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MN2020 - Tuesday Talk: Are you feeling the recovery?
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Tuesday Talk: Are you feeling the recovery?

October 15, 2013 By Joe Sheeran, Communications Director

Economic and political leaders are quick to tout America’s comeback, but far too many Minnesota workers have been left out of the recovery. The state is failing to produce the same quality of jobs as before the recession, according to JOBS NOW’s analysis of DEED’s job vacancy survey. The low-wage service sector is driving much of the new demand for workers, with little sign of an overall shift to accommodate workers with advanced training. “Only 42 percent of job openings require education or training beyond high school—an even smaller share than four years ago when it was 44 percent. Similarly, only 25 percent of openings require a four-year degree, compared with four years ago when it was 29 percent.”

Wages have also declined. Minnesota’s median household income dropped roughly $5,000 since 2000, in constant 2011 dollars. Many believe this is a permanent, structural shift to a low-wage economy with far-reaching implications for people across our state.

This morning from 8-9:15, Chris Conry, TakeAction Minnesota’s Economy Program Manager, joins us to discuss the value of work in a 21st century economy.

Minimum wage, living wage, paid sick days… What policies will bring real economic stability to Minnesota workers?

 

Post your comments or questions in the box below, scroll down to see the ongoing conversation, and use "refresh" to see new comments. 

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24 Comments:

  • Chris Conry says:

    October 15, 2013 at 8:12 am

    Good morning.  Welcome to your Tuesday conversation about the future of work and role of low-wage work in our changing economy.

    A good jumping off point is a fairly recent report from the National Employment Law Project: The Low-Wage Recovery and Growing Inequality.  It presents their analysis and job loss pre-recession and job growth post-recession.  What they find is that high-wage jobs have made a comeback, while the share of mid-wage jobs being created has stagnated.  Instead, low-wage jobs are far and away the kinds of jobs the U.S. employers are creating.  They are growing 2.7x’s faster than mid- and high-wage jobs.  In a simple sense, the mid-wage jobs lost in the recession are being replaced by low-wage jobs.  What does this trend mean for working families?  Have you seen this trend before?  Have you experienced this trend yourself?

  • Rachel says:

    October 15, 2013 at 8:14 am

    From Jess on Twitter:
    Taking public funds out of private banks, so they can be reinvested in the communities that need them the most.

    • Chris Conry says:

      October 15, 2013 at 8:23 am

      Jess, to respond in a few more characters than you have to use: your point is a good one.  Public sector jobs are often the better more stable jobs available and are much needed to take on the shared challenges we all have: educating our kids, protecting our built and natural environment, caring for vulnerable adults, etc.  If we could move past the ideological opposition to government, this would be a very promising area for growth.  Instead, the destruction of public sectors has been one of the real drags on our recovery and a contributor to this low-wage trend overall.  Putting people out of work during a recession, big surprise here, makes the recession worse.

  • Joe says:

    October 15, 2013 at 8:14 am

    So what you’re saying is this isn’t just a matter of getting a better education? Because even for people with a modest skill set, mid-level jobs are tough to get.

  • Rachel says:

    October 15, 2013 at 8:19 am

    From Laura on Twitter:
    Raising the minimum wage, indexing it to inflation.

    • Chris Conry says:

      October 15, 2013 at 8:30 am

      Laura, yes, this is key.  Had we indexed the federal minimum wage back in 1968 we’d have a $10.59 minimum wage today.  That’s great.  It’s a good start and if you are a single adult that would give you a living wage in many places.  If you are a parent or caring for another adult, this still comes up short: meaning your family is still working full-time and still living in poverty.

  • Lily says:

    October 15, 2013 at 8:28 am

    When you talk about the quality of jobs being created, even the low-wage jobs, the ones at minimum wage, are only part-time. When families can’t count on stable hours each week—sometimes 32 hours, the next week only 25 hours, that’s a real problem. Can you speak to this?

    • Chris Conry says:

      October 15, 2013 at 8:39 am

      Lily, you’ve raised a critical point here.  The issue with these jobs isn’t just the pay.  USA Today ran an article on this back in August.  They reported that since March there are 791,000 new part-time workers and only 187,000 full-timers.  Saying ‘you’re not alone’ in dealing with a lousy schedule is small comfort, though.  The issue of erratic scheduling has real consequences for families.  From making it more difficult to pair it with another part-time job to just dealing with your kid’s schedules, this is a real problem.  Unfortunately, the trend toward ‘flexibility’ in the workplace (read: flexibility for the employer) and ‘just in time’ scheduling is growing.

