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Economy

Nearly 1 Million Workers Will Receive A Pay Boost In January Due To Minimum Wage Increases

Nearly one million workers will see their pay increase in January due to scheduled increases in the minimum wage, according to a release by the National Employment Law Project. These workers in in Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Rhode Island, Vermont, and Washington will have their hourly pay rise by between 10 and 35 cents per hour, “resulting in an extra $190 to $510 per year for the average directly-affected worker,” NELP found. This table shows the increases in each state:

If the federal minimum wage had kept up with inflation since the 1960s, it would be over $10 today, a far cry from the current $7.25. And as the Economic Policy Institute noted, “Based on current projections of inflation growth over the next ten years, the federal minimum wage will lose nearly 20 percent of its purchasing power by 2022, equaling $5.99 in today’s dollars.”

Nearly one in four American workers is expected to be in a low-wage job over the next decade (which doesn’t just harm the individual worker, but is detrimental to the workers’ children). Raising the minimum wage would especially benefit women, as “women comprise 54.5 percent of workers who would be affected by a potential minimum-wage increase.”

Economy

Low-Wage Jobs Don’t Just Harm Workers — They Harm Their Children

The recent report by the Pew Research Center that births per every 1000 American women have dropped to historic lows kicked off a flurry of concern amongst conservatives that American culture is beginning to undervalue the future. However, that concern ignores the rather dismal job the country’s economy is doing to care for the children Americans are already having — and the way conservative policy preferences are exacerbating the problem. In particular, Amanda Marcotte flagged a recent round-up of studies at The American Prospect detailing the ways low-wage jobs not only harm the workers who hold them, but can harm the children of those workers as well.

One out of every five children ages 12 to 17 currently live in a low-income family — one making twice the federal poverty level or less. And as the recent round of labor protests against Walmart and the fast food industry highlighted, two out of every three jobs the United States is predicted to produce over the next decade will be low-wage and will not require more than a high school diploma. The proliferation of low-wage work as an ever greater share of America’s job supply can have all sorts of damaging effects on the country’s future generations, as the paper found:

Low-wage work prevents parents from participating in their children’s development. Many low-income parents face longer hours, unusual hours, inflexible schedules, and lack benefits such as paid sick days, paid medical and parental lave, and vacation. This prevents them from providing the same attention and care to their children as higher income parents — often forcing a choice between their family and their income. They’re often less able to involve themselves in their child’s schooling, or to even ensure the child regularly attends class and completes homework. The kinds of jobs to which low-income parents are constrained are even associated with higher levels of depression, which of course effects the emotional health of the family as a whole.

Children of low-wage parents are often forced into the labor market early themselves. Bringing in enough money for the family to make ends meet can often force low-income youth themselves into the labor market prematurely, which can damage their socialization, development, and schoolwork. While studies of the effect of work on youth is mixed — with some positive results in terms of experience, literacy, and positive social influences — multiple investigations have also found a negative correlation between how much young people work at a job and how well they perform in high school. In one investigation of teens who dropped out of high school, 29 percent cited family concerns as a reason for leaving. The demands placed on low-wage parents can force their children into roles caring for other family members at a young age, or to take care of themselves.

Children of low-wage parents are more likely to face educational difficulties. Low-income youth are three times more likely to drop out of high school than middle-class youth, and six times as likely as young people from high-income families. Less than half of low-income youth between the ages of 18 and 24 remain consistently involved in school or connected to the labor market. As for higher education, a 2010 paper found that three quarters of students listed their family as “their top source for college support” and “the place they turn most for help” — precisely the kind of support low-wage work can prevent a parent from providing.

These trade-offs can trap parents in economic or familial hardship. Often times, advancing out of low-wage jobs requires an employee to take on longer or more unusual hours — something parents are less able to do. Thus a feedback loop begins in which low-wage parents must sacrifice the developmental needs of their children to raise the family’s standard of living, or in which parents refuse offers of higher-paying jobs precisely because they do not want to leave their children without the attention they need.

Children of low-wage parents are more at risk for health problems. Children of low-income parents are more likely to suffer from obesity, and female teenagers in low-income families are more likely to become pregnant, again largely because of how the demands of low-wage work can hamper parental involvement in their children’s lives.

All these effects are particualrly pronounced for minority, immigrant, and single-parent families. The paper — by Lisa Dodson at Boston College and Randy Albelda at the University of Massachusetts, along with Diana Salas Coronado and Marya Mtshali — recommends policy responses including more paid sick and parental leave for workers, more vacation time, more schedule flexibility for workers, and efforts to increase hourly wages.

