44% Of American Workers Make $18,000 Year or Less

Donald Trump continues to brag about how great the United States economy is. He bases that on the low official unemployment figures and GDP growth (which is actually rather tepid).

If you are in the top 10% (and especially in the top 1%), then you might believe him. Those people are enjoying rising wages (mainly because they are hogging almost all of the nation's rising productivity).

But for may workers, the phrase "great economy" is little more than a sick joke. About 44% of American workers earn $18,000 a year, or less. And 20%-25% of workers earn minimum wage, or less. And these are not part-time workers. They are full-time workers making a poverty wage.

A great economy would not have 44% of workers making a poverty wage. A great economy would have all workers making a livable wage.

The following is part of an interview Marc Steiner at therealnews.com had with economist and author Richard Wolff (pictured above). Wolff is Professor Emeritus of Economics at the University of Massachusetts (Amherst) and the New School University.

MARC STEINER: Let’s just begin. What are these? What does the 44% really mean when you see 44% of American workers making $18,000 or less a year and we’re crowing about full employment. Let’s talk about the reality of what American citizens actually face in this economy, this full employment economy.

RICHARD WOLFF: Well, to analyze an economy or even to analyze employment and unemployment in an economy is a little bit like going to the doctor and asking the doctor to analyze your health. If the doctor simply put a thermometer in your mouth and said, “Well, you’ve got 98.6. You’re wonderful. You’re in healthy shape.”, you’d quickly find another doctor because you never point to one or two indices to determine someone’s health. You do a whole battery of tests. You do x-rays and blood tests and all of that. It’s the same with an economy. What Mr. Trump is doing is pointing to one of the very few statistics that look good, and that does look good.

A low unemployment rate is a good thing, but you have to look at other variables, and you’ve yourself just pointed to some of them. It’s one thing to be employed. It’s better than unemployed, but suppose you’re making $10 or $20 or $25,000 a year in today’s economy, you’re a poor person. We count you as a poor person, because the quality of life you can enjoy on that basis is pinched in every way. You can’t promise your children the American dream because you’re not earning it. We now actually have a measure. If Mr. Trump were honest, he would tell us that measure. It’s called the Job Quality Index; it’s prepared at Cornell University by a battery of specialists who study this. And they show, over the last 10 or 15 years, a steady decline in what they call the quality of the job.

Here’s what it means: it pays less than it used to, it has fewer benefits to go along with it than it used to, and it is much less secure than it used to be. Which means you have temporary layoffs, you have odd hours, you often don’t know when you’re going to work, and exactly what you’re going to get paid, for doing exactly what. All of those things are now worse than they were before. Mr. Trump can’t mention it because it gives a whole new dimension to what he wants, which is to push one of the only statistics that he can point to that isn’t in fact, quite grim. It is sleazy politics, and he’s a practitioner of nothing less.

MARC STEINER: And there’s the reality here also… I was reading an article in Axios, some articles about the gig economy and how we don’t take this into account in terms of what these mean for employment, unemployment. So many people in that economy, A) are making low wages. B) they are working part time or they’re temporary workers. Yet, it’s distorted. People are writing how this distorts the actual employment numbers because our economy is changing in the 21st century and we’re still using 20th century definitions.

RICHARD WOLFF: Yeah. But here’s what’s not changing: the desire of employers to get workers at the lowest possible cost, the whole shift from a regularly employed worker to the so-called gig economy or the sharing economy, and there are other fancy phrases. Those are nasty kinds of euphemisms. The truth of it is, if you’re a contract worker, then you don’t have to be given the benefits that regular employees are entitled to. You don’t have to be given the steady work that they’re entitled to. You become more and more at the beck and call of the employer. That’s good for the employer, who can make sure not to pay you unless they are actually getting exactly what they want from you. But it’s not good for the worker, which is why workers fought for so long in American history to have precisely the job protections that the gig economy gets the employer out of.

So yes, it not only disguises unemployment as if it were employment, but it is a part of the deterioration of the American economy. Look, working people don’t just want a job instead of unemployment. That’s like saying they would like to have a crust of bread rather than nothing. Yes, that’s true. But the American working class would like to be able to have a decent life, a healthy life, and give decent education to their children and all the rest. That is being taken away from them, which is part of why you get the anger and the bitterness that is so obvious across the political spectrum. . . .

MARC STEINER: We see that wage growth is stagnating. It’s not rising with these employment rates. That’s clear.

RICHARD WOLFF: Yes. It’s amazing. In the past we used to teach in economics that if the labor market gets very tight, that is unemployment is low, well, it gives a bargaining chip to the worker. It isn’t so easy for an employer to find someone else. So the worker, the theory goes, is in a better position to get a higher wage for himself or herself. That’s a very lovely story, but it doesn’t take into account where we are right now. We are in the 10th year after the second worst crash of capitalism in the system’s history. The worst was the 1930s, and 2008 is the second worst. What’s happened now is that people have run out of all of the backstop that they had after that crash.

They’ve run out of their unemployment compensation. If the family, they are part of had some savings, they’ve run out of those. They’ve tapped their friends and relatives for loans. They’ve come to the end of the line, and they’re so desperate now, they’ll take any job. That’s why the unemployment is low, because you’ve converted a large part of our working class into literal desperadoes who are in the position of taking a job with few benefits, no security, and crappy wages.