BILL MOYERS: Listening to those workers, I couldn't help but think about Henry Moyers, my father, who dropped out of school in the fourth grade because his family needed him to pick cotton to help make ends meet. The Great Depression knocked him down and almost out, and he struggled on one pittance paying job after another, until finally, late in life, he had a crack at a union job. His last paycheck was the most he'd ever taken home in a week, $96 and change and he was proud of it. He said that job was the best he'd ever had.
I saw then how union struggled to preserve the middle class, and can make the difference between earning a living wage and being part of the working poor. Few have documented this struggle as thoroughly as columnist and author Holly Sklar, who's with me now. She co-authored Raise The Floor: Wages And Policies That Work For All Of Us, which looks closely at what it really takes to make ends meet in America.
Holly Sklar is also Director of Business for Shared Prosperity, an organization of business executives and investors, dedicated to our economy's long-term success. Holly Sklar, welcome to the Journal.
HOLLY SKLAR: Wonderful to be here.
BILL MOYERS: What did you think watching those workers in California?
HOLLY SKLAR: I thought it was just a fascinating piece and a very moving piece, and also a really good introduction to the reality that people are living today. You know, the man is beginning, Jaron Quetel—
BILL MOYERS: Jaron Quetel.
HOLLY SKLAR: Yeah, $30,000 a year. You know, that's more than twice what the minimum is wage is scheduled to be in 2009. I mean, so he's a little bit under the average wage, but he's way over what other people are making today, and he can't make ends meet. And that's the reality for a growing portion of our workforce today.
BILL MOYERS: I read just the other day that a couple with two children has to work approximately three full-time minimum wage jobs just to make ends meet.
HOLLY SKLAR: That's right. So, people don't make ends meet. So what they do is, they're constantly trading off. You know, they're going to food banks to feed their children, you know. We've been living the American dream in reverse.
BILL MOYERS: Reverse?
HOLLY SKLAR: In reverse.
BILL MOYERS: What do you mean?
HOLLY SKLAR: Our wages now adjusting for inflation, average wages are lower than they were in the 1970s. Our minimum wage, adjusting for inflation, is lower than it was in the 1950s, and why is it? One of the things going on is that income and wealth inequality have gone back to the 1920s. We are back at levels that we saw right before the Great Depression.
BILL MOYERS: But, during this time, the economy's been growing. Why aren't workers sharing in the prosperity that they've helped create?
HOLLY SKLAR: Well, that's exactly the problem. It used to be that when productivity went up, wages went up. Worker—
BILL MOYERS: You work harder, you got more of the results.
HOLLY SKLAR: You got the fair day's pay for the fair day's work, you got more results. You shared in the rise and work of productivity. Now, almost all the rise and work of productivity is going not just to the upper class, but to the very top of the upper class. So, we have had a great redistribution of income and wealth in this country in the last three decades. The problem is that redistribution of wealth and income has been going up to the very top. And most people have even been treading water, or going behind. And often working for many, many longer hours to keep up with the living standards.
BILL MOYERS: Is it true that about 80 percent of our workforce in this country make their living from hourly wages?
HOLLY SKLAR: They do. And that's when we refer to average workers, that's usually what we mean. We mean people who are, you know, in production, non-supervisory workers and they're, when I say average workers are making less, in real terms, in what they can buy, than they were able to in the 1970s, it's just shocking. And we are told often that we have to do this in order to make our country more competitive in the global economy. You know—
BILL MOYERS: We need to be leaner—
HOLLY SKLAR: Yeah, exactly—
BILL MOYERS: Yeah, leaner and meaner—
HOLLY SKLAR: Leaner and meaner, but we will all be better off in the long run, we're gonna get more educated and so on. Well, here's the problem. We haven't been making our country more competitive. We've been actually driving it into the ground. Essentially, people at the top have essentially been you know, like they're corporate raiders, essentially raiding the whole country, milking it like a cash cow, is what's been going on and driving the economy into the ground. We have unprecedented debt to other countries.
You know, we have an infrastructure that was built by the tax dollars of prior generations, basically, that is now crumbling. We're not even paying to modernize for the global economy, we don't have a world class infrastructure anymore.
We have research and development that we're spending less on, proportionately. We have an education system that's lagging further and further behind. So the idea that we're getting more competitive for the global economy is ridiculous, that's a myth.
BILL MOYERS: Why aren't we in the streets? Why isn't there real indignation?
HOLLY SKLAR: Well, one of the things that happened, you know, if we go back to 1980, the 1980s—the two longest periods where we had without a minimum wage increase, have both taken place since 1980. And so, one of things that went on in the 1980s was, remember early on in the Reagan administration, PATCO, the air-traffic controllers union went on strike. And Reagan, essentially said, "You're fired, goodbye," broke the union. You know, and this was really quite unprecedented and set, a real green light to union busting.
Where it became normal to replace striking workers, not even just temporarily while they were out on strike, but basically saying your jobs are gone. And so one factor has been the decline of union strength relative to the workforce.
BILL MOYERS: There are plenty of studies which show, it wasn't just my father's anecdote, but there are plenty of studies that show that as unions increase their share of the economy, they bring other people who are not in unions up with them, they raise the wage standards for a lot of other people too, right?
HOLLY SKLAR: They do, absolutely. And the other factor is, that if people are afraid to lose their job, whether they're trying to unionize, or you're in a union, but you don't want to ask to much, or threaten companies threatening to outsource. But if you're in a situation which everybody's scared to lose their job before, and now you add on in recent years, terrified to lose their job because if they have health insurance through their job, and of course many workers don't, but those that do, terrified to lose their job. It's a much harder context in which to ask for higher wages.
