Working for Dignity: Low Wage Worker Study of Santa Cruz County Report
Summer 2015: Steve McKay, Ruben Espinoza, and Steven Carmona Mora
I. Introduction
“My wage has not changed in eight years. Everything has remained the same since my first day [on the job]. We have problems with our paycheck because our hours are not always paid in full. And they take a long time to pay us when we bring it up [being shortchanged].”
Alicia, dish washer
“My wage has not changed in eight years. Everything has remained the same since my first day [on the job]. We have problems with our paycheck because our hours are not always paid in full. And they take a long time to pay us when we br“When I lived in Mexico, I thought it would be different. I thought it would be one thing and when I got here [laughing] it was different… The work [here], it is too heavy (physically demanding)…. In strawberries, it is heavy work and they don’t pay you a lot to do what we do. … [People] don’t think, when they are eating the vegetables, they don’t think [about] all the things that people go through in the fields … it is real heavy work.”
Esperanza, berry picker
Our national economy seems to be back on track. Six years into our recovery from the Great Recession, the overall economy continues to grow: the stock market and profits are surpassed their pre-recession heights; businesses have steadily added new jobs, finally replacing the nearly 9 million jobs lost between 2007 and 2009; and the national unemployment has fallen to 5.3% from a high of 10% at the height of the Recession.[1]
Yet the broad growth numbers mask the unevenness of the recovery and the fact that many people still struggling. For example, the poverty rate, which shot up to over 15% in 2010, has barely budged downward, remaining at 14.5% through 2013.[2] The percentage of children living in poverty has actually increased, from 18% in 2008 to 22% in 2013.[3]
Similarly, while average incomes grew 8.4% in the first 5 years of the recovery, that growth was highly unequal: those with incomes in the top 1% saw their incomes grow 27%, while those in the bottom 99% experienced a paltry income growth of 4.3%.[4] In other words, the top 1% captured 58% of the income gains from 2009-2014. The income stagnation is largely due to flat or even falling wages (because of inflation) for the vast majority. From 2007 to 2014, only those earning top wages saw some modest growth, while the wages for the bottom 80% were stagnant or actually fell.[5]
Key reasons for the income stagnation and persistent poverty despite improvement in the overall economy have been the loss or “hollowing out” of the middle-class jobs, greater polarization of the labor market, and the fact that much of the job growth in the recovery has been in low-wage industries, such as restaurants, retail sales, and temporary help. Industries that pay relatively low wages (that is, with median wages in the bottom third or less than $13.33/hour), accounted for 22% of recession job losses, but 44% of job growth in the recovery. These lower-paying industries now employ 2.3 million more workers than at the start of the recession.[6]
In terms of occupations, a similar trend is visible: lower-paying occupations, like retail salespersons, waitstaff, and food prep workers have grown the most during the recovery – growing 2.7 times faster than mid- and higher-paying occupations, such as maintenance workers, teachers, nurses, or managers. And while real median hourly wages for all occupations declined by 3.4% from 2009 to 2013, wages in lower and mid-wage occupations declined most. The workers hit with the steepest declines in real wages were also some of the lowest paid. For example, cooks, who earn a meager median wage of $10.69 an hour, experienced an 8.3% decline in their inflation-adjusted wages, while personal care aids, who earn just $9.70 an hour suffered a drop of 6.3% in their real wage.[7]
Nearly half of new jobs created since the Great Recession pay less than $15 an hour and today, 24 million US workers – or 35% of all hourly, non-self employed workers over 18 years of age make less than $10.10 an hour.[8]
From previous national studies, we also know that the low-wage workforce – compared with the workforce as a whole – has more women than men; more persons of color, particularly Latinos; more immigrants; and people who on average have less education.[9] These disparities get reflected in the national statistics on income and poverty of these different groups. For example, in terms of income, working women earn a median income of just $39,000 per year versus over $50,000 for working men. White, non-Hispanics households earn a median annual income of $58,000, while Hispanic households earn less than $41,000. And while households of native-born workers earn a median income of $53,000, households of foreign-born non-citizens earn just $41,000. In terms of poverty, only 9% of White, non-Hispanic households fall below the poverty line (using official national standards), while 23% of Hispanic households struggle in poverty. Thirteen percent of men but 16% of women fall below the poverty line, and while 14% of households of native-born workers are poor, 25% of households of foreign-born non-citizens live in poverty.[10]
