Yves here. Activists and some US economists have criticized the extent and institutionalization of poverty among low wage workers by subjecting many employees to bare bones pay that requires them to get government subsidies like food stamps to survive. This pattern is tantamount to having social safety nets serve as transfer to companies via enabling them to pay what would otherwise be starvation wages. Now the UN has joined these rebuke by naming names and calling out Walmart, Amazon, and DoorDash as promoting extreme poverty in the US, even among the employed.
By Sonali Kolhatkar, an award-winning multimedia journalist. She is the founder, host, and executive producer of “Rising Up With Sonali,” a weekly television and radio show that airs on Free Speech TV and Pacifica stations. Her most recent book is Rising Up: The Power of Narrative in Pursuing Racial Justice (City Lights Books, 2023). She is a writing fellow for the Economy for All project at the Independent Media Institute and the racial justice and civil liberties editor at Yes! Magazine. She serves as the co-director of the nonprofit solidarity organization the Afghan Women’s Mission and is a co-author of Bleeding Afghanistan. She also sits on the board of directors of Justice Action Center, an immigrant rights organization. Produced by Economy for All, a project of the Independent Media Institute
Olivier De Schutter, the United Nations special rapporteur on extreme poverty and human rights, recently issued a scathing statement about the shameful state of the United States economy. On October 31, 2023, De Schutter called out several top private employers in the U.S., Amazon, Walmart, and DoorDash, for trapping their workers in a cycle of poverty.
He said, “Jobs are supposed to provide a pathway out of poverty, yet in all three companies the business model seems to be to shift operating costs onto the public by relying on government benefits to supplement miserably low wages.”
In a related letter to the U.S. government, De Schutter wrote, “Despite being one of the wealthiest countries in the world, the United States has a high rate of poverty among workers.”
Such public statements by the representative of a top international body ought to be a mark of shame for the U.S., which has historically marketed itself as being a place where people’s dreams come true.
In contrast to De Schutter’s rhetoric, the corporate media’s assessment is quite rosy, relying increasingly on the word “resilient” as a popular descriptor for the economy as a whole. According to the Financial Times, “The stunning resilience in the U.S. economy to date has stemmed from one primary force: consumer spending.” Economist Kathy Bostjancic, who was interviewed for the story, cited, “incredible job growth,” and lauded how “[b]alance sheets look in really good shape, stocks have generally performed really well.”
The U.S. government also sees nothing but cause for celebration. Officials at the Treasury Department on October 26, 2023, boasted how the nation’s economy this year “outperformed expectations along three key dimensions: growing economic output, labor market resilience, and slowing inflation,” and that the nation’s economic progress, “stands out across the globe.”
How to explain these striking contradictions in assessments between the United Nations and those of the corporate media and the U.S. government?
In short, evaluations by the U.S. media and politicians are based on corporate prosperity while the UN’s evaluation is based on individual prosperity.
If we look closely, there is a dissonance on display. We, the people, are being sold the lie that the values of the wealthy are the same as ours. But what’s on offer does not reflect reality.
Merriam-Webster defines the term “bait and switch” as “a sales tactic in which a customer is attracted by the advertisement of a low-priced item but is then encouraged to buy a higher-priced one.” It’s an apt phrase to understand the way in which mainstream economists, corporate media outlets, and many politicians promote the idea of stock values as something ordinary Americans should care about.
A year after dropping to a record low in 2022, child poverty in the U.S. more than doubled, partly as a result of COVID-19 related government benefits expiring. Additionally, median household income fell significantly. Economists rarely address such pesky details when celebrating the “resilience” of the stock market, preferring instead to focus on the fact that more people are employed, not whether their wages and benefits support a decent standard of living.
Occasionally there are stories that undermine the corporate narrative, such as an NBC story in March 2023, headlined, “Most people have jobs, but many are unhappy about their money.” But such coverage is the exception.
The story we are expected to internalize, in direct conflict with our own financial worries, is that we must be content with the nation’s financial status quo because stocks are performing well and corporate balance sheets look good.
