Sunday, December 25, 2016

Merry Christmas!

Christmas season started for me on December 21st, almost a month after Black Friday and weeks after many already maxed out their credit cards. I went to a big box store. It was late and I already had a long day that started before 4am. The ship and I had been at sea, almost continuously, for a month, and  we quietly pulled into port.   As I made my last Christmas purchases- mostly premeditated with a few impulse decisions, I was bumped into by other weary shoppers hustling like Olympic sprinters. 

They used to say that once the crowd talks about the stock market, it’s time to sell. But the post-election stock market surge kept good times rolling. So much so that one guy told me that his stock market gains were larger than his paycheck. I congratulated him on behalf of Uncle Sam, who appreciates the hard work of passive income by giving a lower tax rate. 

Conspicuous consumption is back, with new products to “solve” the problems of the rich and “mass affluent”. You can see a stream of “Happy Holiday” ads that make you forget the reasons for the season (the Temple in Jerusalem for Jews or Christ’s Birth for Christians), not to mention songs about bigger and better presents. 

The millennials have more enlightened  spending habits; they prefer to spend on priceless and timeless experiences. Plane tickets to visit faraway family?  It’s important. I whipped out a credit card, rented a car, loaded it with my Christmas trinkets, and drove home.  I spent two wonderful days with my family; now it was time to plan for an unforgettable New Year’s. Should I bring the nice secondhand Italian suit; or is that overkill for Norfolk, I thought? As I was driving back to work for a shift on Christmas Day, I heard a song that I haven’t heard before. Amazing, since it played the year I was born. The song was called “The Gift”, by Garth Brooks, and its protagonist is a poor orphan girl named Maria:

“There were diamonds and incense and perfumes in packages fit for a king;
but for one ragged bird in a small cage Maria had nothing to bring...
Just then the midnight bells rang out and the little bird started to sing
A song that no words could recapture, whose beauty was fit for a king”.

Merry, Joyous, Christmas to all.

Saturday, December 3, 2016

The Value and Price of Work

A rare books review on the blog. By chance in the ship’s library, I read two books that turned out to be a before-and-after on America’s poor and working class. “Why America Doesn’t Work” is a commentary on the ‘decline’ of the American work ethic. Written in the early 1990’s book, it includes firsthand examples of the Soviet elite’s corruption and the failed state they ruled. On their trip to the USSR, the author saw two things that worked: the black market…and the gulag, where productive inmates were able to earn overtime as an incentive. “The beginning of a free market?” the author noted.  Chuck Colson and Jack Eckerd sounded an alarm about a growing cultural and income gap between workers and the ruling class. Twenty-five years later, our new President of the United States was able to capitalize to victory on voters’ concerns about those educated, connected elites.  These voters even included “college educated whites”, who turned out to be Trump’s stealth supporters. What were Chuck Colson’s concerns?

A welfare system that punished work (known as AFDC)
A prison system that encouraged idleness and recidivism
Schools failing to educate students
Apathetic university students waiting to graduate with huge salaries
Big businesses allowing Japan and West Germany to eat their lunch
“Age of Aquarius”, the prominence of leisure, decline of morals such as honesty.
Money-lusting, middle class, Self-interested teens slacking on the job
Oh… and the lack of mutual respect between employee and employer.

And most prominently, that the old saying “An honest day’s work for an honest day’s pay” was now a Jay Leno punchline.

Some changes have happened since. Businesses have smartened up, embracing quality control, innovation (read: Fast Company, which began in 1995) and keeping a closer check on “time theft”. It’s less likely for new graduates to trip into a high-paying Wall Street job. Morals might be firming up, says Gallup,  if you leave out loosening opinions on drugs and marriage. Today, we have charter schools, No Child Left Behind, a well-intentioned program; and “high achieving students” are noticed. Some new employer-employee models have been tried, such as a uniform pay rate (one company had a $70,000 a year minimum salary) and adult playgrounds at tech companies. Hipsters and the Maker Movement are bringing back a culture of craftsmanship and restoring the dignity of work- even in once-menial jobs like coffee-wenching.

Shortly after the book was written, Bill Clinton, one of those New Democrats, and Newt Gingrich’s Congress, ended “welfare as we knew it”. What happened to the poor? We learn about them in “Nickel and Dimed”. The author laments that there was no provision in the welfare reform bill to track its effects. She had some not-so-good numbers from research groups, but decided to explore the mystery of the working poor. 

The author, Barbara Ehrenreich, accustomed to a comfortable lifestyle, dives into the world of minimum wage work. Notably, she attempts to pay rent in motels and apartments without a significant other or roommate pitching in. I know this challenge myself: without paying rent, my high school lifeguard job at $8.50 per hour felt like rolling in dough; a post-collegiate job offer thrice that rate was enough to make ends meet, considering rent. So I was intrigued. The book was written 15 years ago, but many of the truths remain the same. 

Transportation and Mobility
The bewildering question of why workers working for minimum wage were not upwardly mobile- why didn’t they flock to jobs paying a bit better? Why were they passing up a seeming opportunity? There is the unpaid time that would have to be invested in finding and securing a job. Not the monthly bills middle-class people face, but the daily fees like motel rooms. Management issues were a concern; middle managers (themselves not well compensated) were presented as lacking in leadership skills, so workers often decided to resign themselves to the “devil you know”. But the overarching issue is the question of access to these better paying jobs. Sure, riding infrequent bus routes in the suburbs is inconvenient and time-consuming, but doable. Until you consider the need to pick up the kids from school, or to go to a second job. Changing jobs would require rearranging one’s transportation.

