Nickel and Dimed: On (Not) Getting By in America

A living wage refers to the amount of money required for a family to live off of their own income without seeking out government assistance in the form of welfare or other social programs. Ehrenreich cites a statistic from the Economic Policy Institute that states that, in 2001, a living wage for a family of four is $30,000 a year, which amounts to $14 an hour. She notes that about 60% of American workers earn less than that, and many rely on partners, grown children who work and live with them, and other ways of getting by.

Low-wage work is understood by Ehrenreich as entry-level wages for “unskilled” jobs, or jobs that do not require a college degree. The approximate wage level Ehrenreich notes is around $8 an hour; the jobs that she works in all three locations pay between $6 and $8 an hour.

Overtime is any work beyond the legally mandated eight-hour workday. Traditionally, overtime pay is paid at a rate of 1.5 times the hourly wage of the employee. Ehrenreich notes that Wal-Mart frequently schedules its workers to work overtime but does not pay them at the overtime rate. In addition, employees who tried to seek legal recourse for their overtime pay were fired by Wal-Mart.

Ehrenreich refers to poverty broadly throughout the novel, but in the “Evaluation” chapter she presents official statistics for the poverty rate in the US and explains why these statistics are likely underestimating the amount of impoverished people in the US. She writes, “The official poverty level is still calculated by the archaic method of taking the bare-bones cost of food for a family of a given size and multiplying this number by three. Yet food is relatively inflation-proof, at least compared with rent” (200). Ehrenreich says that this outdated method should be changed to reflect the actual poverty rate, which she believes is much higher than figures indicate. Poverty is the major theme of the book, and she develops her thesis that low-wage work does not allow one to escape the cycle of poverty, but only deepens it further.

Ehrenreich notes multiple factors contributing to keeping wages low: The stagnation of wages, the lack of growth in wages in relation to inflation, the rising costs of living, and the falling value of money, which does not buy as many goods and services. Stagnation is especially true for the lowest-paid workers. Ehrenreich comments in “Evaluation” that the gain of about 0.50 cents per hour for workers from 1996 to 1999 was still extremely unimpressive, as wages relative to inflation still have not caught up to pre-1973 levels (202-203). This means that wages stagnated to such an extent for low-wage workers that they were not earning as much as they did in the late 1990s as they did prior to 1973, despite the fact that productivity has risen dramatically. She notes that Alan Greenspan, the chair of the Federal Reserve, commented that the economic law that low unemployment and wage increases go hand in hand no longer exists.

Unionization refers to workers forming groups that act collectively to negotiate with their employers for increased compensation or benefits. Ehrenreich comments on the decline of unionization in the US as unions were vilified by employers and employees were strongly discouraged from forming unions. She argues that unionization could be a major force for low-wage workers to increase their wages and gain better benefits and treatment. In “Selling in Minneapolis,” unionization is a major theme, as Ehrenreich tries to inspire her coworkers to unionize.