Source: Christopher Ingraham, Washington Post, Wonkblog, February 5, 2018
Last summer, a paper on the effects of Seattle’s minimum-wage increase made national headlines with its conclusion: The change made low-income workers worse off, not better, because it forced employers to cut back on hiring and hours to afford paying higher wages. …..
…. A little more than six months later, and minds have indeed been changed — among them Autor’s. He now says that other recent minimum-wage papers have underscored the limitations of the Seattle study.
Chief among those newer papers is a large analysis of the effects of minimum-wage increases that have occurred since 1979. That paper, co-written by Arindrajit Dube of the University of Massachusetts, was recently presented at the American Economic Association’s annual conference….
The effect of minimum wages on the total number of jobs: Evidence from the United States using a bunching estimator
Source: Doruk Cengiz, Arindrajit Dube, Attila Lindner, Ben Zipperer, April 30, 2017, Presented at the American Economic Association 2018 meeting
Source: Kody Carmody, Econ Focus, Third Quarter, 2017
Concerns about the effects of automation have brought an old policy proposal back into the limelight. …. Today, a new set of techno-optimists argue that coming advances in automation and artificial intelligence will finally fulfill Keynes’ prediction, replacing most human labor. Even if machines don’t cause widespread unemployment, they have caused and surely will continue to cause substantial labor market shocks in specific industries. These concerns have breathed new life into the discussion over a policy now called universal basic income, or UBI.
Many variations have been proposed, but UBI generally refers to regular cash payments that would go to individuals regardless of work status or income (that’s the “universal”) and would cover some minimum standard of living (that’s the “basic”). ….
At the same time, questions remain about how it could be done and its effects…..
Source: Grant Suneson, Michael B. Sauter and John Harrington, 24/7 Wall St., January 9, 2018
Several dozen American cities, counties, and states raised local minimum wages on January 1. In a few California cities, the minimum wage increased by $2.00 or more per hour. In places like Berkeley, San Francisco, and Mountain View — the latter famously home to the headquarters of Google — the minimum wage increased to $15.00 an hour. Workers rights activists frequently target $15.00 as a living wage.
In addition to the 39 states and municipalities that increased the minimum wage on or around New Year’s Day, 11 more plan to raise the minimum later this year, most of them on July 1. Two — Milpitas, CA and Minneapolis, MN — will raise the minimum twice during the year. Some increases are small, automatic raises meant to account for the inflation-driven rising cost of living, but others are part of larger planned increases that will continue in the years to come.
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.
Source: Bryce Covert, In These Times, November 2017
Alabama wrote its 1901 constitution to “establish white supremacy.” Workers in a majority-black city say it’s Jim Crow all over again. ….
Just two years ago, these Fight for $15 workers and their allies won a minimum wage increase to $10.10 in Birmingham. It was short-lived. State lawmakers intervened before the law took effect, passing a preemption bill that undid the work of the City Council and the will of its constituents. Since Alabama doesn’t even have its own minimum wage, minimum-wage workers still make the federal wage of just $7.25 an hour.
“We want $10.10, we gonna do it again,” the crowd chanted.
The workers are using protests to pressure corporate employers and state legislators to raise their pay. But they’re not counting on it happening voluntarily. On April 28, 2016, workers in Birmingham filed a lawsuit accusing the state of racial animus and violating the U.S. Constitution’s 14th Amendment guarantee of equal protection.
The lawsuit offers a novel approach in a struggle taking place across the country as blue cities battle red states for self-determination. Republicans often extoll the virtue of local governmental control, but not, it seems, when it comes to progressive change…..
Source: Stephanie Luce, Employee Relations, Vol. 39 Issue 6, 2017
From the abstract:
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.
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.
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.
This paper is a general summary of the last 20 years of living wage campaigns. It does not include new research.
Source: David A. Graham, The Atlantic, August 29, 2017
After a Missouri law took effect on Monday, the wage floor in the city was reduced to $7.70 per hour after three months at $10 per hour—the latest case of a state cracking down on a city that had enacted a progressive policy.
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.
Source: Ashley Dejean, Mother Jones, August 8, 2017
Chris Wilson is 33 years old and has Down syndrome. For the last three years, he’s worked at Kandu Industries, a packaging and assembly factory in Janesville, Wisconsin. He usually makes between $2 and $3 an hour, depending on whether he is packing brackets used in playground equipment or packaging food.
…. Kandu Industries can pay Chris and roughly 150 other workers substantially below the federal minimum wage of $7.25 an hour because of a 1938 provision in the Fair Labor Standards Act that permits employers, who apply to the Department of Labor for a waiver, to pay lower wages to people with disabilities. According to the department, about 20 percent of people with disabilities participate in the workforce, and of that group, about 3 percent, or approximately 195,000 workers, are being paid subminimum wages. These workers typically make well below the minimum wage, sometimes as low as “pennies per hour,” according to the Department of Justice…..
Source: David Calnitsky, Jonathan P. Latner, Social Problems, Vol. 64 no. 3, 2017
From the abstract:
This paper examines the impact of a guaranteed annual income experiment from the 1970s called the Manitoba Basic Annual Income Experiment (Mincome). We examine Mincome’s “saturation” site located in Dauphin, Manitoba, where all town residents were eligible for payments. Would people work less if their basic needs were guaranteed outside the market? Never before or since the Dauphin experiment has a rich country tested a guaranteed annual income at the level of an entire town. A community-level experiment accounts for the fact that people make decisions in a social context, not in isolation. Using hitherto unanalyzed data we find an 11.3 percentage point reduction in labor market participation, and nearly 30 percent of that fall can be attributed to “community context” effects. Additionally, we show that withdrawals were driven disproportionately by young and single-headed households. Participants who provide qualitative explanations for work withdrawals typically cite care work, disability and illness, uneven employment opportunities, or educational investment.