Soft Heads Need Harder Hearts

By Gene Epstein

Using fiery prose, John Stuart Mill said it best in his 1848 treatise, Principles of Political Economy: "...if the institution of private property ... carried with it as a consequence, that the produce of labour should be apportioned as we now see it, almost in inverse ratio to the labour -- the largest portions to those who have never worked at all, the next largest to those whose work is almost nominal, and so in a descending scale, the remuneration dwindling as the work grows harder and more disagreeable, until the most fatiguing and exhausting bodily labour cannot count on ... being able to earn even the necessaries of life ..." Well, then, he concluded, "all the difficulties, great or small, of Communism would be as dust in the balance."

… we've since learned that all the promises, great or small, of communism are the curse of working people everywhere. (Even Mill went on to equivocate about this point in the very same paragraph.)

But the sting of that rolling rhetoric remains. The "inverse ratio" to which Mill was referring does feel unjust. Some of this moral passion drives the living-wage movement, which scored a special triumph in Santa Monica, California, last week with the passage of a city ordinance requiring that local businesses catering to tourists pay workers at least $10.50 an hour… for the most part, economic reasoning gets treated as mere dust in the balance when low-wage work becomes the hot topic.

As a case in point, consider the recently published Nickeled and Dimed: On (Not) Getting By in America, by the popular magazine and book writer Barbara Ehrenreich. To research the lives of low-wage workers, Ehrenreich did the gutsy and highly appropriate thing: In the tradition of George Orwell, and at the age of 50-plus, she took three successive jobs: as a waitress, a cleaning woman and a WalMart salesperson. She portrays the hassles, privations and indignities of that life with engaging vividness…

So it seems churlish to call Ehrenreich a shoddy thinker and even at times an unreliable reporter. Churlish, but necessary. For the message of her work is loud and clear: Working for chump change is a sucker's game, not the sort of activity calculated to better one's lot in life, and the guilt-ridden media has been accepting that thesis without challenge.

…

But work is virtually the only ticket out of poverty that capitalism ever offers, or ever has offered. And while … she finds no evidence of upward mobility among low-wage workers, … the Economic Policy Institute, the very source she cites several times, grudgingly admits in a report on wage trends, that "most workers … were promoted, changed employers or experienced other job changes that were often accompanied with a pay increase."

It turns out that those pay increases are surprisingly large, although not of the get-rich-quick variety. In a recent study called "Wage Progression Among Less-Skilled Workers," Northwestern University labor economists Tricia Gladden and Christopher Taber used data from the National Longitudinal Study of Youth to track the pay of high-school dropouts and graduates over 10-year periods. Over the decade-and-half they covered, 1978-93, … they … found, for example, that among African-American women, the average annual wage increase, in return for continuous work, ran 5% over the rate of inflation.

As Professor Taber explained to me, since these workers were essentially progressing up an income ladder, that 5% is independent of whatever gains get bestowed on any particular rung of the ladder. So add the 3% real annual gains that a tighter labor market has recently been bringing and you find that a person making $10 an hour or less can more than double her real income in 10 years. Accordingly, Gladden and Taber draw the corny inference that "we should encourage low-skilled workers to work."

Toward the end of her book, Ehrenreich reports that she … was … "amazed and sometimes saddened by the pride people took in jobs that rewarded them so meagerly." Given the prospects that work in America offers, I'm not saddened to read what she found.