The Rittenhouse Review

A Philadelphia Journal of Politics, Finance, Ethics, and Culture

Monday, January 19, 2004  

Or Not Working in America

Several articles published over the past few days by coincidence center around a theme: working in America. Or, rather, not working in America. [Note: Addendum added January 20.]

Working (Poor) in America

In Sunday’s New York Times Magazine there is a terrific essay, “A Poor Cousin of the Middle Class,” by David K. Shipler, offering the compelling story of Caroline Payne’s struggle to overcome the inexorable rut and relenting challenges that define the lives of the working poor. It’s a profound and moving look at a life shaped by dead-end jobs, debt, bad teeth, picking up cans, and relying on the kindness of family and friends.

I tried to keep the excerpts down to a minimum, but there’s just too much in Shipler’s piece to hold back much more. (When you’re done here, go read the article in its entirety.)

Futility has nagged at Caroline for a long time. Four years ago, at the dawn of the new millennium, she sat at her kitchen table in Claremont, N.H., and added up her life. It was the height of the economic boom. The nation wallowed in luxury, burst with microchips, consumed with abandon, swaggered globally. Everything grew larger: homes, vehicles, stock portfolios, life expectancy. Never before in the sweep of human history had so many people been so utterly comfortable.

Caroline was not one of them. She had achieved two of her three goals. She had earned a college diploma (a two-year associate’s degree), and she had gone from a homeless shelter into her own house (owned mostly by a bank). The third objective, “a good paying job,” as she put it, still eluded her. Back in the mid-70’s, she earned $6 an hour in a Vermont factory that made plastic cigarette lighters and cases for Gillette razors. A quarter century later, she earned $6.80 an hour stocking shelves and working cash registers at a vast Wal-Mart superstore.

“And that’s sad,” she declared. “I’m only making 80 cents more than I did more than 20 years ago.” Or less, taking into account the rise in the cost of living. […]

Again and again, she applied to manage one sales department or another at Wal-Mart, and again and again she was passed over in favor of men -- or, she observed wryly, women who were younger and slimmer. [...]

Trying to get ahead, she always made herself available to change hours and fill in, even during evenings when she had to leave her 14-year-old [retarded and epileptic] daughter, Amber, home alone. Without a car, Caroline had a 20-minute walk each way, trekking back and forth at odd times of night in all kinds of weather. One cold February day, walking gingerly along icy streets, worried about her temperamental back, she trudged from her house to her job at her normal time of 10 a.m., only to be told to come for a shift beginning at 1 p.m. instead. So she made her way home and then returned to the store: three trips consuming one hour before earning her first dime of the day.

The people who received promotions tended to have something that Caroline did not. They had teeth. Caroline’s teeth had succumbed to poverty, to the years when she could not afford a dentist. […]

Probably no employer would ever admit to passing her over because she was missing that radiant, tooth-filled smile that Americans have been taught to prize as highly as their right to vote. . . . Where showing teeth was an unwritten part of the job description, she did not excel. She was turned down for a teller’s position with the Claremont Savings Bank, which then hired her for back-room filing and eventually fired her from that. Wal-Mart considered her for customer-service manager and then promoted someone else, someone with teeth.

Caroline’s is the face of the working poor, marked by a poverty-generated handicap more obvious than most deficiencies but no different, really, from the less visible deficits that reflect and reinforce destitution. If she were not poor, she would not have lost her teeth, and if she had not lost her teeth, perhaps she would not have remained poor. […]

[S]he moved with her children into a small apartment and bounced between welfare and dead-end jobs, supplementing her income by scavenging for cans. “We’d go and watch a ballgame at school, and I’d take bags and stuff them in my pocketbook,” she recalled. “After the ballgame I’d be going around poring through the garbage cans picking out 5-cent cans.” Her first daughter would ride her bike as far ahead of her mother as possible to avoid any hint of association. “I figured that a few cents buys some milk, buys some bread, things that you need, you know what I’m saying? It all helps. But it embarrassed her. She hated it as she got older.” […]

Anyone who walked all the way around the outside of the Wal-Mart superstore on Route 103 would walk a mile, Caroline said. The place was immense. But it didn’t seem to have room for Caroline to progress. She bounced from one department to another, from one shift to another, while her pay stayed within a narrow range, beginning at $6.15 an hour, going to $6.80, sometimes up to $7.50 if she worked at night. So unpredictable were her hours that she couldn’t work a second job to help her cash flow. She kept applying for higher positions and kept hearing that she needed a bit more experience. […]

Unwittingly, [after leaving Wal-Mart] Caroline . . . stepped into the vortex that drags numbers of low-wage single mothers down into the great chasm between decent work and decent parenting, a place where a child’s safety has to be balanced against survival in the labor market.