  • KJC says:

    October 15, 2013 at 8:36 am

    I suppose there are some people who are high enough on the “food chain” to not feel the direct impact much, and react selfishly…especially when goaded by “divide and conquer” politics.  Given the clear drop in average income, if you’re honest… 90% of the people would have to admit (even if it’s no fun to see) that they’ve been affected. 
    With the benefit of 20/20 hindsight, it possible to see that America started sliding after the first fuel crisis… and then slid more heavily in the 80’s under Reagan… there was a brief respite under Clinton (and the internet bubble,) and then the ugly squeeze on Average Americans resumed under Bush 43, culminating in mega-pain with the Great Recession.  There was globalization gaining through all this, and there were a lot of political decisions made that protected/helped the Top 10% at the expense of the Bottom 90%.  You need only look at the Top Marginal Tax Rate over the last 50 years to see a very visible example of how They Got Theirs!
    I need no further convincing of “how bad” things are, do you?  We’ve fallen into Gilded Age II, as reminders of the the excesses of Gilded Age I keep (re)gaining.  Money = speech and crap like that.  Last time?  The moguls got worried about this T. Roosevelt, who publicly spoke about breaking-up monopolies, etc.  He was popular and was Governor of New York (the most important state at the end of the 1800’s.)  So?  They made SURE he got the job of Vice President, seeing it as good way to marginalize him… unless there’s a tie in the Senate, he doesn’t even get to vote on anything!  Then?  The President was assassinated after only a few months in office, and he became President… and their worst fears materialized.  The balance of power between Capital (the moguls) and Labor (the people) got a big time readjustment. 
    I don’t think we can count on such an accident of history again… we must actually do accomplish that readjustment ourselves. How?  Have a $15/hour adult minimum wage like they do….successfully I might add….in Australia, as one example.  You should have health care that isn’t tied to your job… oops, we just did that.  And the Big Moguls are even willing to shutdown our government, and flirt with default (despite Section 4 of the 14th Amendment) to try to somehow stop it, after the fact.  Get the picture?
    I still think we need “if you want to sell here, you will employ here” legislation.  If the people taking money out of the economy don’t put enough in (and that’s not as assured in a global economy, like it was in a national one) then you can have an unsustainable situation… where money slowly drains out of the country (it’s called the trade deficit) and people slowly get poorer here.  Those who are “getting” must “put in,” for the prosperity of everyone, including the moguls.  It’s why Henry Ford doubled wages… to ensure that there was income (sharing in the fruits of their productivity) to drive aggregate demand… even though there were thousands of applicants for his assembly line jobs, everyday.  Get the picture?
    Looking at our own history, and the current situation… these are examples of policies that will help all of America, including Minnesota workers.
     
     

    • Chris Conry says:

      October 15, 2013 at 9:16 am

      KJC, I see you have a passion for history like I do.  One thing I would add to your analysis is this.  A key, widely reported dynamic since the recession started is that major corporations are holding huge amount of cash on hand.  For example, there was a moment on 2011 when Apple had more cash on hand than the U.S. federal government.  With this much capital held back from the system a few dynamics start to play out.  One is mergers and acquisitions.  You’ve got the money so you spend it buying up smaller competitors.  The second is shareholder pressure to pay out dividends.  A third is the straight up demand for jobs.  I think one of the key lessons that CEOs have picked up from workers is the power of the strike.  Refusing to play your role in the system can cause a real disruption and be used to leverage other gains (i.e. the austerity demands we see being made by outfits like Fix the Debt).

