Category Archives: Compensation

A Vision for a High-Wage America

Source: Michael McCormack and Jeff Madrick, The Century Foundation, October 16, 2017
From the summary:
America has deliberately chosen to be a low-wage society since the 1970s. This status was not thrust upon it inevitably by technological change or globalization, but instead was the result of deliberate policy choices made over the years. America likewise has the ability to reverse course, pursuing a policy agenda that would put it back on the path toward a high-wage economy. ….

…. This report provides an overview of the current state of the U.S. economy, characterized by a sluggish recovery, stagnant living standards, inequality, increasingly volatile and uncertain incomes, especially for low-income Americans, persistent poverty, and declining benefits. Our review below of the economic data and literature will demonstrate the persistence of reduced opportunity and a low-wage America for millions since the 1970s.

The report also explores the deliberate policy choices that led to the low-wage economy that developed in the late 1970s and was solidified by the 1980s and 1990s. There was only a brief reprieve during the full-employment economy of the late 1990s, when wage growth lifted wages for all income levels; even during this time, anti-inflationary monetary policy reduced the bargaining power of workers relative to capital.

After reviewing the political and academic influences that created a low-wage America, the report proposes alternative policy choices to build a high-wage America that extends prosperity to a broader range of workers. The three main pillars of a high-wage economy identified in this report—public investment and industrial policy, education and training, and labor standards and social supports—will guide the Rediscovering Government Initiative’s research and event agendas in the coming months, as it seeks to build an agenda that can return American workers to prosperity…..

What You Should Know

  • Between 1973 and 2015, productivity increased by 73.4 percent, but hourly compensation increased by only 11.1 percent. And that meager wage growth has happened mostly at the top of the income scale. Since the late 1970s, wage growth has stopped for the eightieth percentile of earners on down, and for much of the wage distribution, earnings have actually fallen.
  • Deliberate policy choices since the 1970s have contributed to this wage stagnation, including the attack on labor unions, cuts to social programs, tight monetary policy, tax cuts and free-market economic policies.
  • U.S. manufacturing work is particularly underpaid when compared to other nations. Manufacturing workers in the United States ranked eighteenth out of twenty-seven OECD nations with available data.
    The high-wage agenda requires new approaches to directly confront underemployment and unemployment that may include government acting as an employer of last resort and support for labor organizing, which is now actively thwarted.
  • Rebuilding the nation’s apprenticeship system that still only reaches less than half a million workers, and translating promising high school career academies into respected vocational and career education system that, among other things, can create inclusive access to well-paid skilled blue collar jobs.
  • Violation Tracker – September 2017 update

    Source: Good Jobs First. September 19, 2017

    From the press release:
    An expansion of Violation Tracker, the first public database of corporate crime and misconduct in the United States, now makes it possible to access details of cases ranging from the big business scandals of the early 2000s during the Bush administration through those of the Trump administration to date. …. The expansion nearly doubles the size of Violation Tracker to 300,000 entries, which together account for more than $394 billion in fines and settlements. As a measure of how corporate crime is concentrated within big business, 95 percent of those penalty values were assessed against only 2,800 large parent companies whose subsidiaries are linked together in the database. Approximately 200,000 smaller businesses account for the remaining five percent of the dollar total. ….

    Related:
    Agency Data Sources
    User Guide and Webinar
    Update Log

    Income, Poverty and Health Insurance Coverage in the U.S.: 2016

    Source: U.S. Census Bureau, Press Release, Release Number: CB17-156, September 12, 2017

    Real median household income increased by 3.2 percent between 2015 and 2016, while the official poverty rate decreased 0.8 percentage points. ….

    ….These findings are contained in two reports: Income and Poverty in the United States: 2016 and Health Insurance Coverage in the United States: 2016. This year’s income and poverty report marks the 50th anniversary of the first poverty estimates released by the Census Bureau in the Current Population report series.

    Another Census Bureau report, The Supplemental Poverty Measure: 2016, was also released today. The supplemental poverty rate in 2016 was 13.9 percent, a decrease from 14.5 percent in 2015. With support from the Bureau of Labor Statistics, the Supplemental Poverty Measure shows a different way of measuring poverty in the United States and serves as an additional indicator of economic well-being. The Census Bureau has published poverty estimates using the supplemental poverty measure annually since 2011.

    The Current Population Survey, sponsored jointly by the Census Bureau and Bureau of Labor Statistics, is conducted every month and is the primary source of labor force statistics for the U.S. population; it is used to calculate the monthly unemployment rate estimates. Supplements are added in most months; the Annual Social and Economic Supplement questionnaire is designed to give annual, national estimates of income, poverty and health insurance numbers and rates. The most recent Annual Social and Economic Supplement was conducted nationwide and collected information about income and health insurance coverage during the 2016 calendar year. ….

    Living wages: a US perspective

    Source: Stephanie Luce, Employee Relations, Vol. 39 Issue 6, 2017
    (subscription required)

    From the abstract:
    Purpose
    The purpose of this paper is to provide background on the US living wage movement, with particular attention to recent victories, and also the ways in which the US movement differs from living wage movements in other countries. It begins with some technical distinctions of terms, then analyzes the campaigns and movement for higher wages, and considers some of the challenges the campaigns have faced. It will conclude with some discussion about the future of the movement.

    Design/methodology/approach
    This is a general review of living wage campaigns in the USA. This is based on a review of existing literature and the author’s own prior research and participant observation.

    Findings
    The author argues that the initial living wage movement that began in the early 1990s was limited in scope but successful in building coalitions and political power to launch a much more expansive movement to raise wages in 2012.

