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United States

2 of workers to prosper are typically the

poorest earners, such as low-skilled shopstaff, food preparers, care-givers and temps. Their pay was walloped in the Great Recession a decade ago, and the recovery since has been unusually slow. Pay has leapt recently—with the lowest-paid enjoying faster gains than the better-off. The benefits are not equally spread. In Wisconsin, as in much of the country, more jobs are being created in urban areas and in services. Laura Dresser, a labour economist, points to a “very big racial inequality among workers”. Wages have been rising fastest for African-Americans, but poorer blacks, especially those with felony convictions, are also likelier to have fallen out of the formal labour market, so are not counted in unemployment figures. The wage recovery is not only about markets. Policy matters too. Some states, typically Republican-run, have been reluctant to lift minimum wages above the federal level of $7.25 an hour. In Merrillville, a worker in a petshop carries a Husky puppy to be inspected by a group of teenage girls. Staff are paid “a dollar or two above the minimum wage”, says his manager. Despite his 13 years’ employment, and over 40 hours’ toil each week, his pay and benefits amount to little. He calls occasional bonuses a “carrot at the end of the road”. He could munch on bigger carrots in other states. Lawmakers in some states are more willing to lift minimum wages. Where they do, the incomes of the lowestpaid rise particularly fast. Thirteen states and the District of Columbia raised the minimum wage last year. (Some cities, like Chicago and New York, occasionally raise it too). Elise Gould of the Economic Policy Institute told Congress in March that, in states which put up minimum wages at least once in the five years to 2018, incomes for the poorest rose by an average of 13%. In the remaining states, by contrast, the poorest got a rise of 8.6% over the same period. In neither case, however, do the increases amount to much better long-term prospects for the worst-off. By last year, the poorest 10% were still earning only a miserly 4.1% more per hour than they did (in real wages) 40 years ago. Median hourly pay for America’s workers was up a little more, by 14%. One study in Wisconsin suggests that caretakers, for example, took home over $12 an hour by last year, so were only just getting back to their (real) average earnings achieved in 2010. Expansion at the bottom of the labour market “is finally pulling some wages up. But it’s certainly been much slower in this boom than any other,” argues Tim Smeeding, a poverty expert at the University of Wisconsin, in Madison. He describes “capital winning over labour” for several decades, and expects the trend to continue, given weak unions, more

The Economist May 18th 2019

automation and other trends. The poorest get some hard-to-measure benefits in addition to higher hourly pay. Mr Hooper is not alone in daring to walk away from an exploitative boss. More of the low-paid get a bit more say on how and when they toil. Many crave a reduction in the income volatility that afflicts them, since sudden swings in earnings are associated with poor mental health, high stress and worry over losing access to financial assistance or food stamps. One study of 7,000 households, by Pew, found in 2015 that 92% of them would opt for lower average incomes, if earnings were predictable. Follow-up research late last year suggested the same trends are still present. Low- and middle-income households remain anxious about volatile earnings. Most have almost no savings. Many would struggle with a financial shock of just a few hundred dollars.

Lots of jobs that are being created are in or near flourishing cities like Madison, where low-paid workers are squeezed by high housing costs. Pew has estimated that 38% of all tenant households spend at least 30% of their income on rent. Living in more affordable places, such as Janesville, an hour south of Madison, may be an option for the lower-paid. But that means commuting to the city, or taking local jobs with less pay and fewer benefits. Few workers earning less than $12 an hour get health insurance from their employer, whereas most do so above that threshold. Katherine Cramer, who studies the long-standing causes of simmering anger among poorer, rural Americans, says “resentment is worse than before”, despite the recent better wages. Rural folk complain that “it’s been like this for decades”, she says. A year or two catching up has not yet been enough to change their minds. 7

Abortion laws

Alabama shakes


Republican states are longing to challenge Roe v Wade


ever has the war sparked by Roe v Wade, the 1973 Supreme Court ruling that declared abortion a constitutional right, been as intense as it is now. Lawmakers in conservative states are passing “heartbeat” bills banning abortion from the moment a heartbeat is detectable, around the sixth week of pregnancy—flagrantly violating Roe. To defend abortion rights, some liberal states are extending them, making it easier to have abortions in the third trimester. That has encouraged

Debate prep

President Donald Trump to mount a fresh assault on late abortions, which he routinely characterises as babies being “ripped” from their mothers’ wombs. The most uncompromising attack on Roe has been launched in Alabama. On May 14th the state’s Senate passed a bill that would, in effect, ban abortion outright. Signed into law by the governor the following day, it constitutes the harshest abortion legislation passed in America in half a century. “The heartbeat bills don’t really tackle what Roe is about,” says Eric Johnston, president of the Alabama Pro-life Coalition, alluding to Roe’s protection of abortion until a fetus is viable, at around 24 weeks. “It seemed like the right time to challenge it properly.” The bill, which the softly spoken Mr Johnston wrote, does not mess around. Comparing abortion to the most murderous atrocities of the 20th century—“German death camps, Chinese purges, Stalin’s gulags, Cambodian killing fields, and the Rwandan genocide”—it makes performing one a felony, punishable by up to 99 years in prison. Because the bill defines a fetus as “a human being…regardless of viability” its sponsors resisted attempts, by Republican as well as Democratic senators, to allow exceptions in cases of rape or incest. The law will be struck down in the courts, just as heartbeat bills have been elsewhere, most recently in Kentucky and 1

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The Economist - 18.05.19  

The Economist - 18.05.19