[Mb-civic] The new proletariat - Robert Kuttner - The Boston Globe

[William Swiggard]

The new proletariat

By Robert Kuttner  |  August 31, 2005

THIS LABOR DAY, wage-workers have little to celebrate. Though 
unemployment is down, job insecurity is up. Health and pension benefits 
are dwindling. Weakened worker bargaining power is reflected in flat 
earnings.

According to a new report from the Census Bureau, real wages of fulltime 
workers fell 2.3 percent for men and 1 percent for women between 
2003-04, and median family income declined by $1,669 since 2000. 
Productivity is up 15 percent, but gains have gone to profits, not wages.

The Economic Policy Institute calculates that the median hourly wage, 
$16.13 in July 2005, is right where it was in November 2001, when the 
current recovery began. Adjusted for inflation, the median wage back 
then was $16.15.

One group of workers is particularly hard-hit by multiple trends -- the 
young.

The young are less likely to have jobs with decent health insurance. If 
they have pensions at all, they are typically plans at risk for 
stock-market fluctuations; they are far less likely to have defined 
benefit pensions whose payouts are guaranteed.

The young have not just lower wages but lower career horizons. Union 
workers, who enjoy higher average wages, tend to be in their 40s and 
50s. When these workers retire or are laid off, either the jobs vanish 
or their successors typically get lower wages. Even some union contracts 
have settled for two-tier wage systems, with much lower pay scales for 
newcomers performing the same work.

Job prospects of the young are only the beginning of their pocketbook 
challenges. Today's average four-year college graduate has over $20,000 
in loans, whose payments cut into disposable income. That figure has 
nearly doubled in a decade.

The real estate boom has been great for homeowners, but terrible for 
young families trying to buy in. Homeownership rates among 25- to 
34-year-olds declined from 51.6 percent in 1980 to 45.6 percent in 2000. 
Hard pressed young people purchasing homes are more likely to reduce 
payments with adjustable-rate mortgages or interest-only loans. These 
financing mechanisms, however, put them at grave risk of getting slammed 
when the housing bubble pops.
http://www.boston.com/news/globe/editorial_opinion/oped/articles/2005/08/31/the_new_proletariat/
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