US: leading the OECD in low-wage workers

Si nous voulons connaître la tendance de notre économie, il faut connaître les mouvements de l’échiquier mondial.

Une décision américaine a une influence sur notre industrie canadienne ou québécoise, des règles de l’OMC influencent notre compétitivité, un G20 qui ne prend aucune décision entrave une saine concurrence, tout est lié.

Nos chers voisins américains, ne pouvant pas attaquer de front le problème de la mondialisation, car leur démocratie est complètement figée par les groupes d’intérêts.

Ils ont tenté de sanctionner 7 fois la Chine, contre la manipulation de leur monnaie et à chaque fois tous les lobbys des multinationales et des financiers l’ont empêché au niveau du Congrès.

Ils ont tenté de négocier au niveau du G20, le problème des déficits commerciaux et d’établir une mécanique qui instaurait des sanctions quand il y a un trop grand déficit commercial, encore là, aucun succès, comme Roubini dit si bien : le G20 est un gros G0, donc aucune décision pour régler le problème de fonds, car chacun tire sa couverte de son bord.

Donc, ce qu’ils font pour réduire le taux de chômage, ils sont en train de faire du dumping social sur le peuple, et bien sûr,  influencent directement notre compétitivité, car ce sont nos voisins directs.

Plus de 28 % de la population travaille sous le seuil de pauvreté, et le seuil de pauvreté aux États-Unis c’est drôlement pauvre, «$22,891 for a single parent with three children.»

Alors, pour essayer de compétitionner avec les pays émergents, ils font du ‘cheap labour’ avec leur peuple, après on se demande pourquoi nos industries se délocalisent vers les États-Unis, nouvelle tendance américaine :

‘Un Chinois made in USA’.


US: leading the OECD in low-wage workers

John Schmitt has a new paper entitled "Low Wage Lessons" in which he says ":

The United States is a Poor Model for Combating Low-wage Work," as illustrated by this chart:

  

Share of Employees  in Low-wage Work, 2009

The issue here can be summed up with this question:

If someone in the U.S. economy is a law-abiding citizen who works full-time for a period of years, can they earn a level of wages that let them afford a slice of middle-class standard of living?

If you are earning $10/hour and working 2,000 hours per year, your annual earnings of $20,000 would put you below the poverty line of $22,891 for a single parent with three children. 

And the problems of low-wage work aren't limited to low wages.

Schmitt writes: "Not only are low-wage workers likely to stay in low-wage jobs from one year to the next, they are also more likely than workers in higher-wage jobs to fall into unemployment or to leave the labor force altogether. ... U.S. labor law offers workers remarkably few protections. U.S. workers, for example, have the lowest level of employment security in the OECD and no legal right to paid vacations, paid sick days, or paid parental leave. ... [M]ore than half (54 percent) of workers in the bottom wage quintile did not have employer-provided health insurance and more than one-third (37 percent) had no health insurance of any kind, private or public."

It's worth noting that labor force participation rates for men aged 16-24 have fallen from 72% in 1990 to 57% in 2010, and for men from 25-54, the labor force participation rate has fallen from 93% in 1990 to 89% in 2010, according to Bureau of Labor Statistic data.  Much of this is due to the low pay available to those with low skill levels

Employees Earning less than Two-thirds of the Median Wage, U.S.

"The United States has the highest share of low-wage work in the OECD countries analyzed here.  Moreover, the incidence of low-wage work in the United States has been rising for at least three decades, from just over 20 percent in 1979 to just under 30 percent in 2010."

Schmitt thinks the reason is the minimum wage level is too low and the EITC isn't structured properly.  He says "the EITC and minimum wage in the United States have been set too low to limit theincidence of low pay, and the minimum wage has been set too low to prevent employers from reaping windfalls from the eligibility structure of the EITC."  He continues with the observation that the low wages themselves are "among the least of the problems facing low wage workers':

U.S. labor law offers workers remarkably few protections.