After a month at the wallpaper plant, the temp agency offered Caroline a job back at the Tampax factory for $10 an hour, the most she had ever earned. She took it, but there was a problem: Procter & Gamble had organized the factory on rotating shifts. One week she left the house at 5:30 a.m. and got home at 2:30 p.m., the next week she was gone from 1:30 p.m. to 10:30 p.m., and the third from 9:30 p.m. to 6:30 a.m. Putting aside the question of sleep, stamina[,] and the basic requirements of an orderly life, the swing shifts raised havoc with Caroline’s arrangements for Amber. Unable to find care, she very reluctantly left the girl home alone during her evening and nighttime shifts.

While Caroline was running machines that put packages of tampons into boxes, she was worrying about Amber, and with good cause. At 14, Amber could barely read and write, could not easily tell time from clocks with hands, and was unable to understand that she had enough money if she gave a storekeeper $10 to buy something for $4. . . . She also had epilepsy, and the risk of a seizure prompted doctors to advise that she not be left alone for long. The logistical maze of arranging care for Amber around constantly shifting hours of work had Caroline tangled in anxiety.

Amber happened to tell her teacher how scary it was being home alone after dark. The teacher was alarmed and threatened to report Caroline for neglect. [...]

Faced with the threat of being reported to the state’s child protection agency, Caroline stopped going to work, started working the phones trying to find care for Amber and came up empty-handed. […]

Perhaps the most curious and troubling facet of this confounding puzzle was everybody’s failure to pursue the most obvious solution: if the factory had just let Caroline work day shifts, her problem would have disappeared. She asked a supervisor and got brushed off, but nobody else -- not the school principal, not the doctor, not the myriad agencies she contacted -- nobody in the profession of helping thought to pick up the phone and appeal to the factory manager or the foreman or anybody else in authority at her workplace.

Indeed, this solemn regard for the employer as untouchable and beyond the realm of persuasion unless in violation of the law permeates the culture of American antipoverty efforts, with only a few exceptions. The most socially minded physicians and psychologists who treat malnourished children, for example, will advocate vigorously with government agencies to provide food stamps, health insurance, housing[,] and the like. But when they are asked if they ever urge the parents’ employers to raise wages enough to pay for nutritious food, the doctors express surprise at the notion. First, it has never occurred to them, and second, it seems hopeless. Wages and hours are set by the marketplace, and you cannot expect magnanimity from the marketplace. It is the final arbiter from which there is no appeal. […]

She sent Amber to live temporarily with her daughter-in-law in Muncie, Ind., where the schools were reputedly better. By September, Amber was in higher-level special-ed classes in Muncie; on the phone, she sounded ecstatic, so Caroline decided to follow.

To leave, however, she had to sell her precious house, for she could not comfortably rent it out from a distance. . . . In the end, she made nothing, not a penny, she said sadly. “I gave it away.”

She had maintained and improved the house sensibly for the long term, but she spent more on it than it was worth in the end. She still owed $34,000 on the first mortgage, and the second mortgage of $19,000 carried a prepayment penalty, which forced her to pay just over $20,000 to get out of it. The federal grants of $17,000 required prorated reimbursement of $16,000 because she hadn’t lived in the house long enough. After adding the agent’s fee, taxes[,] and other closing costs, she ended up short $300, which the agent kindly absorbed. Five and a half years of mortgage and interest payments had yielded nothing, and one of her dreams was gone.

As the New Hampshire winter arrived after Thanksgiving, Caroline left with pockets nearly empty. To escape from $10,000 to $12,000 in credit-card debt, she had declared bankruptcy earlier that year, much to her shame. She could not even afford to rent a truck without a $700 loan from her older daughter. A couple of friends donated their vacation time to drive the truck and Caroline to Indiana, by way of a slashing blizzard in upstate New York. She was on the move again, as she had been since childhood, but she was happy to see a little of the country.

On the move and getting nowhere.

Why so many Americans are hell-bent on making sure people like Caroline Payne can’t earn a decent, living wage is beyond me.

Not Working in America, I

James K. Galbraith’s essay, “The No Jobs President” [Subscription or day press required.] published today at is nothing if not scary, very scary, whether you’re working in America or not.

The method is clear to any who choose to study closely: It is a method of subterfuge and deception. It is the systematic and relentless pursuit of partly hidden agendas, sold to the public with slogans. […]

So it is today on the economy. What does Bush want? He wants a growth rate high enough to get him through the election. That’s obvious. After that, he doesn’t care. His clientele -- the military contractors, oil companies, pharmaceutical firms[,] and big media that control this government -- make their money on patents, contracts[,] and the exercise of monopoly power. . . . These people have no interest in full employment. They like unemployment, weak labor, low wages[,] and a government that bullies on their behalf. And after the election, if Bush wins, that is what they will get for four more years.