      • KJC says:

        October 15, 2013 at 10:05 am

        Apple is a perfect example Chris.  They moved their intellectual property rights to Ireland.  Why?  So they can pretend that the money is made there, and avoid paying billions and billions in U.S. Taxes.  And Ireland?  They report that as Apple has no significant operations there, so they pay no taxes there either.  Just as the industrial revolution brought you Gilded Age I, the Information/Global Trade revolution has brought us Gilded Age II.  In times of big change, the wealthy and powerful can generally take advantage better than regular people… that’s why The Rules have to change too.
        If we said “if you want to sell here, you must employ here” Apple would have to move jobs from China back the U.S.  And they surely wouldn’t be the only ones.  Ahuge upsurge in employment would occur here… nobody is walking away from selling here… as long as everybody had to do it (unlike now) companies would find a way to make it work.
        And?  We should close the tax loopholes (that the Big Moguls paid lobbyists to get for themselves) that allows this phony pretense that the money is being elsewhere, and other avoidance schemes… we all know the truth: the money is made where the products are sold!
        If we don’t deal with the macro issues, coming up with modest solutions on smaller issues is only working on symptoms.  And we all know how that turns out: you swat down one symptom and three more pop up!  The three ways that our “Plutocracy” can end were all laid out in a Citibank document back in 2005….yes, that’s even the name they gave it.  (1) Confiscation of assets, (2) confiscatory taxes and (3) a change in the balance of power between capital and labor.  Which one of those three do you favor?  #3 seems a preferable way to go, to me.  Oh, and their big concern about the likelihood of any of those 3 things happening?  From that document: those affected (like here in the US) can still vote…  KJC
        P.S. I have that long document… it’s 3 dozen pages.. but you won’t find
        it on the internet.  Their lawyers go right to the ISP’s to have it taken
        down, if anybody puts it up.  What does that say about it’s importance?

        • Bernice Vetsch says:

          October 15, 2013 at 10:55 am

          Our Congress would have the power to force corporations who sell their products here to pay taxes here, no matter how many thousand of them say they are “located” in the Cayman Islands. 

          If they refuse to pay their fair share here, we could refuse to let them do business here.

          • KJC says:

            October 15, 2013 at 11:16 am

            Absolutely Bernice.  And, just so you know, the CEO of IBM had that as one of his four most basic principles.  He didn’t think IBM was “entitled” to do business (take out money) in a particular country.  Here’s an excerpt on that Palmisano, CEO of IBM, from December 2011.

            This column is a glimpse of the thinking behind some of the major steps I.B.M. has taken under Mr. Palmisano’s leadership, based on two recent interviews with him.
            He says his guiding framework boils down to four questions:
            • “Why would someone spend their money with you — so what is unique about you?”
            • “Why would somebody work for you?”
            • “Why would society allow you to operate in their defined geography — their country?”
            • “And why would somebody invest their money with you?”
            Mr. Palmisano formulated those questions in the months after he became C.E.O. in March 2002.
            As soon we change the ability to sell (do business) here from an “entitlement” to being a responsibility, we’ll turn things around.  And no less than the CEO of IBM agrees it’s a legitimate question.  KJC

  • Colleen O'Connor Toberman says:

    October 15, 2013 at 8:38 am

    What I find frustrating is that taxpayers pick up the bill when private employers don’t pay a living wage. I help people enroll in SNAP, MinnesotaCare, and other public benefits because their employers are paying them $8 an hour and they can’t make ends meet. We’re all paying the cost of not forcing employers to pay their workforce something closer to what people need to actually get by.

    • Chris Conry says:

      October 15, 2013 at 8:48 am

      Colleen, you’ve hit on a key, frankly under-reported, dynamic in all of this.  The issue is what economists call externalities.  In the same way that an Exxon Mobil should not be allowed to pass on the bill when they spill oil, it is unfair to expect taxpayers to pick up the tab for employers who decide to race to the bottom.  There is an excellent report coming out today from UC Berkeley finding that 73% of those enrolled in public benefits programs are working.  52% of the families of front-line fast food workers are enrolled in public programs.  Yikes.  This is a tax subsidy to the McDonalds that is usually overlooked.

      • Lee says:

        October 15, 2013 at 9:18 am

        From the employers perspective, an employee must provide value to the company and the payment that is given is based on the value provided and the amount of revenue that results from that employees work.  Many of the lower paying jobs that we are seeing are in service and retail work. If the wage paid, as some people suggest is increased, the direct result will be an increase in the price of the service or item being sold. That affects each person purchasing the item or service.  Every item of expense affects the selling price of the item. That is the simple economics of business.  Much of the funds to operate our inefficient Government is realized by the taxes that are paid by Corporations and Small Business in Minnesota.  For example, in Minnesota, a corporation that makes more than $100,000 in net profit pays nearly 50% in State and Federal Income Taxes.

