Low-wage jobs unexpectedly a way of life for many
|
| FILE
- In this Sunday, Nov. 13, 2005, file photo, customers at a Wal-Mart
store head to the checkout lines past a worker with the company's motto
on the back of her vest, in Salt Lake City. With fewer middle-income
jobs available, low-wage work is becoming a dead-end for more Wal-Mart
employees. |
WASHINGTON
(AP) -- For years, many Americans followed a simple career path: Land an
entry-level job. Accept a modest wage. Gain skills. Leave eventually
for a better-paying job.
The workers
benefited, and so did lower-wage retailers such as Wal-Mart: When its
staffers left for better-paying jobs, they could spend more at its
stores. And the U.S. economy gained, too, because more consumer spending
fueled growth.
Not so much anymore. Since the
Great Recession began in late 2007, that path has narrowed because many
of the next-tier jobs no longer exist. That means more lower-wage
workers have to stay put. The resulting bottleneck is helping widen a
gap between the richest Americans and everyone else.
"Some
people took those jobs because they were the only ones available and
haven't been able to figure out how to move out of that," Bill Simon,
CEO of Wal-Mart U.S., acknowledged in an interview with The Associated
Press.
If Wal-Mart employees "can go to
another company and another job and make more money and develop, they'll
be better," Simon explained. "It'll be better for the economy. It'll be
better for us as a business, to be quite honest, because they'll
continue to advance in their economic life."
Yet
for now, the lower-wage jobs once seen as stepping stones are
increasingly being held for longer periods by older, better-educated,
more experienced workers.
The trend extends
well beyond Wal-Mart, the nation's largest employer, and is
reverberating across the U.S. economy. It's partly why average
inflation-adjusted income has declined 9 percent for the bottom 40
percent of households since 2007, even as incomes for the top 5 percent
now slightly exceed where they were when the recession began late that
year, according to the Census Bureau.
Research
shows that occupations that once helped elevate people from the minimum
wage into the middle class have disappeared during the past three
recessions dating to 1991.
One such category
includes bookkeepers and executive secretaries, with average wages of
$16.54 an hour, according to the Labor Department. Since the mid-1980s,
the economy has shed these middle-income jobs - a trend that's become
more pronounced with the recoveries that have followed each subsequent
recession, according to research by Henry Siu, an economist at the
University of British Columbia, and Duke University economist Nir
Jaimovich.
That leaves many workers remaining
in jobs as cashiers earning an average of $9.79 an hour, or in retail
sales at roughly $10.50 - jobs that used to be entry points to
higher-paying work. Hourly pay at Wal-Mart averages $8.90, according to
the site Glassdoor.com. (Wal-Mart disputes that figure; it says its pay
for hourly workers averages $11.83.)
Since the
Great Recession began, the share of U.S workers employed by the retail
and restaurant sector has risen from 16.5 percent to 17.1 percent.
"It really has contributed to this widening of inequality," Siu said.
The
shift has injected new pressures into the economy. Older and
better-educated retail and fast food workers have become more vocal in
pressing for raises. Labor unions helped launch protests last year
against such employers as Wal-Mart, McDonald's and Burger King.
Fewer
teenagers are staffing cash registers, prepping meals or stocking
shelves, according to government data. Replacing them are adults, many
of whom are struggling with the burdens of college debt or child
rearing. Some are on the verge of what was once envisioned as retirement
years.
They are people like Richard Wilson,
27, in Chicago. More than 2 1/2 years ago, a Wal-Mart store manager
spotted Wilson cleaning the cafeteria at Liberty University in
Lynchburg, Va.
A double major in biblical
studies and business communications, Wilson had $3,000 in tuition due
and had maxed out on student loans. He said the recruiter suggested that
a management job could eventually be within reach for him because,
"Wal-Mart is where people's dreams become a reality."
Wilson
first worked at a Wal-Mart near college before returning to his Chicago
hometown without a degree but with $50,000 in student debt and another
job at a boutique Wal-Mart specializing in groceries.
Today,
Wilson earns $9.45 an hour at that Wal-Mart and lives on the city's
western edge with his grandmother. He boards a bus most mornings at 3:30
a.m. and arrives for his 5 a.m. shift in the more upscale neighborhood
of Lakeview East. He has applied for promotions. So far, no success.
If he had the money for a ring and a wedding, Wilson said he would propose to his girlfriend.
Last
year, 17.4 million Americans between ages 25 and 64 earned less than
$10.10 an hour, the minimum wage proposed by President Barack Obama (The
current federal minimum is $7.25.) That's equal to an income of nearly
$19,000 for a full-time employee - less than half the median pay of a
U.S. worker.
The share of Americans in their
prime earning years who earn the equivalent of $10.10 an hour or less,
adjusted for inflation, has risen to 13.4 percent from 10.4 percent in
1979, according to government data analyzed by John Schmitt, a senior
economist at the progressive Center for Economic and Policy Research.
Nearly
a third of low-wage employees last year had had some college education.
