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It’s not necessarily bad to be poor
I don’t say that because poverty used to be a virtue (and, as far as I’m concerned, still is) but because the definition of poor depends to a large extent who’s counting what. If people don’t report their income to the tax man, there’s no way for our government to know how much or little they earn, unless somebody who’s holding a lot of unearned income for them files a report. Most of the country is still on the honor system. Which is, of course, why a whole lot of banksters got away with cooking the books.
But, that’s neither here nor there. What I’ve been interested in is when some of our brilliant economists are going to follow up on the work of that Austrian fellow, Friederich Schneider who
pegged the U.S. shadow economy at 4 percent of GDP in 1970 and 9 percent in 2000. Others have concluded that the informal economy has been growing at a rate of 5 to 6 percent a year since the early 1990s — faster than the “regular” economy.
That’s a quote from the online magazine Salon, which, lo and behold, is announcing a regular series of articles on the “shadow” or “underground” economy, perhaps because some fellow out in California disputes the Austrian as to the cause of the growth (up to $1.4 trillion by now?).
What’s really going on, says Joassart, is that there has been “a restructuring of the economy which, in order to promote flexibility and global competitiveness, has led to greater reliance on part-time and contingent labor.”
“This includes a large informal sector made up primarily of lower-skilled workers who are required to work (such as former welfare recipients) and immigrants who have limited protections,” he says. “I would argue that it is a deregulation of the economy, including a decline in welfare programs and an increase in free trade and global competition, that has led to an increase in informal work in industrialized nations.”
OK. So, people aren’t getting paid as much and they’re taking whatever they can get any which way. But, what I want to point out is the typical lingo of the economist. “Flexibility and global competitiveness” are to blame for people not getting paid enough to hold body and soul together; not corporate employers who can’t resist cheating workers out of what their labor earns. To Salon’s credit, the article does provide a link to a recent study which provides some first-hand evidence for how poverty is spread. For example:
* Almost 30 percent of the L.A. workers sampled were paid less than the minimum wage in the work week preceding the survey, a higher violation rate than in New York City, but with no statistically significant difference from Chicago.
* Among all L.A. respondents, 21.3 percent worked more than forty hours for a single employer during the previous work week and were therefore at risk for an overtime violation. Over three-fourths (79.2 percent) of these at-risk workers were not paid the legally required overtime rate by their employers.
So, when we read that nationally one in four children is living in poverty and we know that’s despite the fact that both parents are working for a wage, here’s one reason why. But, again, note the verbiage, the people who worked were “at risk for an overtime violation.” The verbiage calls the reader’s attention to the victims and the law. The cheating employers are an after-thought. Sympathy, even compassion, are psychologically satisfying, but they don’t make abused workers whole. Presenting the workers as threatened by “an overtime violation” depersonalizes them, in addition to the deprived situation in which they already find themselves. Might as well be talking about traffic violations.
It is, no doubt, significant that between
“1980 and 2007, the number of minimum wage and overtime inspectors declined by 31 percent.”
However, that doesn’t really account for the fact that 99% of the country’s population has been rendered less affluent in the last three decades and the 1%ers are hoarding whatever cash they don’t send abroad to exploit someone else.
Who’s going to make up the difference when a $16,000 a year wage earner is stiffed $2000 and his health insurance isn’t paid? Right. The other 99% of us. Reducing welfare subsidies is all fine and good, except for the fact that it’s the high rollers who can’t seem to manage without a lot of free labor from a fungible workforce and we get to clean up the mess. Georgia is considering cutting back unemployment compensation because the employers, who mismanaged their assets and couldn’t plan ahead are already stressed. Poor babies.