Category Archives: Compensation

Worker wages drop while companies spend billions to boost stocks

Source: Irina Ivanova, Moneywatch, July 11, 2018

Six months after the Tax Cut and Jobs Act became law, there’s still little evidence that the average job holder is feeling the benefit.

Worker pay in the second quarter dropped nearly one percent below its first-quarter level, according to the PayScale Index, one measure of worker pay. When accounting for inflation, the drop is even steeper. Year-over-year, rising prices have eaten up still-modest pay gains for many workers, with the result that real wages fell 1.4 percent from the prior year, according to PayScale. The drop was broad, with 80 percent of industries and two-thirds of metro areas affected. ….

…. Businesses are spending nearly $700 billion on repurchasing their own stock so far this year, according to research from TrimTabs. Corporations set a record in Q2, announcing $433 billion worth of buybacks — nearly doubling the previous record, which was set in Q1. ….

The Apprenticeship Wage and Participation Gap

Source: Angela Hanks, Annie McGrew, and Daniella Zessoules, Center for American Progress, July 11, 2018

From the introduction:
In recent years, U.S. apprenticeship programs have become popular among politicians, workforce advocates, workers, and employers—and it’s easy to understand why. According to the U.S. Department of Labor (DOL), people who complete an apprenticeship program can expect to earn an average annual income of approximately $60,000—slightly above the 2016 U.S. national median household income.

Yet, too little is known about racial and gender representation in these programs. Apprenticeship—which combines on-the-job training with classroom instruction—tends to be dominated by the building and construction trades. This suggests that these programs, like the construction workforce more broadly, are disproportionately male. Indeed, men make up the overwhelming majority of those who participate in apprenticeship programs in the United States. According to the DOL’s own analysis, women made up less than 7 percent of all apprentices in 2013—even though they made up 47 percent of the labor force during the same year.

The analysis in this issue brief examines apprenticeship programs over the past decade—from fiscal year 2008 through 2017—to observe gaps in participation and wages among women and people of color. In general, it finds that women remain deeply underrepresented in apprenticeship programs and that wages among women and black or African American apprentices are much lower than those of other apprentices. Even though these programs are intended and have the potential to develop the U.S. workforce, increase earnings, and prepare workers for the jobs of the future, their current gender and racial compositions tell a different story; more work must be done to make it a reality.

The new wave of equality legislation: States move to create pay parity by banning inquiries into candidate’s prior salary history

Source: Anne Cherry Barnett, Employment Relations Today, Early View, First published: April 25 2018
(subscription required)

From the abstract:
State‐by‐state survey on current laws prohibiting employers from inquiring into job candidate’s prior salary history.

New Study Confirms That American Workers Are Getting Ripped Off

Source: Eric Levitz, New York Magazine, July 6, 2018

…. Economists have put forward a variety of explanations for the aberrant absence of wage growth in the middle of a recovery: Automation is slowly (but irrevocably) reducing the market-value of most workers’ skills; a lack of innovation has slowed productivity growth to a crawl; well-paid baby-boomers are retiring, and being replaced with millennials who have enough experience to do the boomers’ jobs — but not enough to demand their salaries.

There’s likely some truth to these narratives.

But a new report from the Organization for Economic Cooperation and Development (OECD) offers a more straightforward — and political — explanation: American policymakers have chosen to design an economic system that leaves workers desperate and disempowered, for the sake of directing a higher share of economic growth to bosses and shareholders.

The OECD doesn’t make this argument explicitly. But its report lays waste to the idea that the plight of the American worker can be chalked up to impersonal economic forces, instead of concrete political decisions. If the former were the case, then American laborers wouldn’t be getting a drastically worse deal than their peers in other developed nations. But we are. Here’s a quick rundown of the various ways that American workers are getting ripped off:

American workers are more likely to be poor (by the standards of their nation). ….
We also get fired more often — and with far less notice. ….
Our government does less for us when we’re out of work than just about anyone else’s. ….
Labor’s share of income has been falling faster in the U.S. than almost anywhere else. ….

