by Terry L. Besser
Assistant professor and extension sociologist
Iowa State University Extension to Communities
The Des Moines Register recently ran a series of articles on manufacturing in rural Iowa. I would like to add to their coverage of the subject by elaborating two rationales for low rural wages that are frequently expressed by policy makers, rural community leaders and even the workers themselves. Many view these rationales as accepted truth, when in fact they are little more than myths. The wages in rural areas will almost certainly not improve until the rationales are taken out of the realm of common knowledge and subjected to critical examination.
Rationale No. 1: Lower wages are OK in rural areas because it costs less to live there than in other places.
The federal government doesn't care where you work; they deduct 7.6 percent off the top for social security and Medicare. The worker making $6.50 an hour, $13,000 a year, pays $988 whether living in Chicago or Grundy Center. General Motors, Maytag, Hardee's, Apple Computer, Kellogg, Texaco, Iowa Natural Gas and MCI offer no discounts for rural residents. We all pay the same price for gasoline, Big Macs, home heating, CDs, Pepsi, etc. Health insurance, health care, medicines and college tuition cost the same for rural and metro dwellers alike. In fact, sometimes items cost more for rural citizens because they drive farther to purchase the product, or fewer people share the cost of services.
It is true that services provided by one's rural neighbors are cheaper than the same service in the city. Low paying jobs in manufacturing drive down the wages paid for all other local workers, such as plumbers, beauticians and child care providers. Housing and property taxes are cheaper, if housing can be found. The fact that prevailing wages in rural areas are relatively low partially explains why market forces have not adequately responded to the rural housing shortage. New houses simply cannot be built for prices that workers making $13,000 a year can afford. Thus while there is some truth to the contention that life is cheaper in rural areas, in some ways it is more expensive, and overall the differential may be far less than usually expected.
Rational No. 2: It's OK to pay low wages because this money is only a "second income."
What people really mean when they say second income wages is that the wages are half or less than what it takes to support a familyÑthat the family will need at least two full time second incomes to survive. Many families hold more than two full time jobs. The Bureau of Labor Statistics reported that in 1993, full time employees in Iowa averaged almost 50 hours of work per week, and about one in 10 moonlights at a second job as well. What are the costs to communities when the great majority of able bodied adults are so heavily involved in the labor market?
How long can these adults continue to coach little league, help with community events, raise money for the school, volunteer at the hospital, watch children at play or help a sick neighbor? The impact of second income wages on communities, neighborhoods and families is usually not considered when economic development options are considered.
The second income rationale is sometimes a mask for an attitude that still exists in the crevices of our society about the value of women's work. One community leader told me that low wage employers should be encouraged to come to town as they offer jobs which are good enough for farm wives. He reasoned that the addition of a little extra income would help husbands stay in farming and these women really aren't serious about paid employment anyhow. I have heard this excuse often in regard to low wage jobs.
Putting the sexism aside for the moment, the whole community is negatively affected by the belief that low wage jobs are good enough for some adults, especially if those employers receive any public support, training grants or other incentives. As mentioned above, low wage jobs can't he walled off from the rest of the economy. They drive down the local prevailing wage to the low wage job level. And what happens to the single parents who have no choice but to try to survive on one "second income?"
Second income employees, even with two per family, have less disposable income to spend at local retail stores and they can't afford to pay plumbers, child care providers or auto mechanics first income wages. If they own any property, they can't afford a high tax rate, which in turn affects funds available for schools and other public services. If local wages start to rise above the second income level, the employer must import laborers willing to work for the lower wages; or pulls up shop and moves to another location with cheaper labor.
An even more dangerous consequence of landing companies that pay second income wages is that it leads to a false sense of success in the community. The unemployment rate drops. There is the tangible achievement of adding 10 or 50 or 100 new jobs to the local economy. There is no longer any burning need to explore alternative economic opportunities that pay "first income wages."
Most rural residents and community leaders abhor the thought of recruiting low wage employers. The fact is that they feel that they have little power and fewer choices regarding the economic development of their areas. The myths discussed here contribute to communities' sense of powerlessness. They make low wages for rural areas appear inevitable and even justified.
Contacts:
Terry L. Besser, ISU
Extension Sociology, (515) 294-6508
Del Marks, ISU Extension
Communication Systems, (515) 294-9807
