When the market fails to distribute some vital commodity, such as housing, to all who require it, the usual liberal-to-moderate expectation is that the government will step in and help. We accept this principle—at least in a halfhearted and faltering way—in the case of health care, where government offers Medicare to the elderly, Medicaid to the desperately poor, and various state programs to the children of the merely very poor. But in the case of housing, the extreme upward skewing of the market has been accompanied by a cowardly public sector retreat from responsibility. Expenditures on public housing have fallen since the 1980s, and the expansion of public rental subsidies came to a halt in the mid-1990s. At the same time, housing subsidies for home owners—who tend to be far more affluent than renters—have remained at their usual munificent levels. It did not escape my attention, as a temporarily low-income person, that the housing subsidy I normally receive in my real life—over $20,000 a year in the form of a mortgage-interest deduction—would have allowed a truly low-income family to live in relative splendor. Had this amount been available to me in monthly installments in Minneapolis, I could have moved into one of those “executive” condos with sauna, health club, and pool.
But if rents are exquisitely sensitive to market forces, wages clearly are not. Every city where I worked in the course of this project was experiencing what local businesspeople defined as a “labor shortage”—commented on in the local press and revealed by the ubiquitous signs saying “Now Hiring” or, more imperiously, “We Are Now Accepting Applications.” Yet wages for people near the bottom of the labor market remain fairly flat, even “stagnant.” “Certainly,” the New York Times reported in March 2000, “inflationary wage gains are not evident in national wage statistics.”2 Federal Reserve chief Alan Greenspan, who spends much of his time anxiously scanning the horizon for the slightest hint of such “inflationary” gains, was pleased to inform Congress in July 2000 that the forecast seemed largely trouble-free. He went so far as to suggest that the economic laws linking low unemployment to wage increases may no longer be operative, which is a little like saying that the law of supply and demand has been repealed.3 Some economists argue that the apparent paradox rests on an illusion: there is no real “labor shortage,” only a shortage of people willing to work at the wages currently being offered.4 You might as well talk about a “Lexus shortage”—which there is, in a sense, for anyone unwilling to pay $40,000 for a car.
In fact, wages have risen, or did rise, anyway, between 1996 and 1999. When I called around to various economists in the summer of 2000 and complained about the inadequacy of the wages available to entry-level workers, this was their first response: “But wages are going up!” According to the Economic Policy Institute, the poorest 10 percent of American workers saw their wages rise from $5.49 an hour (in 1999 dollars) in 1996 to $6.05 in 1999. Moving up the socioeconomic ladder, the next 10 percent–sized slice of Americans—which is roughly where I found myself as a low-wage worker—went from $6.80 an hour in 1996 to $7.35 in 1999.5
Obviously we have one of those debates over whether the glass is half empty or half full; the increases that seem to have mollified many economists do not seem so impressive to me. To put the wage gains of the past four years in somewhat dismal perspective: they have not been sufficient to bring low-wage workers up to the amounts they were earning twenty-seven years ago, in 1973. In the first quarter of 2000, the poorest 10 percent of workers were earning only 91 percent of what they earned in the distant era of Watergate and disco music. Furthermore, of all workers, the poorest have made the least progress back to their 1973 wage levels. Relatively well-off workers in the eighth decile, or 10 percent–sized slice, where earnings are about $20 an hour, are now making 106.6 percent of what they earned in 1973. When I persisted in my carping to the economists, they generally backed down a bit, conceding that while wages at the bottom are going up, they’re not going up very briskly. Lawrence Michel at the Economic Policy Institute, who had at the beginning of our conversation taken the half-full perspective, heightened the mystery when he observed that productivity—to which wages are theoretically tied—has been rising at such a healthy clip that “workers should be getting much more.”6
The most obvious reason why they’re not is that employers resist wage increases with every trick they can think of and every ounce of strength they can summon. I had an opportunity to query one of my own employers on this subject in Maine. You may remember the time when Ted, my boss at The Maids, drove me about forty minutes to a house where I was needed to reinforce a shorthanded team. In the course of complaining about his hard lot in life, he avowed that he could double his business overnight if only he could find enough reliable workers. As politely as possible, I asked him why he didn’t just raise the pay. The question seemed to slide right off him. We offer “mothers’ hours,” he told me, meaning that the work-day was supposedly over at three—as if to say, “With a benefit like that, how could anybody complain about wages?”
In fact, I suspect that the free breakfast he provided us represented the only concession to the labor shortage that he was prepared to make. Similarly, the Wal-Mart where I worked was offering free doughnuts once a week to any employees who could arrange to take their breaks while the supply lasted. As Louis Uchitelle has reported in the New York Times, many employers will offer almost anything—free meals, subsidized transportation, store discounts—rather than raise wages. The reason for this, in the words of one employer, is that such extras “can be shed more easily” than wage increases when changes in the market seem to make them unnecessary.7 In the same spirit, automobile manufacturers would rather offer their customers cash rebates than reduced prices; the advantage of the rebate is that it seems like a gift and can be withdrawn without explanation.
