The American Recovery and Reinvestment Act has finally been signed into law, and a full menu of implementation work is on the table. Even this milestone achievement, however, won’t be enough to support the full agenda for working families. Jump-starting our economy is critical, but this alone will not solve the deep crisis of inequality that has been building in this country for decades.
Long before this recession set in, working families were already struggling to survive in a brave new world of stagnant wages, disappearing benefits and little job security. Government has retreated from intervention in all things economic, and it’s our workers who bear the costs. Americans are more productive than ever, but a shrinking share of corporate profits is going to their wages. They are working harder and for longer hours, but their upward mobility is stunted.
And every day, millions of workers clean our hotel rooms, serve our food, ring up our sales, care for our grandparents and in general keep our economy running–but for low wages, anemic benefits and a dead-end career. In fact, according to the Bureau of Labor Statistics, eight of the top ten occupations projected to generate the most jobs by 2016 are low-wage jobs in the service sector.
This is the biggest unspoken challenge for our recovery: low-wage jobs have become a key growth engine of our economy. Policies focused only on job growth will simply put us back on the path toward greater inequality. If we truly want to rebuild a good jobs economy–to “create jobs that sustain families and sustain dreams,” as President Obama recently put it–we have to act now to lay down the institutional and regulatory framework.
So what are the opportunities to forge a new social contract surrounding work? How can we craft a recovery strategy that seizes opportunities for fundamental reform, even as we struggle to bring the country out of recession?
One way to answer the question is to think about the tools and points of leverage the government has available to increase the number of good jobs in our economy. Here are four concrete strategies that are both low-cost and put more money into the pockets of low-income families.
First, we need to fully enforce minimum-wage and overtime laws, because growing numbers of employers are ignoring even the most basic of these laws and retaliate against workers for reporting violations. In October, for example, a federal judge ordered the Saigon Grill in New York City to pay its delivery workers a full $4.6 million in owed wages. And in December Wal-Mart announced it would settle sixty-three cases in forty-two states charging unpaid wages, totaling at least $352 million and involving hundreds of thousands of current and former workers.
Rebuilding our economy on the back of illegal working conditions is not only morally untenable, it’s not smart policy: these practices hurt workers and responsible employers alike and cost billions of dollars in tax revenues.