Sunday, January 2, 2011

Nickel and Dimed

Erin loaned me Nickel and Dimed, On (Not) Getting by in America by Barbara Ehrenreich. The introduction is very easy reading, but Barbara Ehrenreich, PhD, displays her wonderfully developed lexicon in the ensuing chapters. She writes about trying to survive at various low wage jobs in 3 different places in the country. She starts out close to her actual home and works as a waitress in Key West. Chapter 2 has a description of being a maid in Maine. Chapter 3 brings her to Minneapolis where she works at Wal-Mart. She concludes the book with a valuable analysis of her experience.

Ehrenreich relates information about working and living conditions, social interactions, and daily struggles she faces while living undercover as a low wage worker. She is not shy to point out that she is not facing the full reality of poverty because she can fall back on her savings if things go disastrously for her. She is not prepared to endanger her long-term well being for this journalistic endeavor.

Often I encounter works like this from people who do not understand economics. She has obviously studied economics and recognizes that supply and demand are the reasons why housing costs are so high. She also cites market failures and immobility of labor as reasons why wages are kept so low. It is the fault of the rich that the poor can't get affordable housing close to where they work serving the rich, but it's nothing intentional done by rich people (exclusionary covenants in homeowners associations aren't what I'm talking about here). Through her economic analysis, Ehrenreich does a wonderful job of pointing out poverty traps. Poverty traps are systems which keep the poor from climbing the income ladder. For instance, having to rent a small apartment without a kitchen forces residents to eat more expensive, prepared food. For some reason, employers can hold the first week's paycheck until the employee leaves the firm. Another poverty trap is that sick and injured workers have to "work through it" because losing a day's wages could mean losing a day's (or more) food. It could also lead to termination of employment.

One more reason why the "low-skill" labor market doesn't work as well as it should is due to information asymmetry. Ehrenreich hilights the taboo of workers talking about how much they're paid. Also, they can't very well shop around for the best wage as companies will take them right from an interview to orientation without discussing the terms of the contract. That way new hires won't go looking around to other companies for jobs when they would be jeopardizing the one they just acquired.

On another note, unrelated to economics, she make the following observation about Jesus that I liked...She's at a "tent revival" in Maine and thinks that:
"It would be nice if someone would read this sad-eyed crowd the Sermon on the Mount, accompanied by a rousing commentary on income inequality and the need for a hike in the minimum wage. But Jesus makes his appearance here only as a corpse; the living man, the wine-guzzling vagrant and precocious socialist, is never once mentioned, nor anything he ever had to say. Christ crucified rules, and it may be that the true business of modern Christianity is to crucify him again and again so that he can never get a word out of his mouth."

I've had much the same reaction to Christians who preach that God hates certain groups of people. It is strange to me to hear messages about justifying negative actions with Jesus on the radio, let alone in person at a tent revival.

Enough rambling from me...go pick the book up and read it yourself.
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