USA Today’s Susan Page recently interviewed Secretary of Labor Thomas Perez. She asked Perez about a paradox in the current economic recovery: unemployment is down with little increase in wages. Perez said that there is still “slack” in the market, which would mean that unemployment would have to go even lower to drive increased wages. He also discussed a White House Summit on Workers, which will take place on October 7, 2015. This sounds like good news, but what results will it bring? Perez captured the general mood of American workers this way: “They’re hard and falling behind.” Page cast this as a “disparity between the wealthy and the middle of the workforce.” I would respectfully disagree. From the Occupy protests to the ongoing Fight for 15, low wage working people are voicing their frustration and demanding justice in a way that the middle class is not. That said, most American (I’d guess 70-80%) are feeling anxiety and a lack of security. President Obama put it best when he said, “America needs a raise.”
Bloomberg is one of my favorite sources to learn about the economy and how it affects workers. Dan Moss, Bloomberg’s Executive Editor for Economy, has a short article on a good measure to understand how to gauge changes in hourly earnings. The Employment Cost Index (ECI) is a quarterly report from the Bureau of Labor Statistics. According to Moss, it “looks at how much employers are compensating the same position over a period of time. In other words, what is the pay of a builder, or plumber, or, God forbid, a journalist for a job over a period of time.” He says the number to watch is 2%, which is where the index has been stuck for a long time. Moss cites a forecast by Morgan Stanley that says the index will move to 2.6%, which he calls “encouraging.” I hope this is good news. In any case, it is good to have another tool to analyze what we are earning.
P.S. USA Today reported the latest ECI data, and the news was ugly. The second quarter increase was only 0.2%, "the slowest pace on record dating to the early 1980s." The article goes on to discuss how this lack of growth is odd given drops in unemployment. Employers should have to pay more to hire new employees and keep existing employees in a tight labor market. I will keep watching this topic and follow up with other news and views about how our very strange economy affects workers.
Why do Germans tend to carry more cash in their pockets than people in the U.S.? This sounds like a weird question, but I think it says a lot about workers’ rights. An article from USA Today (via the Chicago Sun-Times) reports that the average German saves more than Americans, and they use credit cards less. The average German carries $123 in cash compared to $74 for Americans. Where 53% of Americans have credit cards only 32% of Germans use them. The article cites history as the cause of this difference: “Germany’s cash obsession is deeply rooted in the scare from its economic crisis between World War I and II.” Later, it claims, “After losing WWII and suffering massive destruction, Germans believed frugality and hard work would help them recover.”
I do not dispute these claims. But I think there maybe another important reason that Germans can pay cash and keep more of it in their pockets: They are better paid and have more rights as employees. According to a 2011 study by the Bureau of Labor Statistics, German workers earned $47.38 dollars per hour compared to $35.33 for the average American worker. German Workers also receive more vacation time (six week on the average) and more of a safety net during times of high unemployment. While historical factors may affect how Germans think about cash, they also have more of it and a better sense of job security. I think Americans also believe in hard work and frugality, but too many of them aren’t making enough money. America needs a raise.
The website 24/7 Wall Street reports that the Los Angeles City Council is debating a raise in the minimum wage that would bring the wage to $13.25 in 2017 and $15.25 by 2019. Critics says this measure would cost jobs. The problem with that claim is that the wage will be phased in over 5 years. If a business cannot adapt in that time period, that company is not viable. The report also said that companies in L.A. might move to nearby communities with lower minimum wages. There’s a simple solution to that problem: raise the national minimum wage. America needs a raise.
Last week The Chicago Tribune reported that several large companies are bringing their call centers back to the U.S. While more Americans will be employed because of this shift, the news isn't all good. Many call centers pay low wages and offer little in the way of benefits or career path. Call center workers need to be smart and articulate. They have to solve problems while an angry customer often lashes out at them. How much are they paid for this service. According to the Tribune article, the average pay is $22,000 to $45,000 per year ($11 to $22 per hour). America needs these jobs. It also needs a raise.
Huffington Post offers an interesting take on Americans’ attitude toward work and time off. 16% of people worked would trade 20% less pay for 20% less work. While this statistic is interesting, it reveals two big problems in our current work economy:
- So many people are living so close to the edge that they can’t even pretend to be to do this.
- Some people still have good jobs, or they could not answer the question in the affirmative. For a person making $50,000 a year, 20% is $10,000. Not many Americans could give that much up and still continue to live in their current manner.
The question is interesting. What it tells us about American workers is even more interesting: We’re overworked, underpaid, and highly stressed. America needs a raise.
Sarah Jaffe of In These Times reports on an effort in Minnesota to fine companies that pay wages so low that employees have to be on state aid. Take Action Minnesota is promoting what it call the “bad business fee,” a fine for each employee who is working while on some form of federal or state support. Jaffe cites a study that claims Walmart employees receive $6.2 billion per year in some form of assistance. That’s $6 billion the American taxpayer is paying to subsidize the nation’s largest private employer – corporate welfare. Jaffe gives several other compelling examples, and I urge you to read her article.
As progressive radio host Thom Hartmann is fond of saying, a business that can’t pay its employees a living wage shouldn’t be in business. People who work for a living shouldn’t have to rely on services that are meant for the poor or unemployed. If we want to promote the work ethic and the dignity of work, we should be as will to say that all workers deserve a living wage. America needs a raise.
A report in Common Dreams contradicts the myth that raising the minimum wage is a “job killer.” The 13 states that have raised the minimum wage have seen more job growth than states that have resisted change. The article cites a poll in which 61% of small business owners support a hike in the minimum wage. These facts would seem to be good news. However, in our current political environment, facts do not seem to matter. Until something changes about how issues are solved in Washington, the battle for the minimum wage will be fought on the state and local level. America needs a raise.
Life is settle a matter of white and black. Hobby Lobby has come under fire for its role in the Supreme Court’s decision that will let the company not pay for certain kinds of birth control. As someone who supports workers’ rights, this case bothers me and makes me afraid that much worse is to come from the Supreme Court. On the issue of minimum wage, however, Hobby Lobby is something of a trailblazer. According to Demos, a left-leaning think tank, the company raised its minimum wage to $14 per hour in 2013. Demos points out that Hobby Lobby will win greater worker loyalty by paying a higher wage. It also is closed on Sunday, which means that every employee gets that day off. However, a year later, the company has lost some of that good will by its stance on paying for birth control options. An employee who is forced to pay for contraception might resent this restriction and the religious motivation behind it. My fear is that the Hobby Lobby case and other recent Supreme Court decisions will let companies take even more liberties with workers’ rights. What if a company says that its religious beliefs require women to dress a certain way? What if a company refuses to hire gays based on religious beliefs? I can’t argue with what Hobby Lobby pays as a minimum wage, but the Supreme Court's decision that a company’s religious beliefs puts us on a very slippery slope.
Recently I posted on a debate between union leaders and restaurant owners over the minimum wage. That debate focused on what workers earn. Laura Clawson of Daily Kos flips the question: Let’s look at the earnings of restaurant CEOs. Between 2006-2013, incomes of large corporate restaurant CEOs increased from 621% ratio to the minimum wage to 721%. Clawson notes that these well-paid CEOs often hire well-paid lobbyists to sell their sob stories. As I noted in my last post on this topic, a business person who owns a hot dog stand or small restaurant might have a different argument. CEOs of large corporations can’t make the same claim. They have taken raises and bonuses while their employees have been forced to apply for food stamps and Medicaid. America needs a raise.
- 1 of 2
- next ›