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My Life in the New American Minimum Wage Economy

After getting driven out of my job by the State Department, I found myself looking for part-time positions in retail.

| Thu Apr. 24, 2014 6:29 PM EDT

Working to Be Poor

So how do you live on $50 a week, or for that matter, $270 a week? Cut back? Recycle cans?

One answer is: you don't live on those wages alone. You can't. Luckily I had some savings, no kids left in the house to feed, and my wife was still at her "good" job. Many of my co-workers, however, dealt with the situation by holding down two or three minimum-wage jobs. Six hours on your feet is tough, but what about 12 or 14? And remember, there are no weekends or holidays in most minimum-wage jobs. Bullseye had even begun opening on Thanksgiving and Christmas afternoons.

The smart workers found their other jobs in the same strip mall as our Bullseye, so they could run from one to the next, cram in as many hours as they could, and save the bus fare. It mattered: at seven bucks an hour, that round trip fare meant you worked your first 45 minutes not for Bullseye but for the bus company. (The next 45 minutes you worked to pay taxes.)

Poverty as a Profit Center

Many low-wage workers have to take some form of public assistance. Food stamps—now called the Supplemental Nutrition Assistance Program, or SNAP—were a regular topic of conversation among my colleagues. Despite holding two or three jobs, there were still never enough hours to earn enough to eat enough. SNAP was on a lot of other American's minds as well—the number of people using food stamps increased by 13% a year from 2008 to 2012. About 1 in 7 Americans get some of their food through SNAP. About 45% of food stamp benefits go to children.

Enjoying that Big Mac? Here's one reason it's pretty cheap and that the junk sold at "Bullseye" and the other big box stores is, too: those businesses get away with paying below a living wage and instead you, the taxpayer, help subsidize those lousy wages with SNAP. (And of course since minimum-wage workers have taxes deducted, too, they are—imagine the irony—essentially forced to subsidize themselves.)

That subsidy does not come cheap, either. The cost of public assistance to families of workers in the fast-food industry alone is nearly $7 billion per year. McDonald's workers alone account for $1.2 billion in federal assistance annually.

All that SNAP money is needed to bridge the gap between what the majority of employed people earn through the minimum wage, and what they need to live a minimum life. Nearly three-quarters of enrollments in America's major public benefits programs involve working families stuck in jobs like I had. There are a lot of those jobs, too. The positions that account for the most workers in the US right now are retail salespeople, cashiers, restaurant workers, and janitors. All of those positions pay minimum wage or nearly so. Employers are actually allowed to pay below minimum wage to food workers who might receive tips.

And by the way, if somehow at this point you're feeling bad for Walmart, don't. In addition to having it's workforce partially paid for by the government, Walmart also makes a significant portion of its profits by selling to people receiving federal food assistance. Though the Walton family is a little too shy to release absolute numbers, a researcher found that in one year, nine Walmart Supercenters in Massachusetts together received more than $33 million in SNAP dollars. One Walmart Supercenter in Tulsa, Oklahoma, received $15.2 million, while another (also in Tulsa) took in close to $9 million in SNAP spending.

You could say that taxpayers are basically moneylenders to a government that is far more interested in subsidizing business than in caring for their workers, but would anyone believe you?

Back in the Crosshairs

Some employees at Bullseye had been yelled at too many times or were too afraid of losing their jobs. They were not only broke, but broken. People—like dogs—don't get that way quickly, only by a process of erosion eating away at whatever self-esteem they may still possess. Then one day, if a supervisor tells them by mistake to hang a sign upside down, they'll be too afraid of contradicting the boss not to do it.

I'd see employees rushing in early, terrified, to stand by the time clock so as not to be late. One of my fellow workers broke down in tears when she accidentally dropped something, afraid she'd be fired on the spot. And what a lousy way to live that is, your only incentive for doing good work being the desperate need to hang onto a job guaranteed to make you hate yourself for another day. Nobody cared about the work, only keeping the job. That was how management set things up.