When I go grocery shopping, I scratch my head at some of the bills. They seem bigger than last year; even more than just two months ago. For me, I take the information and look to see if my credit union is also increasing its rates with inflation- on savings accounts. For the working class, no good comes out of higher grocery prices. It isn’t expensive to eat healthy (but it’s not cheap either!)
The author noted that her co-workers were filling themselves with high-carb, high-fat junk food, with long-term health effects. That was all they could afford. As for the nasty cigarette and booze stereotype associated with the poor, I was interested to learn that being a smoker was a way to get a smoke break- a few minutes’ time off the job. The small amounts of cheap alcohol eased aches and pains associated with their labor. As a country singer sung: “…beer sitting on ice, after a long hard day, tastes just right”.

Today, the cost of a combo meal at a fast food restaurant is the same as a healthier meal at a take-out place. It seems like these fast food establishments are preying on a lack of knowledge of alternatives. We live in the information age; those who have knowledge have the power.

During the 1990’s, it appeared that little attention was paid to the minimum wage as the middle-and upper-classes increased in wealth through salaries and a go-go stock market. Fifteen years later, some of the dynamics have changed. Due to the living wage movement, the minimum wage will be $4.25 per hour higher in DC than neighboring Virginia; the author noted that increased minimum wages do have a spillover effect. Also, with job growth moving from sprawl to transit-oriented town centers and inner-cities, are the transportation issues faced by the working poor getting better?
The author noted some cultural factors affecting the visibility and esteem of the working class:  Market segmentation meant that wealthy shoppers “never rubbed shoulders” with the poor, loss of middle-class teen interest in summer and after-school jobs, and marginalization by popular media. And secondhand clothes meant that the poor no longer have to “look poor”. 

Housing Issues
One thing that is different is gentrification, a factor that didn’t have to be considered in 1998. The author worked solely in suburbs and small towns, while noting that the poor were concentrated in the inner-cities. Today, as cities gentrify, and the working class is squeezed on housing cost or commuting time.  Luxury apartments are replacing alternative- and necessary- living arrangements like the Joyce “hotel” in Portland, Oregon, or YMCA-style Single-Room Occupancies with bathrooms at the end of the hall. These arrangements are an important buffer against homelessness. For the author, it was a major struggle saving enough to make first month’s payment, and tiding over any unexpected health or car expenses. The largest secret, perhaps, is that the poor tended to live with roommates, other working family members, or a boyfriend- well after their twenties are over.

More than ever, retail companies want managers for the lowest cost possible; so much so that Vice President Joe Biden wants to redefine who is a manager under the Labor Department’s salary provisions. Managers sometimes do not have the toolbox of leadership skills to be effective; and sometimes forget that they themselves may have been the lowest minimum-wage employee at one time* .Technology has changed; gone are the days of employees pacing themselves in big-box stores; Amazon’s partner warehouses track employees’ movements by the second, and use algorithms to get the maximal and most efficient use of the employee’s time.   “With slide rule and stopwatch our pride they have robbed”, goes a Dropkick Murphy song.
* It is notable that workers earning a tier above minimum wage tend to have the strongest opposition to increasing the minimum wage, since they worked for their payraise.

The author remains objective, and refuses to speculate on outside factors like immigration, including the effects of illegal immigration on wages. The rising tide did not lift all boats; greater demand for workers didn’t translate into increased earnings, as a classical economist would believe. This book was written at a time of abundance of low-wage jobs, a prospect which is finally returning after the last recession. Working within fragile transportation and social constraints, they live life on the edge. The book sparked a moral argument- whether it was right to ask someone to work for less than sustenance wages; and leaving workers in worse physical condition than when they hired them. Conservatives also questioned the wisdom of needing to indirectly subsidize low wages- provide corporate welfare- through public assistance. Our gleaming, post-industrial cities rely on a large army of working-class people to serve. How are we serving them?

Two years ago, I bought wholeheartedly into the idea that changes in the economy demanded “a new relationship of empowerment” between employers and employees. That was a nice code phrase for reducing the power of labor unions, especially used in the right-to-work debate. I am more wary of the statement now, demanding to see concrete examples of how decent workers will benefit. I’d like to humble myself and tell my relatives, “you were right”.  

Twenty years after welfare reform, what happened to the New Democrats? They brought the Northeast back to the Democratic Party. But their days became numbered when the ends justified the means. Feminists knew that the affair between Bill Clinton and Monica Lewinsky was unsavory, but they had larger goals in mind, like defending abortion. Likewise, I feel that liberal supporters of the Democratic Party are too willing to overlook troubles in the DNC, such as resignations under allegations, accusations of pay-to-play, and losing once-loyal union votes in the Midwest. While I believe in meritocracy, more than a few people have observed that there are “too many white septuagenarians in leadership positions”; in a party that is becoming majority-minority. Topics like environmentalism and social issues, favored by their donors, have received more detailed attention than topics that matter to their voters, like educational and employment opportunity. The DNC and media voices have encouraged playing it cautiously, because “there is too much at stake”.  One progressive commentator wrote an article titled “Bernie Sanders is a Privileged Choice”, arguing that the poor could lose everything if Bernie failed to win the general election. The language of political correctness was limiting their political options. But with the exception of 2012, the DNC has had eight straight years of losses. Even if “local races don’t matter”, losing the winnable presidency may be a wake-up call to change strategy.  In contrast, the turmoil in the Republican Party- from losing Congress in 2006 to the anti-establishment Tea Party movement- created a party that is more libertarian and less neocon than eight years ago; and a party that wins wide across the map, and deep in the “red” states. Nixon’s Southern Strategy and this year’s Midwestern Strategy were gambles that paid off. Murdoch and Akin in 2012, that was a bad choice. They should never do that again. That’s all of my political screed.