        • KJC says:

          October 15, 2013 at 10:33 am

          Lee:  I do not mean to say that your post is inaccurate.  Hey, sometimes I’ve been the guy looking at that equation.  What matters more is?  How do we rank competitively in total business taxes, and, vs. what business gets for it?  I go to the Ernst & Young Tax Studies… which you can see on-line.  They’re doing the books for many big companies…so?  They see what actually Gets Paid, not merely what the “headline” rate is.  They see the net (real effective rate after loopholes.)
          Minnesota tends to be? In the bottom half of total state tax burden, in terms of %.  How is that?  Many other states keep their corporate income tax rates looking lower, and them clobber businesses with all sorts of “fees,” etc.  I’ve reported on this before, if you check the archives. 
          I just looked at 2012, and, again MN looks, again, to be in the “good half” in the measure of “actual business taxes paid vs. expenditures that benefit business,” which is one of the E&Y calculations.  I tried to drag-and-drop the chart, but it won’t go.  If you put Ernst & Young State Tax Study in your browser, you’ll find them.  What’s really being paid, not merely the “headline rate,” and are we competitive?  In a comparison with other states, MInnesota is not high, in terms of the total business tax burden (and value received.)
            Here’s the page info on 2012…KJC
          18
          Figure 5. Business taxes per dollar of government expenditures benefiting
          businesses, FY2012
          Source: EY estimates based on data from the U.S. Census Bureau, State and Local Government finances.

  • Joe says:

    October 15, 2013 at 8:54 am

    Chris, you brought in a few reports this morning… from what you’ve found, how do we avoid creating a “permanent, structural shift to a low-wage economy” in Minnesota, where we have super-high wages at the top and poverty at the bottom with nothing in between?

    • Colleen O'Connor Toberman says:

      October 15, 2013 at 8:58 am

      I’m curious about this too. At least in my neighborhood, it seems like the “exciting new ventures” that will lead to “job creation” are bringing mostly part-time, low-wage jobs. They’re jobs we need in the community—retail, food service, etc.—but not jobs that pay what people need to survive. What’s the solution? Raising the wages for those industries? Or focusing more on bringing in industries with higher-paying jobs?

      • KJC says:

        October 15, 2013 at 11:55 am

        Great questions Colleen.  Mostly without “easy” available answers.  Well, raising the minimum wage to a living wage is a no-brainer.  It works in Australia to have an adult minimum wage of $15, it would work here too.  That would make a huge difference in the everyday lives of millions of Americans (and reduce social program costs, too)
        As for the “bringing in more industries with higher paying jobs,” that’s the Big Question, isn’t it?  From where?  If it isn’t from outside the USA, there will be no net gain for the whole country.  As a nation, that would not add one cent to our total prosperity. And Big Business has been so good at playing “beggar thy neighbor” in terms of playing Cities and States off against each other… to pay-in even less.  I think they move every so often purely to “harvest” the concessions.  When you’re trying to REALLY fix the jobs crisis long-term?  You see the futility of merely stealing a plant, say from, Wisconsin.  There is no net gain for the whole country… just a different set of winners and losers.
        Back in the 80’s there was a great hue-and-cry about our manufacturing jobs leaving here.  Remember Control Data, Sperry Univac, etc?  Yes, those were good paying jobs.  Those who raised alarms?  (Like me.)  We were put-down as “not getting it,” that we were just moving to the “service economy.”  I strongly suspected that those jobs were going to pay less… and nobody wanted to talk about that.  Worse, I also suspected that it also meant moving from a “producer” (of goods) economy to an emphasis on “consumption.”  That worried me… it seemed to me that, in the long-run, that if you diminish your ability to produce (for global $$) and your trade deficit goes up, that your ability to consume also must eventually slip… in the aggregate… as the money leaves the country.  (To the countries that did fight hard for real jobs.)  Yes, you can maybe borrow, for a while, to try and cover it up… like we did in the last decade… but that’s just a bust waiting to happen.  (And it did.)  In this consumption-over-production system, there are far, far more losers than winners.  Those at the The Top can win… by moving jobs overseas, for a quick increase in profits…. at the expense of everyone else (and longer-term consequences.)
        I wish I had been wrong, really.  Here we are…every one of those ugly things came true.  This is why I keep proposing “If you want to sell here, you will employ here.” so there will be production jobs (that bring into, or at least keep money from leaving, our total national economy) and that will bring back employment with incomes that will support more than survival-level consumption.  Real prosperity, where nearly everybody will win.  Henry Ford was right, back in 1914…when, with only a hard-nosed business goals in mind,  as he had not a trace of “liberal” blood in his body.. he doubled his worker’s wages.  He was thinking long-term, and how to build aggregate demand… about far more than just the next “quarter.”  And, apparently we will have to help (with Updated Laws) American Business think that way again.  KJC

