Latest US Employment Figures Raise Questions Regarding the Harmfulness of Low Wages

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By Jacob Maslow

harvesting and picking strawberries
January 4 2009
Plant City Florida.
Tough economic times force people to work for low wages at manual labor jobs.

As reported here previously, the latest US employment figures show a nice drop in initial jobless claims. It appears, at least as far as payroll numbers are concerned, the US economy is finally on a solid  road to recovery. Layoffs are at their lowest levels. Also, the most recent figures cap several back to back weeks of employment recovery. Still, this is not all unalloyed good news. As I have mentioned, the employment figures are also shadowed by two ominous trends-record low labor force participation and low wage rates. While I’ve already gone into these two issues at length, this post will examine the other side of the low wage debate.

As I have mentioned in a previous post, low wages tend to widen the divide between rich and poor and this is almost always toxic on the political front. Moreover, the trend towards lower wages also tends to erode the middle class since jobs that require experience are also suffering an erosion in pay rates. With all that said, it can also be argued that low wages aren’t necessarily bad. In fact, the fact that more employers are paying people minimum wages should be looked at as a positive sign.
According to this perspective, jobs with the lowest pay rates are gateway jobs that enable people to adopt the proper attitudes and habits that can lead to higher paying jobs in the future. The hope is that once you are in the working world, you will learn what you need to learn and move up. This point of view is based on the tenuous assumption that most jobs that pay minimum wage do have a workable track to higher compensation levels. Sadly, this isn’t always the case. There is such a thing as a ‘dead end’ job where you barely get ‘raises’ that keep up with inflation. You start at the bottom and you stay at the bottom. Moreover, much of the most alarming trends in the continued erosion of wages happen in positions that require experience. It is no surprise, given this trend, that middle class households in the US have experienced an erosion in income since 2008.
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