California
California, despite the renewed tech boom and the rebound in housing prices, has not fared much better than the nation as a whole. Based on the official national poverty line, 16.6% of Californians are poor. Yet, as residents of California surely understand, the higher costs of living in the state, especially extremely high housing costs, make the situation for low-wage workers and their families that much more desperate. Using the California Poverty Measure (CPM), a more comprehensive gauge that better accounts for the higher cost of living in California, 21.8% of Californians in 2012 were living in poverty.[11]
State poverty rates are directly related to the character of the economy and labor market. Focusing on Californians working in low-wage industries, we see similar trends that we witnessed at the national level. In fact, over 4.7 million Californians, or one out of every three workers, is a low-wage worker earning less than $13.63 an hour ($13.63 is two-thirds of California’s overall median wage of $20.44, which is definition of “low-wage” used by the UC Berkeley Labor Center).[12]
Similar to national trends, those earning low wages tend to be concentrated in particular industries and occupations. For example, while low-wage workers are found throughout the state’s economy, retail trade and the restaurant industry alone account for 28% of the state’s low wage workers. Other industries also have high rates of low-wage workers include agriculture (where 71% of workers earn low-wages), restaurants (68%), home care and childcare services (52%), retail (50%) and accommodations (50%). In terms of occupations, 3 groups – office and administrative support, retail sales, and food prep and serving occupations – account for 41% of the state’s low-wage workers.
Finally, certain groups of workers are concentrated or over-represented in low-wage work. The vast majority of California’s low-wage workers (95%) are adults, and not teenagers. The average age of low-wage workers is 35, compared to 40 for all California workers. In terms of race and ethnicity, more than half (56%) of low-wage workers are Latino, compared to 39% of all workers that are Latino, while only 26% of low-wage workers are White, compared with 39% of all workers. And in terms of immigrants, a larger percent of low-wage workers in California are also foreign born: 40% versus 33% for all workers.[13]
Beyond low wages: Other aspects of “bad” jobs
The troubles facing workers at the low-end of the labor market extend beyond wage issues. As numerous recent studies have shown, workers in low-wage industries face a daunting number of additional problems associated with “bad jobs” and precarious work.[14] In addition to low wages and wage theft, jobs that provide few or no benefits, are risky, insecure, have irregular hours and unpredictable schedules, provide few opportunities for advancement, and provide few ways to maintain control over one’s work would be considered by most workers as “bad” or “precarious” jobs.[15]
Workers in low-wage industries and occupations are also much more likely experience these types violations or bad job characteristics. For example, a large-scale survey of workers in New York, Chicago and Los Angeles revealed the severity and frequency of workplace violations in low-wage industries. The authors found that a large percentage of low-wage workers in a wide range of industries experienced some form of wage theft: 26% were paid below the minimum wage, 76% of those that worked overtime were not fully compensated, 69% did not receive legally mandated meal breaks, and 57% of workers did not receive proper paystub documentation. Additionally, 43% of workers that complained about working conditions or tried to form a union faced illegal employer retaliation, and half of all workers that were injured on the job faced illegal employer reactions (such as being fired, told not to file for workers’ compensation, or having immigration authorities called).[16] Similar violations pertaining to insecurity, unsafe working conditions, workplace discrimination and harassment have been found among agricultural workers, restaurant workers, domestic care workers, temporary workers, and day laborers.[17]
Our study: Surveying low-wage workers in Santa Cruz County
While the trends and data outlined above emerge from studies conducted at the national and state level, there is far less data on workers and working conditions in low-wage industries in Santa Cruz County. We do know that at the local level since 1990, there has been a decrease in the percentage of workers in agriculture and manufacturing and a corresponding increase in service industries such as retail sales, leisure and hospitality, education and government.[18] But beyond a general picture of the local economy and labor market, there is scant information documenting low-wage work and workers in Santa Cruz County.