Economy

New Jersey GOP Uses Hurricane Sandy To Oppose Minimum Wage Hike

The New Jersey State Senate voted yesterday to increase the Garden State’s minimum wage to $8.50 per hour, a $1.50 raise that would be effective March 1st. Gov. Chris Christie (R-NJ) has threatened to veto the bill, due to a provision that would automatically increase the minimum wage according to inflation.

Several New Jersey Republicans tried to use the recent Hurricane Sandy — which decimated Jersey’s shoreline — as justification for opposing the increase:

The aftermath of Sandy, which changed so much about the state, was ever-present in Thursday’s two-hour debate on the Senate floor, giving another wrinkle to a debate that’s largely a moral and philosophical battle. It was still that on the Senate floor Thursday, with Republicans saying a minimum wage increase would hurt businesses and could force layoffs, and Democrats asserting that it’s wrong for New Jerseyans to be paid so little in a place where it’s expensive to live.

Republican Sen. Jennifer Beck, R-Red Bank, said she supports raising minimum wage but said the storm made this the wrong time to do it. She told of small shore business owners “still sweeping up glass” and wondering if their businesses would survive the winter. “Our Legislature’s first response following a hurricane that devastated thousands is not a helping hand but a greater burden,” she said.

Christie also used that line of reasoning:

The Republican governor said Wednesday that he was “willing to consider a responsible minimum-wage package.” But with many businesses struggling to rebuild after Hurricane Sandy, Christie said, he has concerns about the bill, which would increase the hourly rate to $8.50 from $7.25 by March 1.

“We’ve got thousands of businesses wiped out,” he said at a news conference Wednesday in Trenton. “Is this really now the moment to say to those folks, ‘We’re going to hit you with a $1.25 increase on March 1 and [cost-of-living increases] beyond that?’”

Study after study has shown that minimum wage hikes do not, in fact, hurt business and force layoffs (even during rough economic times). And New Jersey was a premier test case: “University of California, Berkeley, economist David Card and Princeton economist Alan Krueger’s seminal study of the effect of the New Jersey 1992 minimum wage increase comparing fast food industry employment in New Jersey and Pennsylvania found no negative employment effect. In fact, it found stronger employment growth in New Jersey.”

Let’s not hide behind the storm,” said state Sen. Stephen Sweeney (D). “This bill was opposed by many prior to that.” Sen. Richard Codey (D) added, “Can you live on $8.50 an hour? How about these people during the storm, you think they could go to the few diners that were open? They can’t do that.”

Economy

Why New York City’s Fast Food Workers Are Right To Strike For Higher Wages

Fast food workers in New York City are launching a strike today, ahead of the largest unionization drive to ever hit the industry. The walkouts began at 6:30 this morning at a McDonald’s, as workers “protest what they said were low wages and retaliation against several workers who have backed the unionization campaign.”

Workers in the fast food industry have every reason to be upset. As the National Employment Law Project detailed in a report earlier this year, some of the largest fast food chains — including McDonald’s, Kentucky Fried Chicken, Pizza Hut, and Taco Bell — are some of the largest employers of low-wage workers, but are making huge profits as the nation emerges from the Great Recession:

The three largest low‐wage employers in the United States – Wal‐Mart, Yum! Brands (the operator of fast food chains Pizza Hut, Taco Bell, and KFC), and McDonald’s – offer a revealing look at the resiliency of low‐wage employers in the post‐recession economy.

Each of these corporations was profitable during all of the last three fiscal years, and each of them now earns profits that are substantially higher than their pre‐recession levels.

One in four workers is expected to be in low-wage industries over the next decade, and a majority of the jobs added since the recession have been low-wage jobs. Also, as Sarah Jaffe noted in the Atlantic, “these jobs are not being done by teenagers.” “Across the country, the median age of fast-food workers is over 28, and women — who make up two-thirds of the industry — are over 32,” she wrote. If these workers are going to make a living, a strike and unionizing may be the only way to make it happen.

Economy

Without Labor Protections, Domestic Workers Earn Low Wages And Receive No Benefits

America’s domestic home help workers, most of them female minorities, earn low wages and often receive no retirement or health benefits because they lack basic labor protections, according to a first-of-its-kind survey of more than 2,000 domestic workers in 14 American cities. The report from the National Domestic Workers Alliance and affiliated groups found that nearly a quarter of nannies, caregivers, and home health workers make less than the minimum wage in the states in which they work, and nearly half — 48 percent — are paid less than needed to adequately support a family.