But the resistance of employers only raises a second and ultimately more intractable question: Why isn’t this resistance met by more effective counterpressure from the workers themselves? In evading and warding off wage increases, employers are of course behaving in an economically rational fashion; their business isn’t to make their employees more comfortable and secure but to maximize the bottom line. So why don’t employees behave in an equally rational fashion, demanding higher wages of their employers or seeking out better-paying jobs? The assumption behind the law of supply and demand, as it applies to labor, is that workers will sort themselves out as effectively as marbles on an inclined plane—gravitating to the better-paying jobs and either leaving the recalcitrant employers behind or forcing them to up the pay. “Economic man,” that great abstraction of economic science, is supposed to do whatever it takes, within certain limits, to maximize his economic advantage.
I was baffled, initially, by what seemed like a certain lack of get-up-and-go on the part of my fellow workers. Why didn’t they just leave for a better-paying job, as I did when I moved from the Hearthside to Jerry’s? Part of the answer is that actual humans experience a little more “friction” than marbles do, and the poorer they are, the more constrained their mobility usually is. Low-wage people who don’t have cars are often dependent on a relative who is willing to drop them off and pick them up again each day, sometimes on a route that includes the babysitter’s house or the child care center. Change your place of work and you may be confronted with an impossible topographical problem to solve, or at least a reluctant driver to persuade. Some of my coworkers, in Minneapolis as well as Key West, rode bikes to work, and this clearly limited their geographical range. For those who do possess cars, there is still the problem of gas prices, not to mention the general hassle, which is of course far more onerous for the carless, of getting around to fill out applications, to be interviewed, to take drug tests. I have mentioned, too, the general reluctance to exchange the devil you know for one that you don’t know, even when the latter is tempting you with a better wage-benefit package. At each new job, you have to start all over, clueless and friendless.
There is another way that low-income workers differ fro
m “economic man.” For the laws of economics to work, the “players” need to be well informed about their options. The ideal case—and I’ve read that the technology for this is just around the corner—would be the consumer whose Palm Pilot displays the menu and prices for every restaurant or store he or she passes. Even without such technological assistance, affluent job hunters expect to study the salary-benefit packages offered by their potential employers, watch the financial news to find out if these packages are in line with those being offered in other regions or fields, and probably do a little bargaining before taking a job.
But there are no Palm Pilots, cable channels, or Web sites to advise the low-wage job seeker. She has only the help-wanted signs and the want ads to go on, and most of these coyly refrain from mentioning numbers. So information about who earns what and where has to travel by word of mouth, and for inexplicable cultural reasons, this is a very slow and unreliable route. Twin Cities job market analyst Kristine Jacobs pinpoints what she calls the “money taboo” as a major factor preventing workers from optimizing their earnings. “There’s a code of silence surrounding issues related to individuals’ earnings,” she told me. “We confess everything else in our society—sex, crime, illness. But no one wants to reveal what they earn or how they got it. The money taboo is the one thing that employers can always count on.”8 I suspect that this “taboo” operates most effectively among the lowest-paid people, because, in a society that endlessly celebrates its dot-com billionaires and centimillionaire athletes, $7 or even $10 an hour can feel like a mark of innate inferiority. So you may or may not find out that, say, the Target down the road is paying better than Wal-Mart, even if you have a sister-in-law working there.
Employers, of course, do little to encourage the economic literacy of their workers. They may exhort potential customers to “Compare Our Prices!” but they’re not eager to have workers do the same with wages. I have mentioned the way the hiring process seems designed, in some cases, to prevent any discussion or even disclosure of wages—whisking the applicant from interview to orientation before the crass subject of money can be raised. Some employers go further; instead of relying on the informal “money taboo” to keep workers from discussing and comparing wages, they specifically enjoin workers from doing so. The New York Times recently reported on several lawsuits brought by employees who had allegedly been fired for breaking this rule—a woman, for example, who asked for higher pay after learning from her male coworkers that she was being paid considerably less than they were for the very same work. The National Labor Relations Act of 1935 makes it illegal to punish people for revealing their wages to one another, but the practice is likely to persist until rooted out by lawsuits, company by company.9
But if it’s hard for workers to obey The Laws of Economics by examining their options and moving on to better jobs, why don’t more of them take a stand where they are—demanding better wages and work conditions, either individually or as a group? This is a huge question, probably the subject of many a dissertation in the field of industrial psychology, and here I can only comment on the things I observed. One of these was the co-optative power of management, illustrated by such euphemisms as associate and team member. At The Maids, the boss—who, as the only male in our midst, exerted a creepy, paternalistic kind of power—had managed to convince some of my coworkers that he was struggling against difficult odds and deserving of their unstinting forbearance. Wal-Mart has a number of more impersonal and probably more effective ways of getting its workers to feel like “associates.” There was the profit-sharing plan, with Wal-Mart’s stock price posted daily in a prominent spot near the break room. There was the company’s much-heralded patriotism, evidenced in the banners over the shopping floor urging workers and customers to contribute to the construction of a World War II veterans’ memorial (Sam Walton having been one of them). There were “associate” meetings that served as pep rallies, complete with the Wal-Mart cheer: “Gimme a ‘W,’” etc.
