The elite’s war on the low-wage worker

Relegated to the background, America’s low-wage workers have been making considerable noise lately by deploying an unusual weapon — one-day strikes — to make their message heard: they’re sick and tired of earning just $8, $9, $10 an hour.  Their anger has been stoked by what they see as a glaring disconnect: their wages have flatlined, while median pay for chief executives at the nation’s top corporations jumped 16 percent last year, averaging a princely $15.1 million.
Earlier this month hundreds of low-wage employees working for federal contractors in Washington walked out and picketed along Pennsylvania Avenue to urge President Obama to press their employers to raise wages.
Many low-paid workers feel their employers have put an invisible ceiling on their wages, with little prospect of ever making more than $10 or $11 an hour, as corporations have focused on keeping wages competitive and maximizing profits to benefit shareholders. The richest Americans have benefited mightily from corporate America’s record profits and the stock market’s repeated highs.
“Long-term trends have not been kind to low-wage workers,” said Lawrence F. Katz, an economics professor at Harvard University. “They’ve been hurt by technological change” — scanners, for instance, have reduced the demand for supermarket cashiers — “and by the decline in institutions like labor unions and the minimum wage,” which has not kept up with inflation in recent decades.

The bottom 20 percent of American workers by income — 28 million workers — earn less than $9.89 an hour. That translates to $20,570 a year for a full-time employee. Their income fell 5 percent between 2006 and 2012. Wages for workers at the 50th percentile — their median pay is $16.30 an hour — have also dipped, falling 3.4 percent, while pay for the top 10 percent rose 3 percent.

Corporate America has embraced many strategies to slice labor costs. Many Walmart stores — as part of a new strategy to save on wages and benefits — are hiring only temps to fill job openings. Scores of companies are relying increasingly on part-timers, who typically get paid several dollars less per hour than full-timers.

Caterpillar has pioneered two-tier wage systems, in which workers hired after a certain date are consigned to a significantly lower wage scale than others, and it recently pressed its longer-term employees into accepting a six-year wage freeze. Many Caterpillar workers ask why the company insisted on a pay freeze when it reported repeated record profits — $5.7 billion last year, amounting to $45,000 per Caterpillar employee.

Caterpillar’s chief executive, Douglas Oberhelman (whose compensation has increased more than 80 percent over the last two years), says the freeze was vital to keep wages competitive with rival companies. “I always try to communicate to our people that we can never make enough money,” he recently told Bloomberg Businessweek. “We can never make enough profit.”


“Employers pay their work force as much as they are forced to and no more. There’s no compelling reason to give raises” with the unemployment rate as high as it is. said Nick Hanauer, a Seattle-based entrepreneur.


  1. Thanks for your insistent push for the truth. When I don’t re-blog some of your news, I certainly enjoy readying it. Peace Frack_Free_Farming

  2. Fight the Power!

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