Ninety-five percent of domestic workers are female, according to the survey, and the wage gaps that persist throughout the American economy are especially prevalent in the industry. More than half of domestic workers are minority, with 54 percent identifying as Latina, African-American, or Asian. The median hourly wage of white domestic workers is $2.13 an hour higher than it is for Latinas and Asians and $1.14 an hour higher than it is for blacks. But across the industry, wages are incredibly low:

Live-in workers have especially low wages. The median wage for that group is just $6.15 an hour, and 67 percent are paid below their state’s minimum wage. Overall, 70 percent of domestic workers are paid less than $13 an hour, and less than 9 percent make more than $18 an hour. Just 4 percent of live-in workers make more than $18 an hour.

For undocumented workers, who make up a significant portion of the domestic workforce, the wage situation is even worse:

It isn’t just wages, though. Less than 2 percent of all domestic workers receive retirement or pension benefits, and only 9 percent work for employers who pay into Social Security, according to the report. Nearly two-thirds live without health insurance, and only 4 percent receive employer-provided health care. Just 8 percent work for employers who provide a contractual agreement, while two-thirds work under verbal agreements that offer few protections.

The reason the situation is so dire for domestic workers is because they are excluded from standard labor protections. The National Labor Relations Act does not cover domestic workers, meaning they have no guaranteed right to organize or form unions to bargain for wages and benefits. Federal workplace discrimination laws also largely exclude domestic workers because they apply to businesses with multiple employees. As a result, domestic workers are often subject to wage theft and rarely paid for overtime.

States and localities have undertaken efforts in recent years to expand such rights to domestic workers, but many have failed. In 2010, New York passed a law granting basic rights to domestic workers, and Montgomery County, Maryland enacted a similar law in 2008. The most recent high-profile attempt to enshrine domestic worker rights failed in October, when California Gov. Jerry Brown (D) vetoed the Domestic Workers Bill of Rights because he said it left “a number of unanswered questions.” The California law would have covered more than 200,000 of the state’s domestic workers and was opposed by the California Chamber of Commerce and other business groups.

Economy

World’s Richest Woman Suggests Workers Should Make $2 Per Day

The world’s richest woman has equated Australia’s minimum wage to “class warfare,” following her controversial article last week where she called poor workers coddled, lazy drunks. Australian billionaire Gina Rinehart, who inherited her $30 billion fortune and mining empire, pointed to workers who make less than $2 as a model for economic competitiveness in mining:

We must be realistic, not just promote class warfare. Indeed, if we competed at the Olympic games as sluggishly as we compete economically, there would be an outcry.

The evidence is unarguable that Australia is indeed becoming too expensive and too uncompetitive to do export- orientated business. Africans want to work. Its workers are willing to work for less than $2 per day. Such statistics make me worry for this country’s future.

Australia Prime Minister Julia Gillard responded harshly to Rinehart. “It’s not the Australian way to toss people $2, to toss them a gold coin, and then ask them to work for a day,” Gillard said. “We support proper Australian wages and decent working conditions.”

Rinehart’s flawed logic draws on a popular myth among U.S. conservatives, that increasing the minimum wage would impact job and economic growth. But a significant body of research shows that higher minimum wages have no effect on employment levels.

Economy

STUDY: Massachusetts Minimum Wage Legislation Would Give 580,000 Workers A Raise

A century ago, Massachusetts became the first state in the country to pass a minimum wage law. Now, the state legislature is considering legislation to increase its minimum wage — currently at $8.00 an hour, $0.75 above the federal minimum — to $10.00 an hour. If the legislation becomes law, it will give more than a half-million low-wage workers a pay increase and could generate 4,500 new jobs because of increased economic activity, according to a study from the Economic Policy Institute:

Increasing Massachusetts’s minimum wage to $10.00 on January 1, 2013, would give a raise to more than 581,000 of the state’s lowest-paid workers. It would provide nearly $824 million in additional wages to directly and indirectly affected families, who would, in turn, spend those extra earnings. Indirectly affected workers—those earning close to, but still above, the proposed new minimum wage—would likely receive a boost in earnings due to the “spillover” effect (Shierholz 2009), giving them more to spend on necessities. [...]

Using these same standard fiscal multipliers to analyze the jobs impact of an increase in compensation of low-wage workers and decrease in corporate profits that result from a minimum-wage increase, we find that increasing the Massachusetts minimum wage from $8.00 to $10.00 per hour would result in a net increase in economic activity of approximately $522 million and would generate roughly 4,500 net new jobs.