There is another story, one that is consistent with individual bottom lines. “International human rights law recognizes a right to a living wage,” wroteDe Schutter. “Workers should be provided, at a minimum, with a ‘living wage,’ regularly adapted in accordance with costs of living.”
De Schutter’s assertion that Americans have the right to earn a living wage is one that rarely enters mainstream U.S. discourse. When people are denied their rights, they will rise up to claim them, and the recent surge in union activity and strikes is an indicator that growing numbers of people are seeing through the economic bait and switch.
The changing narrative on wealth inequality, wage stagnation, and economic health is reflected in the simple and direct message that United Auto Workers (UAW) president Shawn Fain regularly displays on his “Eat the Rich” shirt. UAW members are voting on major wage gains that their union won from the Big Three automakers after weeks of militant strike activity grounded in an entirely different set of values than those that frame a rosy economic outlook.
The phrase “Eat the Rich” has its origins in the French Revolution and the anger of the poor aimed at 18th-century aristocracy. The quote, “When the people shall have nothing more to eat, they will eat the rich,” is attributed to French philosopher Jean-Jacques Rousseau. Its popularity in contemporary U.S. society is a warning to those in the media and the halls of government against selling the lie that corporate values are equivalent to people’s values.
Congress and the White House could easily thwart the growing popular tide by adopting any number of simple and direct policy changes. Echoing progressive recommendations, De Schutter made several suggestions in his letter to the government: if the minimum wage is too low, raise the federal minimum wage and build in cost-of-living increases. If unions are too weak, close the loopholes that allow corporate employers to undermine union activity.
Another direct solution is this: if the pandemic-era benefits cut childhood poverty rates, renew the benefits.
One can understand why the Biden administration wants to cheer on the state of the U.S. economy. In spite of congressional gridlock and, especially, Republican roadblocks to commonsense economic legislation, economic stability is one of the central responsibilities that government is charged with, and achieving success in this realm is key to Biden’s reelection efforts in 2024. So, his administration is putting a happy face on the economy and papering over the contradictions between stock values and real wages.
One can also understand why the corporate media cheers on economic indicators that are important to the wealthy. Media companies are cut from the same commercial cloth as Amazon, Walmart, and DoorDash, the corporations that De Schutter singled out for exploitative treatment of their workers.
What is less understandable is why the public has accepted the bait and switch in economic values for so long.
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Needed: Whistleblower working at one of those firms to provide Minutes, e-mails and other evidence of corporate policies acknowledging the reliance upon public welfare in wage-setting.
Add exhibits showing boost to EBITDA, EPS and KPIs!
Quotable board members dilating on fiduciary responsibility to detriment of employees also desirable.
Or was that type of documentation outsourced to consultants and papered over with NDAs?
At one point, weren’t their onboarding materials recommending new hires apply for these benefits? In fact, didn’t the Army also do the same thing with new recruits?
How is any of this illegal? Why would shareholders be upset? So what would be gained from further exposure? (Not that it would be a bad thing.)
It’s not illegal in any one part, but when you get in to the effects of monopsony, then it may be illegal. Or at least disputable. If Walmart runs a business that removes the ability of other businesses to operate profitably in a given region, and then uses its leverage as the remaining large employer in that region to set labor rates to whatever they want which gives citizens in that region no options for alternate employment, that seems to me to be something a regulator could step in and fix.
But Joe’s comment above is well put. Why would anyone on the finance side benefiting from that kind of abuse complain? Why would our noxious class of limousine liberals complain about what happens in Arkansas, or West Virginia, or Mississippi, or Idaho. Those deplorable should no doubt move and learn to code. The US needs an underclass to work as currently conceived. It is clear from years of looking behind the curtain that our elites believe the people working in these positions need to be severely underpaid and treated horribly until they can be replaced with automation. During that transition, they need to be drugged or policed so that they are controlled. The flow of resources and goods to the wealthy cities cannot be stopped. Our government seems to agree that it is worth immiserating millions of US citizens to continue funding stock market gains and lavish lifestyles for the upper middle class and above.
It seems to me that it’s time for a general strike.