About 30 million Americans work this way, live this way, at McJobs. These situations are not unique to any one place or region. After all, Walmart has more than two million employees. If that company were an army, it would be the second largest military on the planet, just behind China. It is, in fact, the largest overall employer in the country and the biggest employer in 25 states. When Walmart won't pay more than minimum, it hurts. When it rains like that, we all get wet. This is who we are now.

I Was Minimum

It's time to forget the up-by-the-bootstraps fantasies of conservative economists bleating on Fox. If any of it was ever true, it's certainly not true anymore. There is no ladder up, no promotion path in the minimum-wage world. You can't work "harder" because your hours are capped, and all the jobs are broken into little pieces anyone could do anyway. Minimum wage is what you get; there are no real raises. I don't know where all the assistant managers came from, but not from among us.

I worked in retail for minimum wage at age 16 and again at 53. In that span, the minimum wage itself rose only by a few bucks. What changed, however, is the cast of characters. Once upon a time, minimum-wage jobs were filled with high school kids earning pocket money. In 2014, it's mainly adults struggling to get by. Something is obviously wrong.

In his State of the Union Address, President Obama urged that the federal minimum wage be raised to $9 an hour. He also said that a person holding down a full-time job should not have to live in poverty in a country like America.

To the president I say, yes, please, do raise the minimum wage. But how far is nine bucks an hour going to go? Are so many of us destined to do five hours of labor for the cell phone bill, another 12 for the groceries each week, and 20 or 30 for a car payment? How many hours are we going to work? How many can we work?

Nobody can make a real living doing these jobs. You can't raise a family on minimum wage, not in the way Americans once defined raising a family when our country emerged from World War II so fat and happy. And you can't build a nation on vast armies of working poor with nowhere to go. The president is right that it's time for a change, but what's needed is far more than a minimalist nudge to the minimum wage. Maybe what we need is to spend more on education and less on war, even out the tax laws and rules just a bit, require a standard living wage instead of a minimum one. Some sort of rebalancing. Those aren't answers to everything, but they might be a start.

People who work deserve to be paid, but McDonald's CEO Donald Thompson last year took home $13.7 million in salary, with perks to go. If one of his fry cooks put in 30 hours a week, she'd take in a bit more than $10,000 a year—before taxes of course. There is indeed a redistribution of wealth taking place in America, and it's all moving upstream.

I got lucky. I won my pension fight with my "career" employer, the State Department, and was able to crawl out of the minimum-wage economy after less than a year and properly retire. I quit Bullseye because I could, one gray day when a customer about half my age cursed me out for something unimportant she didn't like, ending with "I guess there's a reason why people like you work at places like this." I agreed with her: there is a reason. We just wouldn't agree on what it was.

I'm different now for the experience. I think more about where I shop, and try to avoid big places that pay low wages if I can. I treat minimum-wage workers a little better, too. If I have to complain about something in a store, I keep the worker out of it and focus on solving the problem. I take a bit more care in the restroom not to leave a mess. I don't get angry anymore when a worker says to me, "I really can't do anything about it." Now I know from personal experience that, in most cases, they really can't.

Above all, I carry with me the knowledge that economics isn't about numbers, it's about people. I know now that it's up to us to decide whether the way we pay people, the work we offer them, and how we treat them on the job is just about money or if it's about society, about how we live, who we are, the nature of America. The real target now should be to look deeply into the apartheid of dollars our country has created and decide it needs to change. We—the 99% anyway—can't afford not to.

Peter Van Buren blew the whistle on State Department waste and mismanagement during Iraqireconstruction in his first book, We Meant Well: How I Helped Lose the Battle for the Hearts and Minds of the Iraqi People. A TomDispatch regular, he writes about current events at his blog, We Meant Well. His new book, Ghosts of Tom Joad: A Story of the #99Percent, has just been published.

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