Low Wages, High Wages And Nothing In-Between?

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Last week’s national minimum wage bump to $6.55 an hour didn’t affect New Yorkers who were already earning a higher $7.15 minimum set by the state. But the extra income does little for those who had been earning the previous federal minimum of $5.85 an hour – or the 6.1 million residents of New York state who are struggling to cover the skyrocketing prices of milk, bread and gas with low wages.

Today, nearly one-third of all Americans are trying to make ends meet on low wages. And the number of low-wage jobs – primarily service jobs in hotels, food prep, home health care and office cleaning – is growing. In the next decade, 5 million new jobs will pay poverty-level wages unless something is done.

Valentino Stronza, a security officer working at a Midtown office building owned by the Paramount Group, lives this struggle daily. He’s doing his best to make ends meet, but earning only $10 an hour from Apollo Security isn’t enough for him to provide the home he wants his son to have. To keep costs down, he and his son share a bedroom in his sister’s apartment. He works overnight three days a week trying to put money aside so he and his son can move into their own place, but so far, the extra money has gone to paying off past medical expenses.

Valentino’s not alone – according to Mayor Bloomberg’s new poverty measurement, nearly one in four New Yorkers lives in poverty. Despite working hard to create better futures for their families, they are making little headway in an economy that’s producing low-wage jobs like there’s no tomorrow.

At the same time, this past year marked the fifth straight year in which the number of millionaires in our country grew – now at 10 million. The top 1 percent of households take home 21.8 percent of all income – more than double the 9 percent rate of 30 years ago. This is the highest concentration of income in the hands of the wealthiest 1 percent since 1928, a year before the great stock market crash.

At no time in our history has the disparity in income been so wide and in no other industrialized country does the disparity come close. CEO compensation is more than 400 times the take-home pay of an average American worker. For an industrialized country, there is no parallel to this growing income divide between the highest- and lowest-paid workers. Corporate executives in England make half as much as those in America, while the lowest-paid workers there earn a higher wage than their American counterparts.

As we look toward the upcoming election, which will put the fate of our country in new hands, we must demand national policies to change the direction of our economy. Pegging the minimum wage to a percentage of median income would raise it and then keep the lowest paid workers on pace with future increases of the rest of the workforce. Expanding the Earned Income Tax Credit – a cost that would be offset by closing tax loopholes for the very wealthy – would also help those low-income families teetering on the brink of poverty.

Locally, a citywide policy requiring publicly financed development projects to pay prevailing wages and benefits to the workers who build and maintain the sites would ensure that newly created jobs provide what New York families need to get by. At Willets Point and Greenpoint-Williamsburg developments where these provisions have already been set in motion, hundreds of good jobs will be created for working New Yorkers.

Aside from government action, companies, particularly those benefiting from tax breaks, must raise pay in low-wage industries if we are to make an immediate and wide-scale impact on poverty. Government programs alone will fall short of the mark, and unions have shown they can work with business responsibly to bring low-wage workers out of poverty.

In New York, low-wage union workers make 16 percent more in wages than their non-union counterparts and are 25 percent more likely to get employer-paid health care and a pension. But joining a union can be hard for many workers who fear employer retribution. Federal passage of the Employee Free Choice Act, a bipartisan bill which would create a more neutral environment for workers to decide on union membership, would help low-wage workers join a union and get the raises they need.

Americans have long held to the notion that having a job means you can make ends meet. But unless steps are taken to address the growing imbalance in our economy, we could wake up one day in a city of just the very rich and the working poor.

– Mike Fishman

Mike Fishman is president of SEIU Local 32BJ, with more than 100,000 members, including 70,000 in New York City, making it the largest private sector union on the East Coast.

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