The fourth in an annual series of reports on trends in organized labor, the 2013 report highlights its declining presence in the private sector in New York City and the growing gap between private and public sector unionization rates. Among the report’s most interesting findings is the distinctive profile of New York City’s union members, who are more likely to be Black, Latino, or female than is the case elsewhere in the nation. Although the popular stereotype of a union member is a white male wearing a hardhat, in the city only 18 percent of all union members are white men. Fully 60 percent of union members in New York City are Black or Latino, much higher than in the rest of New York State, where the figure is only 16 percent, and also in contrast to the nation as a whole, where it is 27 percent.
Introduced in various incarnations in every congressional session since the 103rd Congress, the proposed Employment Non-Discrimination Act (ENDA; H.R. 1755/S. 815) would prohibit discrimination based on an individual’s actual or perceived sexual orientation or gender identity by public and private employers in hiring, discharge, compensation, and other terms and conditions of employment. The stated purpose of the legislation is “to address the history and persistent, widespread pattern of discrimination, including unconstitutional discrimination, on the basis of sexual orientation and gender identity by private sector employers and local, State, and Federal Government employers,” as well as to provide effective remedies for such discrimination. Patterned on Title VII of the Civil Rights Act of 1964, the act would be enforced by the Equal Employment Opportunity Commission (EEOC).
On Tuesday July 2, 2013, the Obama Administration posted a blog on employer requirements and the Patient Protection and Affordable Care Act (ACA, P.L. 111-148), as amended. Based on the White House blog, the administration (1) plans to revamp employer reporting requirements, and therefore suspend employer reporting requirements for 2014, and (2) because employer payments are dependent on the reporting requirements, no payments will be collected in 2014. The Administration noted that these changes were in response to employers’ concerns about the reporting requirement.
On July 17, 2013, H.R. 2667, the Authority for Mandate Delay Act, passed the House. H.R. 2667 would delay by one year the applicable effective date for the employer requirements, employer penalties, and related reporting requirements specified under ACA.
This report provides information on the statutory requirements and the proposed regulations issued to implement these statutory requirements in December 2012. This report does not yet reflect the proposed Administration changes. The report will be fully updated once additional information becomes available…
The Fair Labor Standards Act (FLSA) of 1938 established the hourly minimum wage rate at 25 cents for covered workers. Since then, it has been raised 22 separate times, in part to keep up with rising prices. Most recently, in July 2009, it was increased to $7.25 an hour. Because there have been some extended periods between these adjustments while inflation generally has increased, the real value (purchasing power) of the minimum wage has decreased substantially over time….The peak value of the minimum wage in real terms was reached in 1968. To equal the purchasing power of the minimum wage in 1968 ($10.70), the current minimum wage’s real value ($7.90) would have to be $2.80 (or 26%) higher. Although the nominal value of the minimum wage was increased by $5.65 (from $1.60 to $7.25) between 1968 and 2009, these legislated adjustments did not enable the minimum wage to keep pace with the increase in consumer prices, so the real minimum wage fell.
From the summary:
…Last month, four economists from Harvard University and the University of California, Berkeley—Raj Chetty, Nathaniel Hendren, Patrick Kline, and Emmanuel Saez—made an important contribution to this effort by releasing a comprehensive study of intergenerational income mobility across the United States. Their study revealed not only that mobility varies substantially across metropolitan areas and other geographic regions, but that these variations are associated with a number of regional characteristics, such as school quality, civic and religious engagement, the share of single-parent families, and geographic sprawl. In other words, the variation in economic mobility is not random. Some characteristics likely improve mobility, while others dampen it.
By using the same data and methodology employed by Chetty and his colleagues, we can see that one of the most important characteristics is the size of the region’s middle class. Put simply, the data show that when a region has a larger middle class, its low-income children are likely to be more upwardly mobile. Indeed, the size of a region’s middle class is a stronger predictor of economic mobility than all but 2 of the 28 regional characteristics that the study’s authors tested.
This finding—that the middle class and mobility are strongly related—is very much in line with recent research that shows a negative correlation between intergenerational mobility and economic inequality. International studies have shown that countries with more inequality have less economic mobility, a relationship termed the “Great Gatsby Curve” by Alan Krueger, the former chairman of President Barack Obama’s Council of Economic Advisers. Now we know, based on the study from Chetty and his co-authors, that this relationship is true right here within the United States, not only across countries….