Bush has levers to keep the economy warm through the 2004 vote. Child credits kicked in during the third quarter of 2003. Households spent them at once, hence the 8 percent annualized growth rate that mesmerized the country for a moment. Tax refunds are due in the next few months; that should give spending another kick. The cost of war was the first big push that the economy got last year. Now much military equipment needs replacing; spending on that may be felt soon. […]

And after the election, the stagnation his backers want will not be hard to achieve. Our economy still faces major barriers to sustained growth. Capacity utilization in industry is low: a barrier to sustained growth of investment. Household debt burdens are high: a barrier to accelerating consumer spending, which will be aggravated when the housing bubble eventually pops. […]

In short, the most likely outlook is for strong growth in the first half of the year, and stagnation thereafter. Businesses know this. So they will ramp up production to meet demand, but remain resolutely reluctant to hire new workers for the long term. […]

On “immigration reform,” Galbraith is particularly scathing:

The new class of migrants would have to leave when their permits are up, unless renewed. They would have to leave if fired from their jobs. In a word, employers would judge who stays in the country and who is kicked out. Forget labor rights. Forget unions. […]

There is worse still. Bush made clear that this program is not just for workers presently in the country, as the press has mostly been reporting. It is not just for those who may soon arrive. No, it is far broader than that. Here’s the president’s speech: “If an American employer is offering a job that American citizens are not willing to take, we ought to welcome into our country a person who will fill that job.”

This program will permit any employer to admit any worker. From any country. At any time. The only requirement is that it be for a job Americans are not willing to take. But it is easy to create such jobs: Cut wages. Terminate the unions. Lengthen the hours. Speed up the lines. Chicken farmers have known this for years. […]

And for those who take up the program, register as temporary workers, and then see their permits expire? Bush is at pains to say that he expects this group to go home. But who will make them? Will the government organize a mass campaign of roundups and deportations? Or will the workers just quietly disappear back into the sub-underground of the truly illegal?

Galbraith mentions and provides a link to an excellent study by Lee Price and Yulia Fungard of the Economic Policy Institute, “Understanding the Severity of the Current Job Slump.” Talk about scary. Their report makes Galbraith sound like a Pollyanna.

Not Working in America, II

Finally there is the ongoing phenomenon of not working in America because the jobs have been sent overseas, a topic suddenly in the news again.

In today’s Wall Street Journal William M. Bulkeley reports on developments at IBM (“IBM Documents Give Rare Look at Plans on ‘Offshoring’” [Subscription required.]):

In a rare look at the numbers and verbal nuances a big U.S. company chews over when moving jobs abroad, internal documents from International Business Machines Corp. show that it expects to save $168 million annually starting in 2006 by shifting several thousand high-paying programming jobs overseas.

Among other things, the documents indicate that for internal IBM accounting purposes, a programmer in China with three to five years experience would cost about $12.50 an hour, including salary and benefits. A person familiar with IBM’s internal billing rates says that’s less than one-fourth of the $56-an-hour cost of a comparable U.S. employee, which also includes salary and benefits. […]

The documents describe work done by IBM’s Application Management Services division, part of Big Blue’s giant global-services operation, which comprises more than half of the company’s 315,000 employees. The affected workers don’t deal directly with customers; they write code and perform other programming tasks for applications software used inside IBM.

The plan would move jobs from U.S. locations including Southbury, Conn.; Poughkeepsie, N.Y.; Raleigh, N.C.; Dallas; and Boulder, Colo. IBM plans to transfer the programming work to its own operations in Bangalore, India; Shanghai and the northeastern city of Dalian in China; and Sumare, Brazil. It isn’t clear how many jobs will be added in each location.

Some of the foreign programmers will come to the U.S. for several weeks of on-the-job training by the people whose jobs they will take over. That’s an aspect of offshoring that many high-tech workers regard as particularly humiliating.

That last sentence is interesting: “high-tech workers” consider this humiliating, the Journal reports. You know, because all those manufacturing-sector workers who have been training their Third World replacements for the last several decades found the whole process to be a real boost to their self-esteem, to say nothing of their prosperity.

I suppose this is why the subject of “offshoring” is the talk of the town, with the bright lights of the media having forgotten the hemorrhaging that devastated so many communities and families in the Midwest and Northeast. (See Caroline Payne, supra.) You see, when your friends’ jobs are shipped overseas, that’s news.

[Post-publication addendum (January 20): Offshore This, Carly: By the way, could there be a worse spokesperson defending offshoring than Hewlett Packard Co.’s Carly Fiorina? Earlier this month Fiorina, defending the practice and appealing to the Bush administration for support, said: “There is no job that is America’s God-given right anymore. We have to compete for jobs.” That’s true, at least theoretically. Even Fiorina’s job isn’t a God-given right, it’s one that comes courtesy of HP’s board of directors -- a board she conveniently happens to chair -- and shareholders. (You know HP, don’t you? Really “high-tech” operation. Nearly 40 percent of profits come from producing those sleek and futuristic gadgets known as toner cartridges.) Fiorina has been running the show at HP for nearly five years now. During that time the company’s stock has underperformed both the S&P 500 and the Nasdaq Composite. Actually, an investor would have done better with a passbook savings account. I wonder if there’s anyone in China or India looking for a cushy CEO slot. Hey, the new chief wouldn’t even have to move.]

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