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Coronavirus is Bad News for America's Working Class

Updated on August 1, 2020
Source

The Minimum Wage Problem

America’s low wage workers are being left behind. In America today, workers who earn the federal minimum wage have an average of $6,800 less per year to spend on food, rent, and other essentials than they did 50 years ago (Cooper). According to Sharon Parrot, senior vice-president at the Center on Budget and Policy Priorities, “when people live paycheck to paycheck, it’s not that they’re managing their money poorly…instead, their housing costs are taking up a disproportionate share of their incomes" (Griswold). For low or minimum wage workers, missing only one or two days of work can mean struggling to afford food or rent for a month or longer. And as of this year, forty percent of Americans don’t have four hundred dollars cash to spare in an emergency (Griswold).

Real median rent saw a dramatic increase between 1960 and 2014.
Real median rent saw a dramatic increase between 1960 and 2014. | Source

Poor in a Pandemic

Since the start of the pandemic, disgruntled essential workers have been forced to work on the front lines with little to no extra compensation in the form of hazard pay. The majority of these workers don’t have the option to quit – they have no savings and wouldn’t qualify for unemployment even if they feel unsafe performing their job duties. Now, with rumors spreading that people make more on unemployment than previously at their jobs, the administration has successfully pitted the working class against each other as embittered essential workers put their lives on the line to bag your groceries for eight bucks an hour.

Since the start of the pandemic, the working class has been expected to put their lives on the line to carry the burden of stimulating the economy by either working to keep essential businesses open, or spending their meager wages to help keep the economy afloat. The extra $600 in weekly unemployment compensation helps to maintain a level of consumer spending that prevents the U.S. economy from total collapse. By comparison, the average median wage in the first quarter of 2020 was $957 per week, and the annual salary of a rank-and-file member of Congress is $174,000 (roughly $3,300 per week) (Strand).

Nicole Ferrari, a single mother of four who owns her own business, wanted to apply for a small-business loan through the Paycheck Protection Program. When she spoke to a customer service representative, she was informed that the loan program was out of money – the same loan program that gave assistance to Ruth’s Chris and Shake Shack (Griswold).

Disdain for the Working Class

If the thought of poor people on unemployment insurance making enough money to live makes your stomach churn, perhaps you are looking at the wrong side of the problem. According to the Bureau of Labor Statistics, the federal minimum wage was equivalent to $10.90 per hour in 1968 (compared to a meager $7.25 per hour today). In real terms, the minimum wage is more than thirty percent lower than it was fifty years ago. Meanwhile, the median price for a home in the U.S. is now $199,200 – up from $47,200 and $119,600 in 1980 and 2000, respectively (Martin).

Working a minimum wage job also means that your hours are often not guaranteed. For example, servers might get cut early if there’s not enough business at the restaurant that day. If it happens once a week or more, you might struggle to pay your bills on time that month. And you can forget about saving for retirement or emergencies. According to Yahoo Finance, 58% of Americans have less than $1,000 in savings, in large part due to the fact that minimum wage increases are disproportionate to the cost of living in the U.S. (Huddleston).

History of the U..S. minimum wage. In 1968, the federal minimum wage was worth nearly $11/hour in today's money.
History of the U..S. minimum wage. In 1968, the federal minimum wage was worth nearly $11/hour in today's money. | Source

A Strong Middle Class Drives Growth

A thriving middle class is a prerequisite for economic growth, entrepreneurship, and innovation. A strong middle class is a source of trust, increasing efficiency in business transactions, and provides protection against credit booms and busts. Former President Barack Obama once stated that “when middle-class families can no longer afford to buy the goods and services that businesses are selling, it drags down the entire economy from top to bottom…that’s why a CEO like Henry Ford made it his mission to pay his workers enough so they could buy the cars they made” (Madland). A higher minimum wage benefits everyone in the economy, including small businesses, corporations, and the upper class.

An economy that is top-heavy in wealth is not good for anyone, and inequality is responsible for some of the biggest problems threatening American’s quality of life today including home foreclosures, high unemployment, and lack of upward mobility. Increasing the minimum wage is key to reversing decades of downward pressure on the working class. The Raise the Wage Act of 2019 was recently passed by the U.S. House of Representatives, which would raise wages for a total of 33.5 million U.S. workers (Cooper).