U.S. workers, for example, have the lowest level of employment security in the OECD and

·         no legal right to paid vacations,

·         paid sick days, or

·         paid parental leave. 

The low level of union coverage in the United States means that contractual obligations generally don’t make up for the lack of legal guarantees.

In the absence of legal or contractual rights, low-wage workers are the least likely to have access to core benefits. ... probably the most critical problem facing low-wage workers is the lack of access  to health care.  Rho and Schmitt estimate that in 2008, more than half (54 percent) of workers in the bottom wage quintile did not have employer-provided health insurance and more than one-third (37 percent) had no health insurance of any kind, private or public.

The 37 percent non-coverage rate for the bottom quintile of wage earners in 2008 was up from 15 percent in 1979.

Taylor concludes "If we wish to build a society and an economy on rewarding work, it is a harsh fact of U.S. labor markets that such a reward is currently not apparent for many."


Examinez, la leçon 4 particulièrement.

Low-wage Lessons

Low-wage LessonsLesson 1: Economic Growth is not a Solution to the  Problem of Low-wage Work

Lesson 2: More “Inclusive” Labor-market Institutions Lead to Lower Levels of Low-wage Work

Lesson 3: The United States is a Poor Model for Combating Low-wage Work

Lesson 3A: The U.S. Minimum Wage is Set Too Low to Reduce the Share of Lowwage Work

Lesson 3B: The Earned Income Tax Credit (EITC) has Contradictory Effects on the  Volume of Low-wage Work and on the Well-being of Low-wage Workers

Lesson 4: Low-wage Work is Not a Clear-cut Stepping Stone to Higher-wage Work

If low-wage work were a short-term state that helped connect labor-market entrants or re-entrants  to longer-term, well-paid employment, high shares of low-wage work would be less of a social  concern. Indeed, if low-wage work facilitated transitions from unemployment to well-paid jobs, countries might want to encourage the creation of a low-wage sector to improve workers’ welfare in  the long term.

Unfortunately, the preponderance of evidence suggests
that low-wage work
is a “sticky” state.

Not  only are low-wage workers likely to stay in low-wage jobs from one year to the next, they are also  more likely than workers in higher-wage jobs to fall into unemployment or to leave the labor force  altogether. From 1995 through 2001, for example, about half or more of low-wage workers in  Denmark, France, Germany, the Netherlands, the United Kingdom, and the United States remained  in low-wage work from one year to the next, and between 8 and 23 percent of low-wage workers left  the workforce year-to-year. Over the same period, between 25 and 41 percent of low-wage workers  in these countries crossed the threshold into higher-paying jobs.

The years 1995 to 2001 were  particularly good for low-wage workers in the United States, with sustained low unemployment and  the most rapid wage growth over the last three decades for workers at the bottom of the wage  distribution. More recent, internationally comparable, data are not available for any of these  countries, but given the general deterioration in world labor markets, these transition probabilities  are likely to be lower now than they were in the boom at the end of the 1990s.

·         Low-wage jobs may not help, and may even hurt, the future labor-market prospects of the workers who hold them.

·         Low-wage jobs, like spells of unemployment, may, for example, be associated with  the erosion of a worker’s accumulated skills. If so, a worker’s long-term earnings potential would be enhanced more by a period of education and training than by working in a low-wage job.

·         Low-wage employment, like an unemployment spell, may also send a signal to potential employers that a  worker has low productivity, reducing the probability that the low-wage worker will move up the pay scale. Based on an analysis of data for the United Kingdom, Stewart, for example, finds that low wage work has “almost as large an adverse effect as unemployment” on low-wage workers’ future  employment prospects.

He concludes: “not all  jobs are ‘good’ jobs, in the sense of improving  future prospects, and ... low-wage jobs typically do not lead on to better things.”

None of this is to suggest that economic policy should not seek to create employment opportunities for less-skilled, less-educated, or less-experienced workers.

The point is that low-wage work does not appear to be a self-correcting problem.

Lesson 5: In the United States, Low Wages are among the  Least of the Problems Facing Low-wage Workers