This report fills that gap by addressing the following questions: Who are the low-wage workers in our community? What industries do they work in and what type of work do they do? What are the working conditions that they face and how do they experience low-wage work? What labor issues (such as health and safety, or pay) and violations (such as discrimination and retaliation) do low-wage workers commonly encounter?
The first goal of this report is to establish baseline data on workers and working conditions in the low-wage sectors of Santa Cruz County (primarily Santa Cruz and Watsonville). Yet often lost in discussions of the economy are people’s own understandings of work. Thus a second major goal is to provide more than just a statistical portrait by using indepth interviews to listen to oft-ignored voices of low-wage workers themselves. Work has long been a key source of human dignity, a central way we realize self-worth and respect. But lowwage jobs all too often leave workers struggling in poverty, exhausted or hurt, harassed and demeaned, and with few ways out or up. So is there still dignity in work? This study aims to comprehensively assess low-wage labor, mindful that the meaning of work cannot be divorced from those who perform it.
What is “low-wage” work?
There are two main ways to define a low-wage worker. The first compares different types of workers. Here, a low-wage worker is defined as someone who earns less than twothirds of the median hourly wage for all full-time workers. The median hourly for the Santa Cruz/Watsonville metro area was $17.81 in 2014, two-thirds of which is $11.88.19 However, this first definition does not take into account a worker’s expenses.
Thus a second definition, which we use throughout this study, is a measure that takes into account both a worker’s wage as well as a worker’s local cost of living. By this second definition, low wage work is defined as work that pays below the poverty line for a family of four if s/he works full time.[20] Based on the California Poverty Measure (CPM), which takes into account variation in the cost of living and, particularly, the high cost of housing in California, the poverty level for a family of 4 in Santa Cruz County in 2012 is a yearly income of $32,884.[21] This yearly income translates into an hourly rate of pay of $15.81 for a full-time, year-round worker. Therefore, for this study, the definition of a low-wage worker is someone who earns an hourly wage of less than $15.81.
1 Bureau of Labor Statistics, 2015, Employment Situation Summary, http://www.bls.gov/news.release/empsit.nr0.htm.
2 DaNavas-Walt, C. and B. Proctor, 2014. Income and Poverty in the United States, https://www.census.gov/content/dam/Census/library/publications/2014/demo/p60-249.pdf
3 Annie E. Casey Foundation, 2015, 2015 Kids Count Data Book, http://www.aecf.org/m/resourcedoc/aecf2015kidscountdatabook-2015.pdf
4 Saez, E., 2015, “Striking it Richer: The Evolution of Top Income in the US, 2015”, http://eml.berkeley.edu/~saez/saez-UStopincomes-2014.pdf)
5 Gould, E., 2015, “2014 Continues a 35-Year Trend of Broad-based Wage Stagnation”, Economic Policy Institute Policy Brief #393, http://s4.epi.org/files/pdf/stagnant-wages-in-2014.pdf
6 National Employment Law Project, 2015, The Low-wage Recovery, http://www.nelp.org/content/uploads/2015/03/Low-Wage-Recovery-Industry-Employment-Wages-2014- Report.pdf
7 National Employment Law Project, 2015, An Unbalanced Recovery, http://www.nelp.org/content/uploads/2015/03/Unbalanced-Recovery-Real-Wage-Job-Growth-Trends-August2014.pdf)
8 Henry. B and A. Frederickson, 2015, Low Wage Nation, Alliance for a Just Society, https://jobgap2013.files.wordpress.com/2015/01/lowwagenation2015.pdf; Desilver, D. and S. Schwarzer, 2014, “Making more than minimum wage, but less than $10.10 an hour”, Pew Research Center, 2014, http://www.pewresearch.org/fact-tank/2014/11/05/making-more-than-minimum-wage-but-less-than-10-10-an-hour/.
