By Wayne D. King, The View From Rattlesnake Ridge
If you ever needed proof of the disconnect between Wall Street and average folks it is the response of the Markets to the unemployment numbers from last month. Not only were markets excited with the growth in the number of people employed but they were especially excited at the lack of wage growth. Their argument was that it means that inflation is not heating up; but lets call it what it is, a continuation of nearly 50 years of stagnant wages for middle class and working class families.
Indeed, the unemployment news today is very good for the economy. Whether you wish to credit President Obama or President Trump is your call; economists make pretty good arguments both ways. Within these numbers, however, there is the long-term crisis of income inequality that represents the single greatest to the American Republic, there is also a ticking time bomb that threatens to lock it in . . . Non-compete clauses for hourly workers.
What? You say. If you have ever heard discussions about non-compete clauses in the past it was in conjunction with the employment of management level employees and people who are engaged in work that involves closely held intellectual property and trade secrets.
The fact is that since 2014 non-compete clauses for lower wage employees has been growing dramatically. It is now estimated that 25% of low wage workers are being required to sign non-compete clauses.
In year’s past there have been spurts in wage growth associated with a strong economy because employers had to raise wages in order to keep their workforce. Now they are requiring new hires to sign non-compete clauses instead.
Are you managing the line at a Pizza Hut and the local Papa John’s is offering to double your pay if you’ll come on board with them? Great news for you. Great news for your family too. Here’s your chance to take another step up the ladder of the American Dream. Hold on there!
If you signed a non-compete agreement with your employee when you were hired – or after that – chances are that you are stuck. Worse still, you’ve got no leverage with your current boss because when you ask him or her for a raise – especially if you mention the offer from Papa John’s. He’ll just remind you that your non-compete clause means you can’t take that job. If you think you can take the job and accept the legal consequences, keep in mind that you may end up spending all or more of your increased wages on lawyers to defend you from your former boss.
Asking low wage workers to sign non-compete clauses is a blatant use of a legal contract clause intended to protect intellectual property to suppress wages for working class and middle income workers. If this practice grows we will have effectively locked in shrinking wage growth, especially for the poor and working class – the precariat – and made more desperate the hopes of overcoming the growing inequality of income in America.
To those who think this is not a threat to both the Republic and the economy I say, where will your consumers come from if this continues?
About Wayne D. King: Wayne King is an author, artist, activist and recovering politician. He was a three term State Senator, who Chaired the Senate Economic Development Committee and the NH Senate Economic Summit. In 1994 King was the Democratic nominee for Governor and most recently the CEO of MOP Environmental Solutions Inc., a public company in the environmental cleanup space. His art is exhibited nationally in galleries and he has published three books of his images. His most recent novel “Sacred Trust” a vicarious, high voltage adventure to stop a private powerline has been published on Amazon.com as an ebook (http://bit.ly/STrust ) or in paper at http://bit.ly/STPaper . He lives in Rumney at the base of Rattlesnake Ridge. His website is: http://bit.ly/WayneDKing