from 50% of employees in the 1980s to 31%
now. In the US, however, coverage has fallen to 13p%.

Also, there has been a fundamental shift in attitude to sacking people.
In 1990, 39% of big Australian workplaces had sacked
workers; in 1995 the figure was 60%.

Real wages have fallen for some Australian workers over the past 20
years - the poorest 30% of male workers have gone backwards.
But most other Australian workers, unlike the Americans, have
enjoyed wage increases.

The fundamental difference between Australia and the US has been
our award system. It has meant even the poorest Australian workers
are better off than their American counterparts - getting the
equivalent of $US7.50 to $US8 an hour. Until the recent rise to
$US5.15 an hour, America's low-wage workers received $US4.25.


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