    Originality/value
    This paper is a general summary of the last 20 years of living wage campaigns. It does not include new research.

    Corporate Tax Cuts Boost CEO Pay, Not Jobs – 24th Annual Executive Excess

    Source: Sarah Anderson, Sam Pizzigati, Institute for Policy Studies, August 30, 2017

    From the summary:
    House Speaker Paul Ryan is proposing to cut the statutory federal corporate tax rate from 35 to 20 percent. President Trump wants to slash the rate even further, to just 15 percent. Their core argument? Lowering the tax burden will lead to more and better jobs. To investigate this claim, this report is the first to analyze the job creation records of the 92 publicly held U.S. corporations that reported a U.S. profit every year from 2008 through 2015 and paid less than 20 percent of these earnings in federal income tax. Did these reduced tax rates actually lead to greater employment within the 92 firms? The data we have compiled give a definitive — and sobering — answer.

    Golden Parachutes for Public College Presidents Burden Already Thin Budgets

    Source: Jon Marcus, Washington Monthly, August 28, 2017

    Even presidents who leave their campuses awash in red ink walk away with big payouts. …. Often hammered out in secret, and seldom brought to public attention except when they explode into controversy, these kinds of golden parachutes for university and college presidents are not unique to Northern Illinois. And while anger often flares up when presidents’ salaries are publicized, salary totals alone don’t come close to exposing the universities’ true financial obligations to their chief executives. It’s these hidden severance deals that increasingly obligate higher education institutions to continue paying long-departed presidents large amounts for years, further thinning already stretched finances…..

    Newly available wage theft data shows nearly 130 Colorado employers with violations

    Source: Adrian D. Garcia, Denverite, August 24, 2017

    The state of Colorado is starting to name companies that steal wages from their employees, ending decades of businesses being able to shield their identities under claims of trade secret protections.

    Nearly 130 employers have been ordered to pay employees $547,780.90 in back pay and penalties since April 13. The companies were also ordered to pay the state another $170,750 in fines in connection with wage-law violations, according to the data shared Monday by the Colorado Department of Labor and Employment.

    City governments are raising standards for working people—and state legislators are lowering them back down

    Source: Marni von Wilpert, Economic Policy Institute, August 26, 2017

    From the press release:
    Progressive cities are raising their labor standards, but conservative state legislatures are preempting them

    A new report by EPI Associate Labor Counsel Marni von Wilpert analyzes the recent wave of preemption laws that have swept across the country in the last decade. State governments use preemption laws to supersede city or county laws, or prevent local governments from legislating in certain areas at all—including blocking local governments’ efforts to raise labor standards. The paper explores the rise of preemption in five key areas of labor and employment: minimum wage, paid leave, fair work schedules, prevailing wages, and project labor agreements.
    Related:
    Summary

    Unionized College Faculty Are Winning Themselves a Lot of Money

    Source: Hamilton Nolan, Splinter, August 25, 2017

    Unions are not just a feel-good sort of thing to do. New research about higher ed unions shows just how much workers have actually gained from organizing, in a short period of time.

    One of the most active areas of new union organizing in America is higher education: adjunct professors and other academic and non-academic workers on college campuses, who tend to have shockingly low pay and poor job security even though they tend to be highly educated and work in prestigious settings. Those are the sort of ingredients that can motivate people to unionize. And voila: it has been so. And the gains have been clear. Duke University non-tenured faculty members who signed their first union contract this summer immediately got double digit raises and improved job security…..
    Related:
    SEIU Contract Highlights: The Union Difference
    Source: SEIU, Faculty Forward, [2016]
    ….Unionized contingent faculty often have a higher rate of pay, regular salary increases and pay protections on work done outside of the classroom.
    – Across the country, median pay per course was 25% higher for part-time faculty that had union representation…..
    Job Security, Improved Benefits and Professional Development
    Unionized contingent faculty have an increased level of job security, better benefits and 90 percent of SEIU faculty contracts have established professional development funds….

    Unionizing Pays Big Dividend for Professors at Regional Public Universities
    Source: Peter Schmidt, Chronicle of Higher Education, April 3, 2016

    Full-time instructors at regional public universities earn an average of about $21,000, or nearly 25 percent, more in pay and benefits annually if they belong to a union, concludes a groundbreaking new study of compensation at such institutions. The location and size of the employer also makes a big difference. Those in larger suburban public universities, the highest-paying category of institutions studied, earned an average of nearly $17,000, or 20 percent, more in pay and benefits annually than those at midsize rural institutions, the lowest-paying category.

    Skilled Immigration, Innovation, and the Wages of Native-Born Americans

    Source: Asadul Islam, Faridul Islam and Chau Nguyen, Industrial Relations: A Journal of Economy and Society, Volume 56, Issue 3, July 2017
    (subscription required)

    From the abstract:
    The paper examines the effects of skilled immigration on wages that can be credited to immigrants’ contribution to innovation. Using both individual and state-level datasets from the United States, we find a significant and positive effect of immigration on wages that is attributable to skilled immigrants’ contribution to innovation. Our results confirm previous findings that immigrants contribute substantially to the host economy’s innovation, which is a major driver of technological progress and productivity growth. When we augment the analysis to an immigration–innovation–wages nexus, the results suggest that as the share of skilled immigrants in a particular skill group increases, the wages of both natives and immigrants in that group also get a positive boost. We also identify evidence in favor of a positive spillover effect of skilled immigrants on a state’s wage level of all workers, including those who do not directly contribute to innovation.