Building the Middle Class

Abdul is angry at unions:

A union spokeswoman says the starting wage for a housekeeper at the Hyatt Regency in Indianapolis is $7.25 an hour, but that same wage in Chicago is $14.25 an hour.

Now let’s apply some common sense to this situation.

Using their math the Indianapolis housekeeper makes about $15,000 annually. Using a standard salary calculator, the Indy housekeeper should make $19,000 to be comparable with the Chicago housekeepers salary. But that’s not what’s happening, using the Union’s own math, the Chicago housekeeper makes about $27,000 a year. So not only is the Chicago housekeeper overpaid, the Unions want the Indy housekeeper to be overpaid too.

Really? I'm not sure what he used for his numbers, so I decided to run my own:

$7.25 x 40 hours/week x 52 weeks/year = $15,080/year
$14.25 x 40 hours/week x 52 weeks/year = $29,640/year

Using this site:
$15,080 in Indy is $17,852.65 in Chicago.
$29,640 in Chicago is $25,036.69 in Indy.

But who's underpaid or overpaid here is a value judgment. If I assume the Chicago rate as my baseline instead of the Indy rate as Abdul did, the Indy housekeeper is drastically underpaid to the tune of $10k/year.

Once upon a time, manufacturing jobs were the ticket to the middle class in America for those without college degrees. But we went through an efficiency revolution in manufacturing similar to the one we went through even longer ago in agriculture. We can now produce even more output with much fewer workers, thus those days are gone. Now, unionized service sector jobs that can't be outsourced are our best chance at creating a new path to the middle class for those without college degrees. I imagine Abdul doesn't like that solution because yes, it means he'll have to pay more for a hotel room. But it also means a whole new group of workers will be able to afford hotel rooms that couldn't before. Conservatives and libertarians think this will destroy growth and kill businesses. But it worked for Henry Ford. It worked during the 50s and 60s when we created the largest middle class in history and experienced our largest period of peacetime growth. I see little reason it can't work again.

Thanks to fellow TCMSO blogger crs for pointing this story out.