OECD Employment Outlook 2018

Source: Organisation for Economic Co-operation and Development, July 4, 2018

The 2018 edition of the OECD Employment Outlook reviews labour market trends and prospects in OECD countries. Chapter 1 presents recent labour market developments. Wage growth remains sluggish due to low inflation expectations, weak productivity growth and adverse trends in low-pay jobs. Chapter 2 looks at the decline of the labour share and shows that this is partially related to the emergence of “superstar” firms, which invest massively in capital-intensive technologies. Chapter 3 investigates the role of collective bargaining institutions for labour market performance. Systems that co-ordinate wages across sectors are associated with better employment outcomes, but firm-level adjustments of sector-level agreements are sometimes required to avoid adverse effects on productivity. Chapter 4 examines the role of policy to facilitate the transition towards new jobs of workers who were dismissed for economic reasons, underlying the need of early interventions in the unemployment spell. Chapter 5 analyses jobseekers’ access to unemployment benefits and shows that most jobseekers do not receive unemployment benefits and coverage has often been falling since the Great Recession. Chapter 6 investigates the reason why the gender gap in labour income increases over the working life, stressing the role of the lower professional mobility of women around childbirth.

Related:
Press release

WEBINARS

Collective bargaining
Collective bargaining systems are at a crossroads in many OECD countries. In this webinar, we will assess the role that collective bargaining systems play for employment, wages, working conditions, wage inequality and productivity (chapter 3 of the publication). We will also discuss what policy-makers, unions and employers’ organisations can do to adapt their national bargaining systems to the challenges of a changing world of work.

The decline in wage growth
10 years after the beginning of the crisis, there are finally more people with a job than before. Yet, wage growth remains considerably below pre-crisis trends. In this webinar, we will address factors behind the persistent wage growth slowdown (chapter 1 of the publication). While low inflation and productivity growth explain much of these patterns, the dynamics of low-pay jobs and the wages associated to them also play a significant, but understudied, role.

KEY COUNTRY FINDINGS
United States

The Case For More Labor Unions Is The Most Obvious Case You Can Possibly Imagine
Source: Hamilton Nolan, splinter, July 5, 2018

….The Organization for Economic Cooperation and Development’s new annual Employment Outlook report is a particularly useful tool for gauging how the United States measures up to the rest of the developed world in terms of economic policies and outcomes. In this context, we have a lot of work to do: “The low-income rate in the U.S. [defined as the share of the working-age population living with less than 50% of median household disposable income] is one of the highest in the OECD,” the report says. “The rate in the U.S. is 14.8% compared to an OECD average of 10.6%. The lowest rate is found in the Czech Republic at just 5.8%.”….

Is it great to be a worker in the U.S.? Not compared with the rest of the developed world.
Source: Andrew Van Dam, Washington Post, Wonkblog, July 4, 2018

The U.S. labor market is hot. Unemployment is at 3.8 percent, a level it’s hit only once since the 1960s, and many industries report deep labor shortages. Old theories of what’s wrong with the labor market — such as a lack of people with necessary skills — are dying fast. Earnings are beginning to pick up, and the Federal Reserve envisions a steady regimen of rate hikes.

So why does a large subset of workers continue to feel left behind? We can find some clues in a new 296-page report from the Organization for Economic Cooperation and Development (OECD), a club of advanced and advancing nations that has long been a top source for international economic data and research. Most of the figures are from 2016 or before, but they reflect underlying features of the economies analyzed that continue today.

In particular, the report shows the United States’s unemployed and at-risk workers are getting very little support from the government, and their employed peers are set back by a particularly weak collective-bargaining system…..

The Union Advantage for Women

Source: Elyse Shaw, Julie Anderson, Institute for Women’s Policy Research, C463, February 2018

From the summary:
Labor unions deserve credit for many of the workplace policies that Americans now take for granted—a 40-hour work week, a minimum wage, pay for overtime, and protections from health and safety hazards—and the labor movement continues to champion state and local policies such as paid sick days and paid family leave, policies that are beneficial to all working women and families. Because hiring, pay, and promotion criteria and decisions are more transparent for union members, gender and racial bias is minimized. Women, and especially women of color, who are either affiliated with a union or whose job is covered by a union contract, earn higher wages and are much more likely to have employer-provided health insurance than women who are not in unions.  

