Income inequality? No surprises in Seattle
We all know the economy is booming throughout most of Western Washington. King County, in particular, is seeing growth. You take a drive through South Lake Union, downtown Seattle, around Bellevue, and you see cranes and development everywhere.
This is indicative of a changing economy — one that is adding jobs, which brings in development to build more housing and office space. That, in turn, brings even more jobs.
It’s a great cycle.
But as The Seattle Times pointed out Monday, so far, the economic boom is only helping a certain group of people — the wealthiest 5 percent.
The Times seems surprised. Activists are pointing to this as a huge problem.
But the truth is, this shouldn’t be a surprise to the Times and activists need to understand there is absolutely a problem: and they’re it.
The Times points out very dramatically that: “The state, as well as King, Snohomish and Pierce counties, has recovered the number of jobs lost in the Great Recession. But as the recovery rolls on, inequality is widening.”
The report points out that in Seattle, the top 5 percent of households saw earnings fully recover to pre-recession levels. The top 5 percent represents households making $230,000 or more.
But folks making less than $32,500, when the recession started, their incomes declined even further.
This isn’t shocking at all.
This is going to continue because, as we’ve talked about in the past, the labor market is changing. It’s changing drastically.
You have low-skilled jobs being automated, which will obviously have human beings as the losers in this fight. If you have low skills, you are becoming less and less important to a lot of businesses.
And now that you’ve put individual cities (rather than the whole state) on the path to $15 an hour, you’re making it even harder on people who have low skills to find work because you’re asking to be paid more than you’re worth to a company. So now, the employer will look for someone overqualified for the low-end job so they can do more than just the basics.
The economy is growing locally because of higher-skilled jobs being created.
Amazon.com is a huge reason this is happening. They’re fueling the local economy with jobs that pay a lot because they’re high skilled. Few people have the skills, and that means they can ask for more money.
And the data clearly backs that up.
The Times reports:
“Most of the jobs lost in the state between 2007 and 2013 paid less than $30 an hour, while the number of jobs paying $54 or more an hour saw big gains. That contrast was even more stark in King County, where jobs paying $54 or more an hour have soared.”
A lot of those lower paying jobs will not come back. They’re gone for good or they’re being consolidated so when there used to be two separate jobs demanding the minimum wage, they’re being turned into one job with more duties at a slightly higher minimum wage.
The ones closer to $30 will be phased back in, but the minimum wage jobs — they’re not coming back.
In Washington state as a whole, you see huge loss for jobs that paid under $12 bucks an hour. In King County, those jobs account for the biggest jobs lost category.
Now, there’s a couple ways to look at the data — and the way labor activists look at the data is not just the wrong way, but it’s the dangerous way. It’s dangerous because as a result, they’re putting people in bad places to adjust to the further evolution of the labor market in this state and in this country.
There’s no doubt that tech jobs pay a lot, right? We all agree and we encourage people to get into those jobs and learn those skills because they’ll succeed.
Well, what are the labor activists doing? They’re not encouraging more job skills. They’re not asking for funding for more scholarships to get students into programs that offer you a better shot at success in life; that’s not their main focus.
The main focus is increasing the minimum wage without increasing skills, without increasing how much work you’re going to take on; just more money for the same work. It’s work that doesn’t offer the value commensurate with the wage you’re asking for.
How do we know it’s not worth what you’re asking? You’re already being replaced by computers. The self-checkout kiosk at the grocery store is an example of that.
Safeway, QFC, and all these other places could have gone down the route of keeping humans on the checkout stands but instead, they put money in self-checkout stands. We’re doing the work now.
Same at movie theaters. I go to an AMC theater all the time and they have like 6-8 spots for humans to take ticket orders. No matter when I’ve gone, they almost never have more than 3-4 people working there. They have the computer kiosks that do the work for them. It’s faster for us and for them.
I remember having to wait in line at Blockbuster Music and Ticketmaster as a kid to buy concert tickets. I haven’t interacted with a human in the last five years when it comes to buying concert tickets. I do it all online.
These jobs are replaceable and they’re being replaced. Instead of seeing the writing on the wall, labor activists try to get you a higher wage when it won’t matter because you’ll be out of a job soon and that higher wage doesn’t mean anything.
But they’re not thinking far down the road because they have an immediate goal in mind, which is to get you more money, convince you to unionize, then collect the dues. That’s all they want.
Now, some businesses absolutely could give a damn about the workers. They will say and do anything to hurt people because they only care about the bottom line.
For me, I care about both, which is why I get so mad at labor activists who pretend like getting you a $15 an hour job will somehow help you.
It won’t. It’s going to make things worse. The only thing that helps is education: gaining more skills in the workforce so you can leverage those skills for another higher paying job that you actually earn.
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