An additional 10 percent had graduated. By contrast, in 1979 less than
25 percent of low-wage employees had college experience. Most had not
completed high school. For millions of lower-wage workers, more
schooling hasn't led to higher pay.
"Where you start out in terms of wages helps to predict where you move over time," Schmitt said.
That
principle has become an alarming reality for many. Only 5.5 percent of
people with jobs at the fast food chain Wendy's will earn more than
$70,000 in today's dollars at that company, based on a review last year
of 8 million resumes by the analytics firm Bright.com.
Just
8 percent of Home Depot employees will be so fortunate. For Macy's, 9.4
percent. By contrast, more than a quarter of Amazon staffers will
exceed $70,000 a year. The ratio is even better for Verizon and AT&T
workers. A majority of Ford employees will achieve that income at least
once in their career. Just 10 percent of Wal-Mart workers will.
Wal-Mart
promotes itself as a source of opportunity, and in some cases, that's
proved true. Over 11 years, for example, Tonya Jones rose from staffing a
checkout line to managing a section of a Wal-Mart supercenter in
Hendersonville, Tenn. Jones, 41, said her pay exceeds $15 an hour -
enough with scholarships, including one from Wal-Mart, to help put her
daughter through college.
Asked whether she represents an average Wal-Mart worker, Jones said opportunities at the company boil down to personal choices.
"I want to be No. 1," she said. "I am very competitive."
That
said, the data show why it's harder now for workers to rise into
higher-paying fields despite an economic recovery now nearly 5 years
old. About 1.9 million office and administrative support jobs were lost
to the Great Recession, according to government data. That includes
714,370 executive secretaries with annual incomes averaging $50,220. And
252,240 fewer bookkeepers with average incomes of $36,640.
By
comparison, the number of lower-wage jobs increased: The Labor
Department says restaurants added 777,800 jobs since the recession
began, general merchandise stores 345,600.
"You
see adults moving into these relatively generic services (jobs) that
don't require expertise, just dexterity, attention and showing up," said
MIT economist David Autor. "You want people to be in jobs that have
good trajectories. I can imagine you only get so efficient as a checkout
clerk or a stocker."
Wal-Mart customer
service manager Janet Sparks of Baker, La., trained as a bookkeeper. She
owned a video rental store and worked for an accountant, a nuclear
power plant, a McDonald's and a bank before joining Wal-Mart about eight
years ago.
Sparks, 53, said Wal-Mart once
offered a path to the middle class with merit raises of up to $2 an
hour. The company ended those raises, while making more employees
eligible for bonuses based on a store's overall performance. It also
introduced what's called "optimal scheduling" to match employees with
expected sales. It can mean that workers whose shift ended at 11 p.m.
might have to begin their next shift at 7 a.m., Sparks said.
Sparks
said the erratic schedule makes it hard for employees to earn
additional income from a second job. She joined Wal-Mart in 2005 with
the expectation that the since-cancelled merit pay raises would
eventually let her clear $21 an hour. She instead received smaller
raises and now earns $12.40.
Wal-Mart said it
began to change its bonus system in 2006. It now pays bonuses of up to
$2,500 to some employees based on their store's performance.
And
it says its scheduling system considers the preferences and
availability of employees and gives them three weeks' notice of their
work calendars.
Other retailers have also
adopted optimal scheduling. Starbucks was sued by a former employee over
its system, according to Massachusetts court records. Starbucks said on
its corporate site that the "goal" of optimal scheduling "was to
provide the most working hours to those partners who were available to
do so."
Retail industry executives argue that
stronger economic growth would make it possible to pay higher wages.
The
economy grew just 1.9 percent last year, well below its post-World War
II average of 3.2 percent.
"For generations of
Americans, it was an entry-level wage that got you into a position in
which you could gain skills and experience and then get connected to the
workforce and move up," said Matthew Shay, CEO of the National Retail
Federation. "The problem now is the economy is not growing rapidly
enough to create those other opportunities."
Simon's
suggestion that many Wal-Mart employees might be better off leaving for
other jobs surprised Wal-Mart cashier Joanna Lopez. A 26-year-old
single mother, she owns no car and lives with her church pastor near
Fremont, Calif. She collects food stamps and receives insurance through
California's version of Medicaid.
Lopez
started at Wal-Mart as a temp in August 2011, after being unable to land
a hospital job with her associate's degree. Her pay has risen from $8
an hour to $9.20, after she moved from part time to full time.
The
suggestion by a Wal-Mart executive that some employees might be staying
too long offended her.
"To me, that's an utter
humiliation," Lopez said. "How can you sit there and have management
say that we should find other jobs because this place is `no bueno?'"
Wal-Mart
spokeswoman Katie Cody said that its employees have "endless
opportunities for advancement" and that "management is not saying that
people should find other jobs."
"But when the
economy is doing well, people tend to move around more," Cody said. "If
people were moving around more, that would be a better indicator that
the economy is doing well, which is good for our customers, our
associates and our business."
