Rebuilding the American middle class

When you consider that the United States is the richest country in the world, the state of its working class is shocking.

The country now has the highest proportion of low-wage workers in the developed world. Fifty-two percent of fast-food workers’ families receive public assistance in an industry that last year earned $7.44 billion in profits. McDonald’s workers alone receive $1.2 billion in welfare every year. One Wisconsin Wal-Mart costs American taxpayers at least $1-million a year in public assistance to workers’ families even though six members of the Walton clan, owners of Wal-Mart, are as wealthy as 48 million Americans combined. Another Wal-Mart organized a charitable food drive for its low-paid employees, and McDonald's suggested employees sell possessions on eBay to raise money for Xmas.

One in three bank tellers receives public assistance, despite working in one of the country's most profitable and privileged industries. Sixty percent of able-bodied, adult, food-stamp recipients are employed. Since 2000, the American middle class has shrunk in size, suffering reduced income and wealth. Income inequality is the largest since before the Great Depression.

This wasn't always the case, of course. At one time, most American workers were consumers who could afford everything they needed and a lot of stuff they didn't. They were the envy of the Western World. This elevated status didn't come about by accident. At the turn of the twentieth century, they were working for little more than subsistence wages, rather like so many are today. What happened was organized labour. Collective bargaining and union wages transformed low-wage workers into a middle class.

Corporate power and globalization are now transforming that middle class back into a subsistence workforce. Organized labour, like the welfare state, is confined to national borders, but corporations now operate globally. And American corporations are doing just that, shipping millions of high-paying, blue-collar, union jobs off to China, safe from the democratizing influence of organized labour. Those jobs have been largely replaced by retail jobs—including the infamous "McJobs" of the fast food industry.

At one time, these jobs were held largely by students earning pocket money or a little something extra to help with their education. But now, many people are faced with relying on these jobs full-time for life (the average age of low-income workers is 35). Part-time jobs have become careers. Unorganized, they are isolated and entirely at the mercy of their employers, and that means what it always has—they will struggle to get by while their employers enjoy incomes that can only be described as opulent.

American workers, however, are no longer accepting this one-sided arrangement quietly. They are fighting back. This year, fast-food workers in dozens of cities across the U.S. engaged in demonstrations, work-stoppages and strikes demanding a federal minimum wage of $15 an hour, paid sick leave and the right to unionize.

A dramatic increase in the minimum wage would be a huge help for low-income workers, but the only long-term guarantee of fair treatment in their workplaces is a union. Rebuilding the American middle class means rebuilding the American labour movement. Just as organizing blue collar workers a century ago made the American middle class, organizing service workers today is the means of rebuilding the American middle class.

And this is something Canadians need to watch closely. Our unions, too, have been under assault and low-wage work is becoming more of a standard here as well. If we want to maintain our middle class, we had best defend our unions.