Among women working full-time, those in unions have median weekly earnings of $942, compared with $723 for non-union workers, an increase of $219, or 30 percent (Figure 1). For all of the major racial and ethnic groups of women, median earnings are higher when comparing full-time workers in unions with full-time non-union workers. The earnings advantage is largest for Hispanic women. Non-union Hispanic women have the lowest earnings of any racial/ethnic group of women, $565 weekly, but Hispanic women in unions earn $264 more weekly, a 47 percent increase, than those who are not.

The Union Effect in California

Source: University of California, Berkeley Center for Labor Research and Education, Institute for Research on Labor and Employment, 2018

From the summary:
“The Union Effect in California” is a three-part series exploring the ways in which unions affect the lives of all working people—both union members and nonunion members—in California. The studies were conducted as the U.S. Supreme Court prepares to issue a ruling in Janus v. American Federation of State, County, and Municipal Employees that threatens to weaken public sector unions.  

The first study, Wages, Benefits, and Use of Public Safety Net Programs, shows that by bargaining together through unions, California workers increase their earnings by approximately $5,800 per worker annually, for a combined total of $18.5 billion. Union workers also have more access to health and retirement benefits, thereby reducing reliance on the state’s public safety net programs.
By Ken Jacobs and Sarah Thomason    

The second study, Gains for Women, Workers of Color, and Immigrants, shows that, while all workers in California have higher wages and greater access to benefits when covered by a union contract, those workers who earn the least in nonunion workplaces—women, people of color, and immigrants—gain the most.
By Sarah Thomason and Annette Bernhardt      

The third study, A Voice for Workers in Public Policy, analyzes unions as a countervailing force to corporate power in the state. It explores union-backed policies promoting the rights of workers—union and nonunion alike—and addressing broader issues facing working families in the state. Included are policies in the areas of minimum wage, worker benefits, workplace safety, wage theft, employment-based sexual harassment, whistleblower protections, education, immigration, consumer protections, infrastructure and housing, climate policy, and criminal justice.
By Jenifer MacGillvary and Ken Jacobs

Do We Need a Universal Basic Income? A Debate.

Source: Matt Bruenig, rebuttal by Rohan Grey and Raúl Carrillo, In These Times, June 2018

Getting free money from the government is popular. But would it prop up capitalism?

Related:

Do We Need a Federal Jobs Guarantee? A Debate.
Source: Rohan Grey and Raúl Carrillo, rebuttal by Matt Bruenig, In These Times, June 2018

Sens. Kirsten Gillibrand, Cory Booker and Bernie Sanders have all proposed a job guarantee. But would it be drudgery?

Out of Reach 2018

Source: Andrew Aurand, Dan Emmanuel, Diane Yentel, Ellen Errico, Jared Gaby-Biegel, Emma Kerr, National Low Income Housing Coalition, June 2018

From the press release:
…. The Out of Reach report shows the Housing Wage for every state, metropolitan area, and county in the country. The Housing Wage is the hourly wage a full-time worker must earn to afford a modest rental home without spending more than 30% of his or her income on housing costs. The report compares the Housing Wage to average renter wages and minimum wages, as well as wages in the fast-growing occupations, nationally. The report also shows how many hours an individual must work each week for all 52 weeks per year at the prevailing minimum wage to afford a modest one- and two-bedroom apartment at the Fair Market Rent. Out of Reach 2018 also provides Housing Wages for ZIP codes in metropolitan areas. ….

Related:
Interactive map

Certificates in Oregon: A Model for Workers to Jump-Start or Reboot Careers

Source: Anthony P. Carnevale Neil Ridley Megan L. Fasules, Georgetown University, Center on Education and the Workforce, 2018

From the press release:
Certificate recipients in Oregon ages 29 or younger reap sizable earnings gains, in some cases more than doubling their pay, as they build their skills and enter the workforce, according to a new analysis of community college programs in the state. The Georgetown University Center on Education and the Workforce (Georgetown Center) report, Certificates in Oregon: A Model for Workers to Jump-Start or Reboot Careers, highlights the role of certificates for people seeking to enter the labor market, an issue that has drawn increasing attention from policymakers in Washington, DC and across the nation.

The new analysis is based on state-level data that sheds light on their labor market value by field of study and their impact on both college-age students entering the labor market and adults established in the workforce. It also shows the importance of major national and state investments in data systems that have allowed states like Oregon to track the earnings returns of particular credentials.