Making All Work Pay

Co-editor Fran Quigley reports from Indiana on a human rights issue -- the lack of living wages -- that faces workers across the country.  As Fran describes, some workers are organizing effectively to raise wages across sectors, and some academics see a historic opportunity to reduce the wealth gap, but to date, the impacts are uneven. Writes Fran:

    Not long ago, I was speaking with a woman who works as a housekeeper at a downtown Indianapolis hotel. The job is demanding, and she has done it well for nearly seven years. Yet, even with the occasional tip, she usually earns under ten dollars an hour.

    That amount is far below any estimate of a living wage in our community. Among the many things this worker cannot afford is health insurance. An unexpected medical bill had resulted in the garnishing of her already meager paycheck.

    She does not mind the hard work of scrubbing toilets and changing sheets. She just wants a paycheck she can survive on. "I have always seen housekeeping as a noble profession," she says. "Someday, I want to be one of those moms who can send kids to college and have all the bills paid. Why can't I do that as a housekeeper?"

    It is an important question. And she is not the only one asking it.

    The good news is that the national economy has been steadily adding jobs since the recession ended in 2009. The bad news is that many of the new jobs are in the low-wage service sector. Many of the new jobs pay so poorly that some pundits have taken to using the term “McRecovery.”

     Indiana is an unfortunate example of the trend. A recent report from the Indiana Institute for Working Families points out that our state has been leading the region in adding jobs that pay poverty-level wages.

     But, if we are adding jobs like janitors and dishwashers and cashiers because we need those roles filled in our 21^st century economy, is it inevitable that they be low-paying jobs?

     The answer is no, according to Zeynep Ton, an MIT Sloan School of Management professor. Ton argues in her book, The Good Jobs Strategy: How the Smartest Companies Invest in Employees to Lower Costs and Boost Profits, that service-oriented businesses benefit by paying good wages to their workers. Costco is often held up as a shining example of this phenomenon. But every community, including Indianapolis, has plenty of locally-owned businesses proving the same point. They pay their workers a living wage, and reap a skilled, stable workforce in return.

    The famed urban studies academic and writer Richard Florida sees an historical opportunity in such arrangements, saying that the upgrading of U.S. low-wage service jobs can follow the 20^th century path of manufacturing jobs becoming more secure, better-paying work. Former U.S. Secretary of Labor Robert Reich echoes the point, saying that our country’s growing wealth gap can be addressed by better pay in service occupations that are resistant to global competition and labor-replacing technologies.

    There are multiple ways to achieve that goal. Manufacturing workers in the early 20^th century improved their jobs in large part due to unionization. That can work for service sector employees, too.

    In just the past few years, food service workers at IUPUI, Butler University, Marian University, and the Indianapolis International Airport have all raised their wages by banding together to join the union UNITE HERE. Security guards and janitors here are doing the same through the Service Employees International Union (SEIU). Research shows that unionization in the service sector raises wages and increases access to benefits.

      A more sweeping solution is to decouple health insurance from employment, and the Affordable Care Act is an important step in that direction. The most direct answer is to raise the minimum wage, which has already been accomplished in over 140 communities across the country. Raise the Wage Indiana coalition members are organizing around this issue across our state, and President Obama and Congressional Democrats are pushing hard for a federal increase.

     Americans in general, and Hoosiers in particular, are justifiably proud of the role that our collective work ethic has played in the development of our communities.  But that legacy is in jeopardy if the only jobs available do not offer wages that are sufficient to make ends meet. For those of our neighbors who are working long hours cooking and cleaning and keeping us safe, it is time to make all work pay a living wage.

 

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