The chance to identify with a powerful and wealthy entity—the company or the boss—is only the carrot. There is also a stick. What surprised and offended me most about the low-wage workplace (and yes, here all my middle-class privilege is on full display) was the extent to which one is required to surrender one’s basic civil rights and—what boils down to the same thing—self-respect. I learned this at the very beginning of my stint as a waitress, when I was warned that my purse could be searched by management at any time. I wasn’t carrying stolen salt shakers or anything else of a compromising nature, but still, there’s something about the prospect of a purse search that makes a woman feel a few buttons short of fully dressed. After work, I called around and found that this practice is entirely legal: if the purse is on the boss’s property—which of course it was—the boss has the right to examine its contents.
Drug testing is another routine indignity. Civil libertarians see it as a violation of our Fourth Amendment freedom from “unreasonable search”; most jobholders and applicants find it simply embarrassing. In some testing protocols, the employee has to strip to her underwear and pee into a cup in the presence of an aide or technician. Mercifully, I got to keep my clothes on and shut the toilet stall door behind me, but even so, urination is a private act and it is degrading to have to perform it at the command of some powerful other. I would add pre-employment personality tests to the list of demeaning intrusions, or at least much of their usual content. Maybe the hypothetical types of questions can be justified—whether you would steal if an opportunity arose or turn in a thieving coworker and so on—but not questions about your “moods of self-pity,” whether you are a loner or believe you are usually misunderstood. It is unsettling, at the very least, to give a stranger access to things, like your self-doubts and your urine, that are otherwise shared only in medical or therapeutic situations.
There are other, more direct ways of keeping low-wage employees in their place. Rules against “gossip,” or even “talking,” make it hard to air your grievances to peers or—should you be so daring—to enlist other workers in a group effort to bring about change, through a union organizing drive, for example. Those who do step out of line often face little unexplained punishments, such as having their schedules or their work assignments unilaterally changed. Or you may be fired; those low-wage workers who work without union contracts, which is the great majority of them, work “at will,” meaning at the will of the employer, and are subject to dismissal without explanation. The AFL-CIO estimates that ten thousand workers a year are fired for participating in union organizing drives, and since it is illegal to fire people for union activity, I suspect that these firings are usually justified in terms of unrelated minor infractions. Wal-Mart employees who have bucked the company—by getting involved in a unionization drive or by suing the company for failing to pay overtime—have been fired for breaking the company rule against using profanity.10
So if low-wage workers do not always behave in an economically rational way, that is, as free agents within a capitalist democracy, it is because they dwell in a place that is neither free nor in any way democratic. When you enter the low-wage workplace—and many of the medium-wage workplaces as well—you check your civil liberties at the door, leave America and all it supposedly stands for behind, and learn to zip your lips for the duration of the shift. The consequences of this routine surrender go beyond the issues of wages and poverty. We can hardly pride ourselves on being the world’s preeminent democracy, after all, if large numbers of citizens spend half their waking hours in what amounts, in plain terms, to a dictatorship.
Any dictatorship takes a psychological toll on its subjects. If you are treated as an untrustworthy person—a potential slacker, drug addict, or thief—you may begin to feel less trustworthy yourself. If you are constantly reminded of your lowly position in the social hierarchy, whether by individual managers or by a plethora of impersonal rules, you begin to accept that unfortunate status. To draw for a moment from an entirely different corn
er of my life, that part of me still attached to the biological sciences, there is ample evidence that animals—rats and monkeys, for example—that are forced into a subordinate status within their social systems adapt their brain chemistry accordingly, becoming “depressed” in humanlike ways. Their behavior is anxious and withdrawn; the level of serotonin (the neurotransmitter boosted by some antidepressants) declines in their brains. And—what is especially relevant here—they avoid fighting even in self-defense.11
Humans are, of course, vastly more complicated; even in situations of extreme subordination, we can pump up our self-esteem with thoughts of our families, our religion, our hopes for the future. But as much as any other social animal, and more so than many, we depend for our self-image on the humans immediately around us—to the point of altering our perceptions of the world so as to fit in with theirs.12 My guess is that the indignities imposed on so many low-wage workers—the drug tests, the constant surveillance, being “reamed out” by managers—are part of what keeps wages low. If you’re made to feel unworthy enough, you may come to think that what you’re paid is what you are actually worth.
It is hard to imagine any other function for workplace authoritarianism. Managers may truly believe that, without their unremitting efforts, all work would quickly grind to a halt. That is not my impression. While I encountered some cynics and plenty of people who had learned to budget their energy, I never met an actual slacker or, for that matter, a drug addict or thief. On the contrary, I was amazed and sometimes saddened by the pride people took in jobs that rewarded them so meagerly, either in wages or in recognition. Often, in fact, these people experienced management as an obstacle to getting the job done as it should be done. Waitresses chafed at managers’ stinginess toward the customers; housecleaners resented the time constraints that sometimes made them cut corners; retail workers wanted the floor to be beautiful, not cluttered with excess stock as management required. Left to themselves, they devised systems of cooperation and work sharing; when there was a crisis, they rose to it. In fact, it was often hard to see what the function of management was, other than to exact obeisance.