    • Chris Conry says:

      October 15, 2013 at 9:12 am

      Joe, thanks for moving us on to what we ought to do next.  First, I think we have to have a strategy to preserve what we have: meaning we have to stop destroying public sector jobs.  In many small towns in the state (like the small town I grew up in in Iowa) the public sector is a sizeable part of the middle class: teachers, county extension offices, police, etc.  Second, we have to preserve what we have in private employment.  This means strengthening the hand of workers to be able to protect standards through both thick and thin.  In other words: unions.  Third, we can act legislatively and administratively to raise standards across the board.  The minimum wage bill being considered in the state legislature now is a great example of that.  Finally, we need to create new jobs in strategic sectors of the economy where there is a compelling public need, no viable market-only solution, and real pent-up demand among families.  We need jobs to deal with climate instability, the senior boom, financing higher education, fixing aging housing stock, improving our mass transit, etc.  These are all areas where our state is leaving talent on the table.  We are missing opportunities to improve our state and improve people’s lives at the same time.

      • Bernice Vetsch says:

        October 15, 2013 at 4:53 pm

        Yes to all you say.

        I’d like to add to the discussion the fact that our government has spent three negotiating the Trans-Pacific Trade Partnership (TPP) in secret with the proposed member countries and 600 corporate representatives.  A small portion of the agreement was leaked to Public Citizen in the Spring of 2012 and its Trade division has tried mightily to spread the word that this agreement contains very little about trade and VERY much about enhancing corporate profits.  It will, like NAFTA, ease the process of off-shoring jobs, will allow the drug industry to extend patents and charge poor countries very high prices and other measures (anti-worker/anti-union, anti-environmental controls) that must make the Koch Brothers go to sleep with a smile on their faces every night. 

        Public Citizen furnished Congress with the leaked materials and members of both the House and Senate sent
        irate letters to the president.  Instead of correcting his mistake, the president has appointed a second trade ambassador to carry on with the negotiations established by the first and who is asking the Congress to fast-track this agreement.  This means that members of Congress may not discuss, debate or amend the agreement before they must vote on it as is. 

        If we think our lack of jobs is hurting America now, we can expect more of the same—along with the stupid “austerity” economics that is destroying the economies of one country after another.

  • Chris Conry says:

    October 15, 2013 at 9:19 am

    Thank you everyone for joining in.  This is my first time doing this and I really enjoyed it.  It woke me up much faster than coffee.  I’ll check back later today to see if there is more traffic.  Please come back on future Tuesdays.  This is a great forum to hear and be heard.

    Chris

  • Jack Ray says:

    October 15, 2013 at 9:31 am

    Raising the minimun wage is essential, but we also need to reinvent the economy from the ground up. Ordinary capitalism will not deliver for most of us on the trajectory it’s on now. I am too old to hold out much hope for ordinary revolutions either. I am hopeful however, and believe people can create a new economic world and will. I suppose large multi-nationals will still be part of the mix, but as more and more people choose alternate ways of living in and working in the world, big business will have to adapt or die. We can’t move much more in the direction of debt slavery without everyone recognizing the game and then that falls apart. Let’s reinvent our economy, let’s experiment with coops, ESOP’s, barter, public/private enterprise, local currency, benefit corporations, co-housing, co-working, chosen material modesty. Let’s travel less, eat with people we love to be with, support a local food economy, find our pleasure more simply, and co-create a better world for all.