Though Republican lawmakers across the country consistently oppose minimum wage increases on grounds that they hurt job growth, small businesses, and overall economic growth, multiple studies, including EPI’s, contradict those claims. An analysis by the Center for American Progress found that “a significant body of academic research has found that raising the minimum wage does not result in job losses even during hard economic times.”

At the beginning of 2012, scheduled minimum wage increases were set to benefit 1.4 million workers, and such policies tend to benefit women and minorities, workers who typically face pay gaps and other disadvantages in the workplace.

Economy

STUDY: Raising The Minimum Wage Especially Benefits Women

A group of House Democrats are seeking to increase the minimum wage to $9.80 per hour in order to help shrink the ever-increasing gap between the wealthiest Americans and struggling workers. This modest increase to the current $7.25 per hour would help catch the wage up to the rate of inflation, since the buying power of the 1968 minimum wage is the equivalent of about $10.55 an hour today.

A new report from the Economic Policy Institute finds that, while raising the minimum wage to the proposed $9.80 level would have a significant impact on about 28 million low-income workers, it would especially benefit women. As the report puts it, the fact that “women comprise 54.5 percent of workers who would be affected by a potential minimum-wage increase makes it a women’s issue”:

The impact on women varies by state, ranging from the highest percentage of affected women in Mississippi — where 64.4 percent of the low-wage workers who would benefit from a minimum wage hike are female — to 49.3 percent in both California and Nevada. However, California and Nevada are the only states where women do not make up the majority of the low-income workers who would be positively affected by a higher wage.

Despite the fact that millions of women would see their lives improve with an increased minimum wage, conservatives oppose initiatives to raise it, using tired arguments that it will kill jobs and hurt small businesses. In fact, studies show that a higher minimum wage does not impede job growth, especially because the nation’s biggest and most profitable corporations are the biggest employers of minimum wage employees.

Economy

One In Four American Workers Will Be In Low-Wage Jobs For The Next Decade

The share of the economy made up by low-wage jobs has grown since the Great Recession, and according to one new study, it won’t shrink in the future even as the economy continues to recover. The number of Americans working in low-wage jobs — those that pay wages equal to or below the poverty line — will remain steady over the next decade, according to the Economic Policy Institute, as CNNMoney reports:

Some 28% of workers are expected to hold low-wage jobs in 2020, roughly the same percentage as in 2010, according to a study by the Economic Policy Institute.

The study defines low-paying jobs as those with wages at or below what full-time workers must earn to live above the poverty level for a family of four. In 2011, this was $23,005, or $11.06 an hour.

The study is the latest to detail the growth of low-wage occupations in the United States. A recent report from the National Employment Law Project found that more than one in four private sector workers now make less than $10 an hour, an even lower threshold than was used in the EPI study. The five industries that are comprised mostly of low-wage workers, meanwhile, are growing faster than the overall American economy.

While the number of low-wage jobs has increased, so has the gap between low-wage workers and the executives who employ them. The federal minimum wage would need to be raised by more than $3 an hour to match the buying power it had in 1968, and overall wages in the U.S. have been virtually stagnant for decades, even as pay for chief executives has risen exponentially. At the 50 companies that employ the largest number of low-wage workers, chief executives made an average of $9.4 million last year.

Economy

PA Mayor Reaches Settlement With Unions To Pay Back Public Workers’ Wages

Scranton, PA Mayor Chris Doherty

After Scranton, PA Mayor Chris Doherty (D) reduced the pay of hundreds of his city’s public workers — including firefighters, police officers, and other safety workers — to minimum wage earlier this month, three unions challenged the cuts in federal court. In a deal reached today, the mayor has agreed to pay back the wages that the city owes to its public workers. In addition to restoring employees’ wages, Doherty will also award them with interest for the backlogged salaries, Reuters reports:

Mayor Christopher Doherty agreed that the city would pay approximately $750,000 in compensation owed to firefighters, police officers and public works employees, plus at least $5,100 in interest, said Tom Jennings, a lawyer for the employees’ unions.

In exchange, the unions said they would drop their bid to have the mayor held in contempt of court, according to the agreement, reached Saturday and presented to a judge on Monday.

Despite the fact that a federal judge issued an injunction preventing the city from decreasing workers’ pay to minimum wage, Doherty slashed the wages of hundreds of public employees earlier this month, claiming that Scranton could not afford to pay their full salaries.

John Judge, the president of Scranton’s firefighters’ union, said he remains “cautious” about the settlement’s good news for public workers, expressing hope that the city won’t hold workers’ living wages hostage in the future.

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