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.

Labor law failings, workplace organizing challenges, and possibilities for union renewal

If you follow the news it must seem like joining a union is a step outside the norms of US law.  Afterall, the media is full of stories about how big companies like Starbucks and Amazon threaten their pro-union workers with dismissal, spy on their employees and deny them the right to meet and share information during legally mandated break and meal times, require their workers to participate in 1-on-1 and group meetings with managers where they are routinely told lies about what unions do and the consequences of unionization, find ways to delay promised union elections, and refuse to negotiate a contract even after workers have successfully voted for unionization. 

Yet, the National Labor Relations Act, which is the foundational statute governing private sector labor law, boldly asserts that workers should be able to freely organize to improve the conditions of their employment.  As the National Labor Relations Board (NLRB) states:

The National Labor Relations Act forbids employers from interfering with, restraining, or coercing employees in the exercise of rights relating to organizing, forming, joining or assisting a labor organization for collective bargaining purposes, or from working together to improve terms and conditions of employment, or refraining from any such activity.

So, one might reasonably ask, how do businesses get away with the kind of behavior highlighted above?  One answer is that a series of Supreme Court decisions and NLRB rulings have reinterpreted the country’s labor laws in ways that have given employers a free pass to engage in a variety of anti-worker actions.  Another is that Congress has refused to adequately fund the NLRB, leaving the organization unable to hire sufficient staff to do the needed investigations of worker complaints and oversee elections even during the rare periods when the NLRB has actively sought to protect worker rights.

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?

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. 

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.  

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.

US workers in motion: an assessment of labor’s gains

The news has recently highlighted labor’s growing activism, publishing numerous stories about high quit rates, threatened and actual strikes, and wage gains.  While these stories do capture the anger and determination of workers who have suffered through the pandemic with limited compensation for dramatically increased workloads while watching profits soar, they also paint an overly optimistic picture of the gains being made. And now, the media seems mesmerized by the threat of inflation, with those advocating austerity increasingly given prominent play.  The reality is that the labor movement has a long struggle ahead and it should not be distracted by unwarranted fears of inflation.

Economic inequality means retirement insecurity for most US households

This is far from a “hot take”: financial wealth in the United States is highly concentrated, with most households, especially Black and Hispanic households, owning few financial assets.  One consequence is that many Americans are likely to face a very challenging retirement.  Sadly, if economic and social conditions remain as they are, we can expect to see an ever-growing number turn to for-profit crowdfunding platforms, like GoFundMe, for help in meeting expenses. 

The study

A recently published study by the National Institute on Retirement Security, a non-profit research and education organization, using data from the Federal Reserve’s Survey of Consumer Finances, paints a disturbing picture of the distribution of financial assets by generation, net worth and race. 

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 4^th 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. 

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.