References

Cooper, R. (2019). Labor Day 2019: Low-wage workers are suffering from a decline in the real value of the federal minimum wage. Retrieved August 01, 2020, from https://www.epi.org/publication/labor-day-2019-minimum-wage/

Griswold, E. (2020). How the Coronavirus is Killing the Middle Class. Retrieved August 01, 2020, from https://www.newyorker.com/news/dispatch/how-the-coronavirus-is-killing-the-middle-class

Huddleston, C. (2019, May 15). 58% of Americans Have Less Than $1,000 in Savings, Survey Finds. Retrieved August 01, 2020, from https://finance.yahoo.com/news/58-americans-less-1-000-090000503.html

Madland, D. (2013, February 20). The Middle Class Grows the Economy, Not the Rich. Retrieved August 01, 2020, from https://www.americanprogress.org/issues/economy/news/2011/12/07/10773/the-middle-class-grows-the-economy-not-the-rich-2/

Martin, E. (2017, June 23). Here's how much housing prices have skyrocketed over the last 50 years. Retrieved August 01, 2020, from https://www.cnbc.com/2017/06/23/how-much-housing-prices-have-risen-since-1940.html

Strand, M., & Lang, T. (2019, September 09). How Much do Members of Congress Get Paid? Retrieved August 01, 2020, from https://www.congressionalinstitute.org/2019/02/21/how-much-do-members-of-congress-get-paid-2/

Comments

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    • Mariah Bruce profile imageAUTHOR

      Mariah Bruce 

      6 weeks ago from Portland, OR

      Vikram thank you for sharing your thoughts about my article! Yes I agree, we assume prosperous countries have it all, but truthfully a lot of wealthy countries don’t use that money to help the people as they should. I believe capitalism is a huge factor as well.

    • Mariah Bruce profile imageAUTHOR

      Mariah Bruce 

      6 weeks ago from Portland, OR

      Thank you for reading Miebakagh! It’s true there is so much inequality in this world....I do believe each person in the world should have access to food, shelter, and medicine... it is not something “earned” with hard work.

    • Miebakagh57 profile image

      Miebakagh Fiberesima 

      6 weeks ago from Port Harcourt, Rivers State, NIGERIA.

      I agreed. The pandemic is no respector. Much thanks.

    • talesofvikram profile image

      Vikram Brahma 

      6 weeks ago from Assam, India

      My friend, after reading your article I have understood that it doesn't matter whether you are from India or Russia or from the USA. Actually, the pandemic is bad for any country. I use to think big and prosperous countries are doing well. But yes, the situation is the same around the world. Thanks for sharing the article.

    • Mariah Bruce profile imageAUTHOR

      Mariah Bruce 

      6 weeks ago from Portland, OR

      Thanks for the thoughtful comments.

      Here in the Portland Metro where I live, the minimum wage is $13.25/hr. Admittedly, it has been a pretty rapid increase the last few years, but it's not nearly enough to cover how expensive it is to live in Portland. A quick google search tells me the average rent here is $1,500/month...sounds about right...

      Almost half (21/50) states have a minimum wage of $7.25/hr. That is inhumane to me. Especially with the pandemic happening, these people are our essential workers!! Crazy.

      It is sickening to me that a congressperson who makes $3,300 per week thinks that $600 per week for the "peasants" is too much. Us peasants that are expected to keep the economy afloat while they stay fat and happy as usual!

      Thanks again for reading!

    • Miebakagh57 profile image

      Miebakagh Fiberesima 

      6 weeks ago from Port Harcourt, Rivers State, NIGERIA.

      The article make me to brainstop. Americas' working class is not fairing better pandemic or not. A higher minimum wage to increase purchasing power, ability to save regularly, and half of a year's pay as holiday bonus will resolved poverty. Thanks.

    • Mr. Happy profile image

      Mr. Happy 

      7 weeks ago from Toronto, Canada

      "For low or minimum wage workers, missing only one or two days of work can mean struggling to afford food or rent for a month or longer." - Ya ... I don't think many people realize this. I often hear the "they don't know how to save" comment and have to respond with: "What the @#$% are You gonna save when You need every penny You earn, to make it through the month? There is nothing to save."

      "And as of this year, forty percent of Americans don’t have four hundred dollars cash to spare in an emergency (Griswold)." - We'll see this manifest in a very real way by the end of the year.

      "bag your groceries for eight bucks an hour" - Is that what people make down there? $8 an hour? Tell me that isn't real? ffsk

      "the annual salary of a rank-and-file member of Congress is $174,000 (roughly $3,300 per week) (Strand)" - It's okay. We'll eat the rich soon. Might even re-introduce the guillotine.

      "$7.25 per hour today" - So, it's even less than $8?!? Wow ... wow ... just wow. It's bad down there, huh? Am I ever glad my parents immigrated to Canada lol

      "A higher minimum wage benefits everyone in the economy, including small businesses, corporations, and the upper class." - "The upper class" doesn't give two You know what. Mr. Greedy aka Jeff Bezos doesn't care. Billy-boy (Bill Gates) doesn't care. Does the stuck-up, snobby Queen of England care? The rotten Koch Brothers never gave a #$%^ either. Only one of them left and he still doesn't care. Does Rupert Murdoch, the "Crypt Keeper" care? Not a chance. I can go on but I am sure You get the idea: we've reached a point in history once again, where we have "aristocracy" and "peasants", more or less world-wide.

      Good article. Keep up the good fight. Cheers!

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