America’s labour no longer content with business as usual political platitudes
The guys who change the toilet refuse on private jets landing at Palm Beach International Airport in Florida earn US$12 per hour, while the guys who move these $100 million aircraft in and out of their hangars earn only $1 more at $13 an hour.
This provides almost no incentive for the refuse workers in Palm Beach to train-up so they can be promoted to valet park these expensive airplanes owned by the rich and famous, including Donald Trump and Michael Jordan.
“Why the heck would I do that? I do my 8 hours and go home!” one of the workers at the Florida private airport said.
In either case, neither $12 nor $13 an hour represents a living wage according to those earning it, and this is a frustration echoed across America where employers benefit from an indirect corporate welfare system that compels employees to supplement their hourly wages with welfare handouts and government aid programmes.
It’s poor-paying jobs, not unemployment, that strains the welfare system. That’s one key finding from a study by researchers at the University of California, Berkeley, that showed the majority of households receiving government assistance are headed by a working adult.
The study found that 56 per cent of federal and state dollars spent between 2009 and 2011 on welfare programmes — including Medicaid, food stamps and the Earned Income Tax Credit — flowed to working families and individuals with jobs. In some industries, about half the workforce relies on welfare.
Tour de Route 66
It is this under-utilisation of labour and what now appears to be institutionalised flat income levels that is driving a great deal of the anger fermenting on the US presidential election campaign trail. As it turns out, these are also the two key data points that the US Federal Reserve is monitoring as they debate when and how fast to raise interest rates, which could come again as early as this week with the Fed meeting on Tuesday and Wednesday.
After pushing through a landmark rise in short-term interest rates in December, Fed Chair Janet Yellen has since spelt out a cautious approach to monetary policy as a result of concerns about Chinese growth and low US inflation expectations.
While the macro stats show the US economy at being close to full employment, the numbers of barking crowds at Trump and Sanders rallies over the last 6 months would indicate that while many may fit the definition of being employed they are still struggling and will no longer be content with business as usual political platitudes.
The Republican Party presumptive nominee Donald Trump’s battle cry for tackling this conundrum is to “Make America Great Again”, while the Democratic pall-bearer Hillary Clinton has been reassuring all that she is “Fighting for Us,” while Bernie Sanders has just gone public with a new slogan that may signal his next direction will be to bow out of the race with “The Struggle Continues”.
The successful candidate will have to forge a way through the ‘Why the Heck’ frustration of unskilled labour. On the ground you can feel the classic great American service mentality hardening, with rare smiles available at the counters of the hourly wagers — ‘have a nice day’ replaced by ‘I serve you only as much as I have to’.
Hillary Clinton, who this week became the first woman ever in the 240-year history of America to emerge as the presumptive nominee for one of the country’s two major political parties, would do well to dust off the playbook from her husband’s first run for the White House a quarter century ago which was built on the back of a strategy focused on “It’s the Economy, Stupid!”
Sean Evers is managing partner at Gulf Intelligence.
Sean Evers’ agenda:
He is on the Tour de Route 66 in the United States. He is on the road across America to get the pulse of the US in this noisy election year and to garner insights on what it all could mean for the Middle East – from economy in New York City, to geopolitics in DC, to the Blue Ridge Mountains of Virginia and even driving through the Dakotas to get first-hand the health of shale oil frackers. Follow the tour on Twitter @sean_evers #giroute66
Sean Evers’s Bio:
He is an energy industry specialist with more than two decades of experience in the global oil and gas markets. Evers is founder and managing partner of Gulf Intelligence, a strategic communications consultancy and energy think tank based in the Middle East. His journey in the oil markets began in mid 1990s as the Financial Times Cairo correspondent. In 1997, Evers helped to open up Bloomberg in the Middle East where he spent the following decade as bureau chief from Cairo to Tehran, culminating in 2008 in Dubai being designated as the company’s fourth global hub. He attained a BA in politics & economics from the University of Notre Dame in Indiana in 1988, and went on to secure his LLB law degree at the National University of Ireland, Galway.
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Updated: June 12, 2016 04:00 AM