From the abstract:
Nearly 40 years after the adoption of the Title IX Amendments of the US Civil Rights Act, women account for almost 50% of US medical students and more than one-third of all physicians. Historically, female physicians have earned considerably less than male physicians, though in the 1990s much of this was attributable to gender differences in specialty choice and hours worked. However, more recent data suggest that female physicians currently earn less than male physicians even after adjustment for specialty, practice type, and hours worked. Salary differences between men and women currently exist among physician researchers as well. This raises questions about whether the gender gap in earnings among US physicians has closed over time, particularly compared with the earnings gap for other health care professionals and workers overall. Comparing earnings of male and female physicians over time is important in assessing the impact of policies to promote gender equality among physicians.
In general, the goal of disability insurance is to replace a portion of a worker’s income should illness or disability prevent him or her from working. Individuals may receive disability benefits from either federal or state governments, or from private insurers. This report presents information on two components of federal disability benefits, those provided through the Social Security Disability Insurance (SSDI) and the Supplemental Security Income (SSI) programs. The SSDI program is an insurance program that provides benefits to individuals who have paid into the system and meet certain minimum work requirements. In contrast, the SSI program is a means-tested program that does not have work or contribution requirements, but restricts benefits to those who meet asset and resource limitations… To receive disability benefits under either program, individuals must meet strict medical requirements. For both SSDI and SSI disability benefits, “disability” is defined as the inability to engage in substantial gainful activity (SGA) by reason of a medically determinable physical or mental impairment expected to result in death or last at least 12 months. Generally, the worker must be unable to do any kind of work that exists in the national economy, taking into account age, education, and work experience. Both programs are administered through the Social Security Administration (SSA) and therefore have similar application and disability determination processes. Although SSDI and SSI are federal programs, both federal and state offices are used to determine eligibility for disability benefits. SSA determines whether someone is disabled according to a five-step process, called the sequential evaluation process, where SSA is required to look at all of the pertinent facts of a particular case. Current work activity, severity of impairment, and vocational factors are assessed in that order. An applicant may be denied benefits at any step in the sequential process even if the applicant may meet a later criterion. The SSDI program is primarily funded through Social Security payroll tax revenue, portions of which are credited to a Disability Insurance (DI) trust fund. In contrast, the SSI program is funded through appropriations from general revenues…
While the U.S. faces a retirement crisis, other countries have implemented programs that provide a better level of economic security in retirement. As compared to the U.S., Australia, Canada and the Netherlands provide higher retirement income for more of their citizens through their social security and universal/quasi-universal employer retirement plans. …
In the United States (U.S.) private sector, low rates of retirement plan coverage and the large-scale shift from defined benefit (DB) pensions to defined contribution (DC), 401(k)-style individual investment accounts have resulted in almost all retirement funding, investment, and longevity risks being borne by workers. This has resulted in pronounced retirement income insecurity for a majority of the workforce. Some characterize this shift as an unavoidable response to current demographic trends and economic uncertainty. However, other advanced countries have endeavored to both meet these challenges and provide relatively broad retirement income security through their combined social security and employer-sponsored retirement systems.
This paper provides international perspectives on retirement security by outlining social security and universal, quasi-universal, and voluntary employer-provided retirement plans in Australia, Canada, and the Netherlands. These countries have levels of development similar to the U.S., and have established retirement income systems that are recognized for their high quality in terms of adequacy, sustainability, and integrity. The goal of this paper is to assess the level of security and risk provided by each country’s retirement system through the layers of income replacement provided by government, employer, and individual programs. In addition, this paper highlights key issues and lessons for consideration by U.S. policymakers and stakeholders.
Listen to a presentation of the report findings here.
Source: Casey B. Mulligan, National Bureau of Economic Research, NBER Working Paper No. 19366, August 2013
From the abstract:
Measured in percentage points, the Affordable Care Act will, by 2015, add about twelve times more to average marginal labor income tax rates nationwide than the Massachusetts health reform added to average rates in Massachusetts following its 2006 statewide health reform. The rate impacts are different between the two laws for several reasons, especially that: the populations subject to the two laws are different, the Affordable Care Act’s employer penalty is an order of magnitude greater, before either reform Massachusetts had already been offering more means-tested and employment-tested health insurance assistance than other states had, and the subsidized health insurance plans created by the Massachusetts reform were less substitutable for employer-provided insurance than are the subsidized plans to be created nationwide next year.
Source: Casey B. Mulligan, National Bureau of Economic Research, NBER Working Paper No. 19365, August 2013
From the abstract:
The Affordable Care Act includes four significant, permanent, implicit unemployment assistance programs, plus various implicit subsidies for underemployment. Every sector of the economy, and about half of nonelderly adults, is directly affected by at least one of those provisions. This paper calculates the ACA’s impact on the average reward to working among nonelderly household heads and spouses. The law increases marginal tax rates by an average of five percentage points (of employee compensation), on top of the marginal tax rates that were already present before the it went into effect. The ACA’s addition to labor tax wedges is roughly equivalent to doubling both employer and employee payroll tax rates for half of the population.