Defining “Working Poor”

by Michele on December 3, 2012

When I read Robert Reich’s blog last week, I was trying to decide what to write about.   The more I read about the inequity in food and retail firms like McDonald’s and Walmart it became clear. If I am to call this blog “Inspired by Dorothy ,“ I have to support issues she would have participated in.

I am quite sure she would have been one of the first on the lines to help organize workers in these companies.Dorothy collecting workers

Reich’s  article explains why the workers need to organize but also why they are afraid to do so.  As he says “8 dollars an hour is better than no dollars an hour.”  Workers are struggling hard and the thought of losing what little they have is a big deterrent to standing up.

Here is one fact from the column: “the percent of Americans living below the poverty line has been increasing even as the economy has started to recover — from 12.3 percent in 2006 to 15 percent in 2011. More than 46 million Americans now live below the poverty line.”  That is a lot of people!

Most of those people have jobs, Reich says, and now I see the faces of the “working poor.    When you are bringing home the minimum wage today, you cannot feed even half a family for a week, on that, much less pay for health care or meet the rent payments.

I believe that we have to help in any way we can to change this situation – write letters, make calls, rally friends and demonstrate for better pay and benefits for these workers who have jobs and are so under paid. They only want a bit of what their CEO’s are taking away — many millions of dollars in one year. Let’s start the conversation in homes and offices.  One employee in a store front demonstration — on a positive note —  said, “We have a common interest in making this great company better.”

In whatever way we can, we need to be that “option for the poor” that our faith leaders preach.  They cannot do it alone. Let’s see what we can do in our own county and state; maybe we can help bring some pressure to bear on the corporations’ top management, and get Washington’s attention too.

I didn’t take part in the demonstration in front of Wal-Mart on Black Friday but it got my attention and my in- tention is to be at the next one.

{ 8 comments… read them below or add one }

Carol Henderson December 3, 2012 at 5:35 pm

Thanks for this piece Michele. I thought of the obscenely high salaries CEOs are paid. Check this out below.
Carol

CEOs at top companies earned 380 times the average worker’s income in 2011
byLaura ClawsonFollowforDaily Kos Labor

The AFL-CIO has released its CEO Paywatch with 2011 data. (Note: This was in April 2012). So how do CEOs stack up against ordinary workers? Well, the average CEO of a company on the S&P 500 Index earned 380 times the average American worker’s wage, with average CEO pay having increased 13.9 percent in 2011.

The highest-paid CEO in the country was Apple’s Timothy Cook, whose total compensation was nearly $378 million. That’s more than 11,000 times the average worker’s income of $34,053. The 100th highest-paid CEO, Heinz’s W.R. Johnson, had total compensation of more than $18 million, 543 times the average worker’s income.

What we can’t know is how much CEOs make compared with the workers in their own companies; however, that’s something the Dodd-Frank Wall Street reform bill will soon require companies to disclose. And it turns out it might well be good for companies if transparency pushed them to bring CEO pay a little more in line with average worker pay:

High CEO-to-worker pay ratios can reduce the performance of companies. Academic research has found that steep pay disparities hurt employee morale and productivity. Extreme disparities between CEO and employee pay also have been shown to result in a significant deterioration in the quality of products produced.
In companies where CEO compensation is disproportionately high compared with that of other employees, CEO-to-worker pay disparities can cause high employee turnover and lower job satisfaction. Another study found that firms with high levels of CEO pay relative to other top executives also reduce performance.

Those results are in sharp contrast to the current corporate wisdom self-interested myth that CEOs are worth every penny, that these pay levels represent meritocracy and that lower-paid CEOs would mean companies being less effectively run. But you have only to compare current CEO-to-average worker pay levels to those in the past to see that there just might be a decent argument for doing things differently.

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Michele Michele December 3, 2012 at 7:44 pm

I sometimes have to pinch myself to know we are not living at the time of the original “robber barons”. Thanks Carol

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marianna crane December 3, 2012 at 10:21 pm

Thanks, Michele for reminding us how far the lower and middle classes have NOT come and encourage those of us who are not living below poverty level to feel some responsibility to help correct the inadequacies. I will be alert to actions I can take to make a difference.

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Michele Michele December 3, 2012 at 11:30 pm

This is a great response Marianna — thanks!

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vintagekaren December 5, 2012 at 5:33 pm

Michelle, you have to wonder how some of these CEOs sleep at night!

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Peter Stein December 6, 2012 at 4:14 pm

Really important area of inequality–the gap between rich and poor has continues from Dorothy’s days of activism to today. I believe the gap between the top and bottom in the USA leads to world–what a record of shame!!

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Peter Stein December 6, 2012 at 4:15 pm

see above comment

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Dana Lichty December 12, 2012 at 12:08 am

You are so right! Trying to keep this issue in front of people is very important. Thanks for blogging so eloquently about it.

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