Stuck in the Slow Lane


How Low-Wage Jobs Fail

30 Million Americans

By Beth Shulman

New Press -- 255pp -- $25.95


How Employers Are Reshaping

Opportunity in the Workplace

Edited by Eileen Appelbaum,

Annette Bernhardt, Richard J. Murnane

Russell Sage Foundation -- 535 pp -- $45

American workers have had quite a roller-coaster ride in the past decade as an era of plentiful jobs and fat paychecks gave way to stubborn unemployment and skimpy raises. One thing that didn't change, though, was the mass of very low-wage jobs that are often the only thing open to millions of workers who lack the skills or education needed to get on a career track.

Barbara Ehrenreich's best-seller, Nickel & Dimed, gave a first-person tour of what it's like to be a cashier or bed-changer with slim prospects of making it into the middle class. Now, two more-scholarly books give the numbers behind the anecdotes, showing how subpoverty jobs have become a permanent and growing blight on the U.S. economy. The Betrayal of Work, by former union official Beth Shulman, offers a polemical but accessible portrait of America's 30 million-plus underclass. Low-Wage America, a vast undertaking by 38 economists, sociologists, and other academics, is a surprisingly readable description of what's driving the expansion of dead-end jobs across the economy.

Shulman, a former vice-president of the United Food & Commercial Workers union, which represents supermarket and clerical employees, has gathered an impressive array of studies and statistics on the army of working poor. The security guards, home-health aides, child-care workers, maids, tellers, cooks, and hairdressers she describes earn less than the federal poverty level (currently about $9 an hour for a family of four). While minorities are overrepresented in this group, two-thirds are white. Some 60% are women, and the vast majority are adults -- only 7% are teens. Most lack a college degree. Shulman shows how low-wage workers, in addition to their lousy pay, are more likely than the rest of us to have rigid or late-night work schedules, unsafe working conditions, and inadequate or nonexistent health care.

More troubling are the forces that trap many of these workers in a career cul-de-sac. These are the focus of Low-Wage America, which offers 12 in-depth studies of different industries, from hotels to steelmaking. With funding from the Russell Sage and Rockefeller Foundations, its authors interviewed a total of 1,700 managers and workers at 464 employers and queried 10,000 more via an extensive survey.

The authors show how technology, deregulation, and globalization have prompted employers to compete with one another by slashing labor costs. Neither Low-Wage America nor The Betrayal of Work really explains why these familiar trends have cut so much more sharply against less-skilled workers than against college-educated ones. But since experts have been debating this conundrum for more than a decade with no real conclusion, perhaps both books are right to skip the why and deal directly with the what.

Low-Wage America's most compelling idea: Many low-skilled jobs don't need to pay poverty wages at all. The authors demonstrate this with numerous real-life examples. For instance, an examination of smaller machine and electrical-parts manufacturers in central New York State finds that several pay unskilled new hires $8 to $9 an hour. Most of their rivals in the area, however, offer just $6 to $7. It turns out that the high-road outfits use a different strategy to cope with competition from low-wage countries. They invest in scads of training, use worker-involvement schemes to keep productivity high, and motivate employees with profit-sharing and pay-for-performance bonuses. Although the companies all "face broadly similar market pressure, we find clear and compelling evidence that managers do have discretion in their employment practices and wage policies," the authors say.

One of the book's most surprising findings is that employers who use alternative approaches to compete in low-skilled industries often rely on new labor-market institutions. In industries as diverse as hospitals, hotels, and hosiery, companies band together to train workers, set industry skill standards, and help each other learn how to make strategies such as teamwork really work. Often, local government bodies lend crucial support, with seed money for training and coordination with community colleges. There's a clear role, the book argues, for government to support management choices that help less-skilled workers.

Still, such examples have been scarce in the U.S. in recent years. Unless more employers decide that being competitive doesn't necessarily mean cutting pay as low as it can go, the ranks of low-wage workers will continue to grow.

By Aaron Bernstein

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