As you note, the monopsony/monopoly is what should be illegal and is the actual issue at play. Focusing on the low wages is a sleight of hand trick that takes focus off the government that is not doing its job
I am a deplorable Sir. I learned to code Python Sir. But they hired a H1-B visa holder instead of me Sir because his rate was lower.
I’m so sorry to hear that. I hope you’ve been able to find gainful employment despite that setback.
Thanks Chris. Yes doing well now
Here is a saying we had when working in Zambia:-
We have done so much with so little that we can now do everything with nothing.
Why write an article like this without reporting the remuneration that these companies pay? I don’t doubt the premise, but my first thought after reading this was what a waste of time.
The lack of specifics, I would argue, is due to the nature of the living wage. This calculation is based on local economic circumstances and so it’s not going to be the same for Louisiana as it is in California. A living wage is a concept, a process, that draws a red line against exploitation. A living wage ensures the employer bears the cost of employment rather than a portion of it being socialized so that private profit is not being subsidized with public tax dollars.
I know what a living wage is, and it is not hard to grasp that it would be very different in New York and Louisiana, but without any numbers, there is no useful content presented.
> . . . less understandable is why the public has accepted the bait and switch in economic values for so long.
In Walmart’s case, it’s the prices.
In Amazon’s case, Prime whip cracking sadists are bribed to shop there.
Doordash – don’t know, never used them.
True, true and I don’t know either. The list seems somewhat arbitrary given that stores like Dollartree pay far less than Walmart. A quick search
https://www.indeed.com/cmp/Walmart/salaries
Walmart itself claims an average wage of $17.50. I believe Amazon is a bit higher for ridiculously hard work.
There is also the fact that for the past 100 odd years in the west, and much more so in the US, concepts promoting working class solidarity such as socialism and communism have been demonised by Neo-liberal governments and business. Unions have been subjected to brutal thuggery and adversarial laws. Marxist economic reasoning and class based analysis is not taught, and the public and the education system is subjected to non-stop pro capitalist propagandising.
My daughter uses my home address for deliveries. Last week, Amazon made three trips over three days to deliver three very small packages, no shipping charges.
She said that it was one order totaling less than $15. She also stated that those three items cost more at local Safeway.
Slavery issue aside, what is the environmental impact from these trips, packaging material, etc.?
I no longer believe people who says they are fighting to stop global warming.
Leave mygas stove alone. Kill Amazon. The company, not the forest!
Pretty much. Sure they want that stinking noisy car banished from city streets, but they sure love their midwinter strawberry smoothie…
Well, Young, I’m doing my part. I recently published a book and guess where you won’t find it? If you guessed Amazon, you’re right.
But not to worry. I’m creating other sales channels that are a whole lot more fun!
ahhhh… so this is what was meant by “ending welfare as we know it”! what is that you say good sir? “requiring that people ‘work for welfare’ as well as restricting basic human necessities (health care) based on the requirement of employment very much favors one class over another…” and that “its more than a conincidence that employers would some how benefit by forcing people to be ’employed’ in order to get food stamps”?
INCIVILITY MY GOOD SIR! INCIVILITY! My Goodness My Good Sir! How can it be thou shaped with such derision, creativity, and hate! Whatever could make one say such ill things of our great societal leaders and our wonderous Western economic institutions?!??!
Pretty good paraphrasing of Thatcher right? when she discussed the perceieved hate and violence that she saw embodied in the labor movement and working class immediately before her rise to power.
that welfare requires work but that work requires welfare is just another in the long list of beautiful,
explicit examples as to the total insanity of “capital”…
but is that really true? is capital really “insane”?>
Brings to mind Mrs.Slocombe in Are you being Served when she remarks with hatred about the packing and maintenance man’s overtime allowance, ‘all the wrong people have the money’
If one wants to see NYT justification for the current system, look at a recent Paul Krugman column.
https://www.nytimes.com/2023/10/12/opinion/columnists/israel-gaza-massacre-left.html
In this column, this “liberal economist” attacks those who question that the USA economy is not working well for many, attacks Matt Tiabbi as a “political propagandist”, and defends US military spending (and suggests more spending may be justified).
