Slip slidin’ away—the disappearing practice of overtime pay

Slip slidin’ away—that is what tends to happen to pro-worker reforms in our economic system.  Things are structured so that without constant vigilance and struggle on our part, gains are gradually undone.  A case in point: overtime pay.

It wasn’t that long ago that most workers in the US were eligible for time and half pay for every hour worked beyond a 40-hour work week.  Employers didn’t agree to overtime pay out of the goodness of their hearts.  They did it because worker organizing and activism pressured Congress to pass a labor law requiring, although with some important exceptions, the payment of overtime wages.  Now, a significant number of workers no longer have the right to overtime pay. For example, in 1975 more than 60 percent of salaried workers automatically qualified for time and half pay.  That share fell to a low of 4 percent in 2000 before slowly rising to 15 percent in 2020.

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It’s past time for a $15 federal minimum wage

President Biden’s 2022 State of the Union Address included a call for a $15 federal minimum wage.  According to an Economic Policy Institute study, a phased increase to a $15 federal minimum wage by 2025 would raise the earnings of 32 million workers—21 percent of the workforce, no small thing. 

The current federal minimum wage is $7.25.  The federal minimum wage was established in 1938, as part of the Fair Labor Standards Act.  Congress has voted to raise it 9 times since then, the last time in 2007.  That last vote included a mandated three step increase that brought it to its current level in July 2009. 

It has been 13 years since the last increase in the federal minimum wage, the longest period since its establishment without an increase.  Taking inflation into account, workers paid the federal minimum wage in 2021 earned 21 percent less than what their counterparts earned in 2009, and prices keep rising.  Outrageously, this eroding federal minimum wage continues to set the wage floor in 20 states. Where is the justice in that?

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Don’t believe the hype, big finance continues to threaten our survival

According to defenders of the status quo, the best response to our most serious problems is to let markets work their magic; government regulation of private business activity only makes things worse.  That is certainly the line that big finance is pushing when it comes to our ever-worsening climate crisis.

A case in point is the growing popularity of ESG investing, which stands for Environmental, Social, and Governance responsive investing.  You want to save the world, put your money in ESG funds which, according to money managers, will guarantee that your money rewards those companies that value sustainability as well as human and worker rights.  What could be simpler. 

One problem with this strategy is that ESG investing is largely a fraud, one that allows leading asset management companies to dramatically boost their profits, and the rest of the business community to continue on with their destructive business practices without fear of bad publicity or public action.  The end result—the planetary crisis continues unabated and the investing public gets fleeced.

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Making the Green New Deal real: lessons from the World War II conversion experience

The Green New Deal has become a rallying cry for activists seeking to build a mass movement capable of addressing our ever worsening, and increasingly interrelated, climate and social crises.  Building such a movement is no simple task, but I believe that our organizing efforts can greatly benefit from a careful study of the rapid transformation of the US economy from civilian to military production during World War II. 

In two recent publications, with links below, I describe and evaluate the planning process responsible for the wartime transformation and offer my thoughts on some of the key lessons to be learned. In what follows I highlight some of the reasons why I believe Green New Deal advocates would benefit from careful study of the wartime experience.

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Once again austerity proponents tell it like it isn’t

There appears to be growing consensus among economists and policy makers that inflation is now the main threat to the US economy and the Federal Reserve Board needs to start ratcheting up interest rates to slow down economic activity.  While these so-called inflation-hawks are quick to highlight the cost of higher prices, they rarely, if ever, mention the costs associated with the higher interest rate policy they recommend, costs that include higher unemployment and lower wages for working people. 

The call for tightening monetary policy is often buttressed by claims that labor markets have now tightened to such an extent that continued expansion could set off a wage-price spiral.  However, the rapid decline in the unemployment rate to historically low levels, a development often cited in support of this call for austerity, is far from the best indicator of labor market conditions.  In fact, even leaving aside issues of job quality, the US employment situation, as we see below, remains problematic.  In short: the US economy continues to operate in ways that fall far short of what workers need. 

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The U.S. experience: racism and COVID-19 mortality

Are you searching for a way to highlight the negative consequences of racism? Try this: Justin M. Feldman and Mary T. Basset, in a recently published study, found that if everyone living in the United States, aged 25 years or older, died of COVID-19 at the same rate as college-educated non-Hispanic white people did in 2020, 48 percent fewer people would have died, 71 percent fewer people of color would have died, and 89 percent fewer people of color aged 25-64 would have died.  

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The dollar costs of inequality: They are greater than you think

Pretty much everyone accepts that inequality is a big problem in the US.  But it is doubtful that most people truly grasp how successfully US elites have captured the benefits of economic growth and, as a result, how much the resulting inequality has cost them.  Here is one estimate of that cost—according to Carter C. Price and Kathryn A. Edwards, authors of a Rand Education and Labor study on income trends:

[the] aggregate income for the population below the 90th percentile . . . would have been $2.5 trillion (67 percent) higher in 2018 had income growth since 1975 remained as equitable as it was in the first two post-War decades. From 1975 to 2018, the difference between the aggregate taxable income for those below the 90th percentile and the equitable growth counterfactual totals $47 trillion.

That $2.5 trillion was enough to give each and every worker in the bottom nine income deciles an additional $1144 a month, every month of the year. That is life changing money for tens of millions—and that is only a partial measure of the costs of inequality.

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Pandemic economic woes continue, but so do deep structural problems, especially the long-term growth in the share of low wage jobs

Many are understandably alarmed about what the September 4th termination of several special federal pandemic unemployment insurance programs will mean for millions of workers.  Twenty-five states ended their programs months earlier, with government and business leaders claiming that their termination would spur employment and economic activity.  However, several studies have disproved their claims.

One study, based on the experience of 19 of these states, found that for every 8 workers that lost benefits, only one found a new job.  Consumer spending in those states fell by $2 billion, with every lost $1 of benefits leading to a fall in spending of 52 cents.   It is hard to see how anything good can come from the federal government’s willingness to allow these programs to expire nationwide. 

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Playing the capitalist game: heads they win, tails you lose

According to an Economic Policy Institute report, between 28 and 47 percent of U.S. private sector workers are subject to noncompete agreements.  In brief, noncompete agreements (or noncompetes) are provisions in an employment contract that ban workers from leaving their job to work for a “competitor” that operates in the same geographic area, for a given period of time.  In a way, it’s an attempt to recreate the power dynamics of the employer-dominated company towns of old—with workers unable to change employers if they want to continuing working in the same industry.

It is not just top executives that are forced to accept a noncompete agreement.  Companies also use them to restrict the employment freedom of many low wage workers, including janitors, security guards, fast food workers, warehouse workers, personal care aids, and room cleaners.  In fact, the Economic Policy Institute estimates that almost a third of all businesses require that all of their workers sign noncompetes, regardless of their job duties or pay.

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Learning from history: community-run child-care centers during World War II

We face many big challenges.  And we will need strong, bold policies to meaningfully address them.  Solving our child-care crisis is one of those challenges, and a study of World War II government efforts to ensure accessible and affordable high-quality child care points the way to the kind of bold action we need. 

The child care crisis

A number of studies have established that high-quality early childhood programs provide significant community and individual benefits.  One found that “per dollar invested, early childhood programs increase present value of state per capita earnings by $5 to $9.”  Universal preschool programs have also been shown to offer significant benefits to all children, even producing better outcomes for the most disadvantaged children than means-tested programs.  Yet, even before the pandemic, most families struggled with a lack of desirable child-care options.    

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