BILL MOYERS: But, what does it say to you about politics, that instead of jobs to keep people out of poverty, we now have jobs that drive people into poverty. And the political system accepts that?
HOLLY SKLAR: Accepts it, that's exactly the problem. Now, the minimum wage sets the floor. When the government basically allows the minimum wage to become not just a poverty wage, but a desperately poor wage, it sends a big signal. Because if the minimum wage is down, then we, in quicksand, really, it's dragging down wages above the minimum as well.
The minimum wage in 1968, if you adjust it for inflation, was $9.88. Why does that matter? Well, today, if you're an entry-level worker at, you know, our two biggest employers, Wal-Mart and McDonalds, you're not making $9.88 to start, you're making well below that. If the minimum wage was still at $9.88 or above, you know, it should certainly be above that now, but it's not—
BILL MOYERS: What is it—
HOLLY SKLAR: $5.85.
BILL MOYERS: Now?
HOLLY SKLAR: Yeah, $5.85 an hour. In July, it's gonna go up to $6.55 an hour. You know, so it's still gonna be—
BILL MOYERS: So the people earning minimum wage are earning less than they would have 40 years ago?
HOLLY SKLAR: Oh, much less than they would have in terms of buying power.
BILL MOYERS: And you also say that they're actually subsidizing employers, stockholders, and consumers. Explain that.
HOLLY SKLAR: Well, they are, because, basically you are working, and you are creating value for the company, for the shareholder, whatever. And a much bigger portion of that is going to the very top of the corporation, say, the top five executives. To the owners, to the shareholders, and is not being in any way fairly shared with workers. And so, you know, you have situations where you have company executives have basically doubled their shares, company net revenues you know, in the last decade—doubled it.
What really happened is, so much is being absorbed up at the top. Just a level of extreme, almost pathological greed.
BILL MOYERS: We have the greatest spread of inequality, I believe, of any industrialized country in the world--
HOLLY SKLAR: We have the greatest spread of inequalities in industrialized countries, we have the highest rates of poverty and this idea that we're making ourselves more competitive for the world economy, in other industrialized countries, they're making themselves more competitive in part by, they've had raises at the bottom go up, not down, they've raised their level of math and science literacy, we've gone the other way. They've built out their infrastructure. They have much lower gap between CEOs at the top, and the workers at the bottom. They just don't tolerate it.
BILL MOYERS: Holly, what are the practical consequences of this word we hear banded about a lot, inequality? What does it mean actually to society?
HOLLY SKLAR: Well, it means a couple things. One is that in our very wealthy society, with so much wealth concentrated in so relatively few hands, we can have a situation where 39 other countries in the world, have lower child mortality rates than us. So, one of the consequences more children die here, preventable deaths. We have lower life expectancies than many other countries in the world.
A lot of Americans don't realize this. That's one of the consequences of inequality. That's one of the consequences of lack of universal health care, which relates to inequality.
BILL MOYERS: Do you think we're at some kind of breaking point? Because some people just say, "Well what's happening right now is the market adjusting itself, correcting itself."
HOLLY SKLAR: Well one of the reasons we're at a breaking point now, is one of the things that people did to cover up the real fall in real wages, was they maxed out their work hours, they maxed our their credit cards, and they maxed out their home equity loans.
And so we don't save, there's a level of debt that people were using, not to take a vacation, not to put their kids through college, although of course people go into debt for that. But, they were using it in many cases to just maintain a basic living standard. You know, make ends meet, going into debt to do that. Well, that's all maxed out now, the mortgage crisis cascading into the housing and the financial crisis has showed that that's just, you know, now running off a cliff basically. It's not sustainable, you can't do that.
So, the question is what are you gonna do as Americans wake up to the fact that really, we have this growing workforce of poverty wage workers, you can't even pretend to have the illusion that we're really a middle class country.
So, the breaking point is also climate change, of course. We have to green the economy in order to survive as a country, and in the world today. If you don't do it, it's a disaster for us and for the world. If you do do it, it's a breaking point in the sense that it's actually gonna be used to jumpstart the economy in a good way.
BILL MOYERS: Your group includes business people, who are working to bring about some changes. Tell me what are some of the changes you and your colleagues think we could make happen?
HOLLY SKLAR: Well, we need a few things. One is, raise the minimum wage. Raise the floor. Set a green light in a different direction, and the green light is, raise wages, fair wages. The other is universal health care. Get to universal healthcare.
BILL MOYERS: Because?
HOLLY SKLAR: Because—one, because something like 18,000 people die from lack of health insurance every year. Two, it's really destroying a lot of small businesses in the sense that they know they want to give health care to their workers but they are in a situation where they just are paying. I mean, it's just become astronomical. It's like a giant shift from, you know, from one person and from one business to another.
BILL MOYERS: It's encouraging that your organization has a lot of small business people, and others working for—what is your mission? What are you trying to do?
HOLLY SKLAR: The mission is to say that we can change direction. In other words, that what's really good for business, what's really good for business is also what's good for workers, and good for communities, and good for the country. That instead of this kind of low-road path we've been on, which is low wages for workers, low taxes, lower taxes for the wealthy, reckless deregulation, irresponsible disinvestment in our infrastructure and so on, instead of that we can go to a higher road, where we're shoring up the economy from below, and we're doing long-term sustainable developments, smart development, that we need for long-term success.
Now, this is not only what's good for us today, it's what's good for us in the future, and it's exactly what will make us more healthy and competitive in the economy in the long run.
BILL MOYERS: Holly Sklar, thank you very much for joining me.
HOLLY SKLAR: Thanks for having me.