9 Bernhardt, A., R. Milkman, N. Theodore et al., 2009, Broken Laws, Unprotected Workers, http://www.unprotectedworkers.org/index.php/broken_laws/index
10 DaNavas-Walt, C. and B. Proctor, 2014. Income and Poverty in the United States, https://www.census.gov/content/dam/Census/library/publications/2014/demo/p60-249.pdf
11 The California Poverty Measure (CPM) takes into account differences in housing prices and living costs in different counties. Because most Californians live in high-cost counties and 89% of Californians live in rented or mortgaged housing, poverty levels for a family of four for most state residents ranged between $29,500 and $37,400 versus the official national poverty line of $24,028. See Wimer, C., M. Mattingly, S. Kimberlin, et al., 2015, Poverty and Deep Poverty in California, http://web.stanford.edu/group/scspi/poverty/cpm/CPM_Brief_Poverty-DeepPoverty.pdf.
12 UC Berkeley Labor Center, 2015, Low-wage California: 2014 Chartbook, http://laborcenter.berkeley.edu/pdf/2014/chartbook.pdf
13 UC Berkeley Labor Center, 2015, Low-wage California: 2014 Chartbook, http://laborcenter.berkeley.edu/pdf/2014/chartbook.pdf
14 Bobo, K. 2009, Wage Theft in America, New York: New Press; National Employment Law Project, 2013, Winning Wage Justice: A Summary of Research on Wage and Hour Violations in the United States, http://www.nelp.org/content/uploads/2015/03/WinningWageJusticeSummaryofResearchonWageTheft.pdf
15 Kalleberg, A., 2011, Good Jobs, Bad Jobs: The Rise of Precarious Labor Systems in the United States, 1970s to 2000s, New York: Russell Sage Foundation
16 Bernhardt, A., R. Milkman, N. Theodore et al., 2009, Broken Laws, Unprotected Workers, http://www.unprotectedworkers.org/index.php/broken_laws/index
17 Farmworker Justice, 2013, Exposed and Ignored: How pesticides are endangering our nation’s farmworkers, http://www.farmworkerjustice.org/sites/default/files/aExposed%20and%20Ignored%20by%20Farmworker%20Justi ce%20singles%20compressed.pdf; S. Jayaraman, 2013, Behind the Kitchen Door, Cornell and London: ILR Press; Burnham, L. and N. Theodore, 2012, Home Economics: The Invisible and Unregulated World of Domestic Workers, National Domestic Workers Alliance, http://www.domesticworkers.org/sites/default/files/HomeEconomicsEnglish.pdf; Grabell, M., O. Pierce, and J. Larson, 2013, Temporary Work, Lasting Harm, Propublica, http://www.propublica.org/article/temporary-worklasting-harm; Venezuela, A., N. Theodore, E. Melendez, et al, 2006, On the Corner: Day Labor in the United States, http://www.judicialwatch.org/archive/2006/ucla-uicreport.pdf
18 Employment Development Department, State of California, 2015, Santa Cruz County Profile, http://www.labormarketinfo.edd.ca.gov/cgi/databrowsing/localAreaProfileQSResults.asp?selectedarea=Santa+Cruz +County&selectedindex=44&menuChoice=localareapro&state=true&geogArea=0604000087&countyName=
19 Bureau of Labor Statistics, 2015, May 2014 Metropolitan and Nonmetropolitan Occupational Employment and Wage Estimates, Santa Cruz-Watsonville, CA http://www.bls.gov/oes/current/oes_42100.htm#00-0000)
20 This is a common definition or standard for “low-wage workers” when discussing the national level. See R. Thiess, 2012, “The Future of Work: Trends and challenges for low-wage workers”, Economic Policy Institute Briefing Paper #341, http://www.epi.org/publication/bp341-future-of-work/ . We, however, use the California Poverty Measure for greater accuracy concerning conditions in Santa Cruz County.
21 Public Policy Institute of California, 2015, California Poverty Rates by County, http://www.ppic.org/main/mapdetail.asp?i=1396