Krugman’s justification that the economy is good hinges on a low unemployment percentage and low inflation.
From the column:
“So, do we have a hugely bloated military budget? No doubt the Pentagon, like any large organization, wastes a lot of money. But recent events have made the case for spending at least as much as we currently do, and perhaps more.”
“First, one of the revelations from the war in Ukraine has been that those expensive NATO weapons
systems, from Javelin anti-tank missiles to HIMARS, actually do work”
.
“More important, it turns out that the era of large-scale conventional warfare isn’t over after all, and
there are real concerns about whether our weapons production capacity is large enough to deal with the potential threats.”
And this is from an economist who wrote the “The Great Unraveling: Losing Our Way in the New Century”.
In my view the unraveling is well under way and Krugman is in denial.
Have read and dropped Krugman many times now. He is very very clever when positioning himself on issues. One issue he has always been vociferously supporting is protecting Social Security and not tampering with either benefits or qualifying age. I hate him onost other issues but on this one he has been very consistent to the point of ridiculing Obama and his ‘Catfood Commission’
Lol low inflation. This man doesn’t do his own grocery shopping, worry about housing costs, or pays a car loan. Might as well to admit being out of touch with average people.. oh wait it’s the NYT the article is for the ownership class anyway.
I could only find 10-year-old data in the form of a an article by Ritholtz, but 10 years ago this labor practice amounted to a 6 billion dollar government subsidy of Walmart.
Apparently it has been suggested to charge back these companies double or triple the subsidy in order to end the practice, but this is considered too radical a proposal by lawmakers.
Meanwhile, I guess we should all be happy to shop at Amazon and Walmart, our government stores, because our tax dollars have already paid for a lot of the purchases.
A famous trick by American governments is to run up the deficits and brag about the economy – if people are good patriots, they won’t even care. Reagan tripled the national debt from $1 to $3 trillion and bragged about small government and a booming economy. GWB ran up almost $5 trillion in debt over 8 years and was talking about a great ownership economy – until that ended in the Great Recession. Obama, batting clean up after Bush, ran up $9.6 trillion in debt and finished his second term talking about best job creation since the 90s. The one and only Donald J, added $8.1 trillion in only 4 years and was talking about the best economy ever. Not to be left out, Joe Biden has $5.3 trillion in just over 2 fiscal years. (debt numbers from US Treasury debt to the penny)
When I took macro economics forever ago, the professors talked about the multiplier effect, where $1 of government spending leads to $1.4 in growth. We don’t hear about it much when deficit spending is 5% of GDP and real growth is averaging 2%
No wonder the economy looks wonderful when you are only looking at the asset side of the balance sheet.
One wonders where Sonali was when the Obama administration was using the stock market as a proxy for economic health. This trick is not new — I was fighting Americablog for doing this more than 10 years ago.
This is what slow civilizational failure looks like — “shining city on a hill my family blog …
How much was this related to the EITC (Earned Income Tax Credit)? Was Bubba the one who championed that?
Ok time for a confession and yes don’t spare me the whip. I am an Amazonoholic. Problem is most stuff I order I can’t get locally. What to do?
What are you buying? True necessities? Surely any hobbies, etc can be supplied by other sites? When I shop online, which I try to do rarely, I order directly from a retailer or supplier. I never order from Amazon and certainly don’t feel any lack in my life.
I am slightly rural, not far from a city where I can get most things. My approach is that if I can only get it on Amazon then I don’t need it. I do think bargain hunting and getting the lowest price has been a huge boon to the Amazons, Walmarts, etc. I am in the lucky position of not feeling the need to shop for lowest price. I prioritize supporting local businesses over lowest price. I have a budget I stick to and if something I ‘want’ doesn’t fit my budget then I just don’t buy it. I keep a list of what I need/want and stock up when I am in the city. I make a day of it. EG today I’m getting my hair cut (tried the village stylist when we first moved here but oh my) so I will go in to the city well before my appointment and do some shopping. To repeat myself, I am not deprived in any way.