Want equality? Start with better jobs

Jobs. They are the primary focus of the Federal Reserve Bank, the Biden Administration, the Republican opposition and most U.S. corporations. Supposedly, with all this high-powered attention, we still can’t find enough workers to fill all the positions available. Has anyone questioned why?

One important reason might be that 60% of jobs in the U.S. are considered “mediocre” or “of poor quality,” according to a recent Gallup survey. If you combine those findings with the fact that many workers in the service economy are poorly compensated, the problem begins to come into clearer focus.

If you listen to the free market critics, generous federal unemployment checks are the root cause of the problem. These simpletons argue that these higher benefits have discouraged workers from returning to their former jobs. They ignore the obvious, which is that if the “government dole” is preferable to the offered wage, then that wage must be far too low.

It is myths like these, as well as the historical focus on the number of jobs gained or lost without paying attention to the quality of employment, which obscures the truth. 

American companies, especially in the service sector, have spent the last 30-plus years cutting wages and benefits in the name of reducing costs and improving profit margins. Global competition and lower wages abroad (especially in China) have been blamed for this development. That trend has reversed in a big way, but here in the U.S. we act like it is still a fact.

Our treatment of the American worker, especially the lower-income, service worker, needs to change. A recent Gallup poll, for example, found that only one-third of low-income workers received fringe benefits like health insurance and retirement benefits. An even smaller number received paid sick leave. Is it any wonder that only 28% of the lowest quintile workers claimed to have a “good” job?

Remember all the fuss when the Biden administration tried to raise the minimum wage earlier this year? No dice. Here’s another myth: The federal minimum wage is meant to be a living wage. At the going rate ($7.25 per hour), a family of four is living well below the poverty line. The reality is that about half of America’s working population earns less than a living wage. Is it any wonder we have exploding rates of crime among our youth? 

Parents, who just want to feed themselves and their children, are forced to work, sometimes two jobs, away from home until the early hours. That leaves their kids alone and unsupervised for much of the day and night. We all know this but choose to look the other way or worse, use the race card as an explanation. Shame on us!

But simply paying workers more is not the answer, although it certainly helps. Creating an entirely new culture around the job is the challenge we face. Not only must we, as a nation, provide higher pay and better benefits, but also a workplace culture that improves the overall lives of our employees. To me, a quality job is one that makes a person feel valued and respected with a voice in their workplace. I see it as an opportunity to shape my work life, while contributing to the goals of an organization.

If this sounds schmaltzy to you, or a job description above your pay grade, consider this: Jobs that do not meet employees’ needs have a higher-than-average turnover rate, poorer employee productivity and a lower-quality consumer experience. Amid the competition to hire workers in today’s post-pandemic environment, I believe workers at all levels are seeking more than just a sign-on bonus or a bump up over a minimum wage level. 

Otherwise, chances are your new hire will consider their position as “just a job,” as opposed to “a career.” As such, these disengaged employees cost businesses an average of $350 billion every year in productivity, or $2,246 per disengaged employee. In a tight labor market, with traditional hiring habits of “only money counts,” a high turnover of employees is a given. The cost of replacing an employee can range from one-half to two times the employee’s annual salary.  

The pandemic has changed quite a few things, some temporary and others permanent. The American worker took it on the chin during the last year and a half. Millions were unemployed, while many who did show up to work were faced with constant danger to their health and safety. Essential workers in health care, early childhood education, food production and delivery, as well as countless minimum wage workers not only showed up, but delivered in our time of need.

Many others managed to work from home, delivering to their employer extra hours, higher productivity and lower expenses for the same, or lesser wages. Going forward, there is no need for America’s workers to justify their worth. That’s been proven, in my opinion. 

No, the ball is squarely in the employers’ court. American workers have experienced deteriorating wages and working conditions over the last few decades. As a result, fundamental pillars of our democracy have been eroded.  Economic stability and opportunity have decreased dramatically, while inequality has risen to historical levels. The present polarization of this country is no accident. Our workers need and deserve better jobs with higher wages and a radical change in the quality of the workplace. 

Bill Schmick is an investment advisor representative at Onota Partners, Inc., in the Berkshires. Bill’s forecasts and opinions are purely his own and not necessarily the views of Onota Partners, Inc. (OPI). Email him at bill@schmicksretiredinvestor.com.

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