What is the American Dream, anyway? The phrase “American Dream” is widely attributed to Pulitzer Prize winning author, James Truslow Adams. It first showed up in his 1931 book, The Epic of America. He stated that, “life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement.” It’s the idea that freedom isn’t just about doing whatever you want, but that when you work hard and do your part, you should be able to get ahead and stay ahead. Those are the ideals at the foundation of America. In order for those ideals to prevail, there has to be a strong and well-protected workforce.
I’ve already researched and reported about some aspects of the workforce including clean energy, jobs, infrastructure, and profit-sharing for workers. In future posts, I will address equal pay for women, manufacturing, paid family leave, small businesses, social security and retirement benefits, technology, trade, and workforce skill building. This post will focus primarily on two aspect central to protecting the workforce and pursuing the American Dream: labor unions and the minimum wage.
Labor Unions
Unions provide a voice to a group of workers. Labor unions organizing and negotiating over the years have brought about numerous worker protections including the 40 hour work week, paid leave, overtime pay, child labor laws, workers comp, unemployment insurance, pensions, safety standards and regulations, employer health care insurance, raises, sexual harassment laws, the Americans with Disabilities Act, and holiday pay, among many other protections. Unions use collective bargaining to negotiate wages and other conditions of employment using the concept that they are stronger and more powerful together as one voice instead of separate individuals.
Collective bargaining gives the little guy a big voice. And, there are a lot of people who don’t like that. Wisconsin governor, Scott Walker, made quite the name for himself in 2011 when he pushed to end collective bargaining rights for public workers. Coincidentally, Wisconsin was the first state to offer collective bargaining rights 50 years prior. He claimed that it was for the purpose of cutting costs and shrinking budget deficits. It was an odd claim at the time given that 4 of the 5 states that had already outlawed collective bargaining (Texas, North Carolina, South Carolina, & Virginia) had worse budget deficits than Wisconsin. The fifth, Georgia, still had a deficit of $1.7 billion dollars. So, no state that had ended collective bargaining rights had managed to balance their budgets. Overall, the argument that ending collective bargaining was needed for budget reasons didn’t make a lot of sense. Nevertheless, he was successful and the 2011 Wisconsin Act 10 became law on June 29, 2011 affecting collective bargaining, compensation, retirement, health insurance (it doubled health care premiums for state employees), and sick leave for public employees. Firefighters and most law enforcement workers were exempted from the law.
Why? Well, in the wake of Walker’s success, other states tried to push through similar legislation including Mike Pence’s predecessor, Governor Mitch Daniels of Indiana. He implied that public union workers are overpaid as a result of collective bargaining even though it has been proven that public union workers are paid less than their private sector counterparts. Collective bargaining does not lead to excessive pay of public workers.
So, why really? Unions form part of the backbone of the Democratic party. We all do better when we all do better. We are stronger together. Give the little guy a voice. Everything about unions scream Democrat. Defund the unions and you defund the democratic party. No Republican has won the union vote since Richard Nixon in 1972. It has nothing to do with balancing budgets or overpaid teachers (ha!). This was a clear effort to limit the power of the working people.
Another movement to weaken unions are “Right to Work” laws where workers can opt out of union dues, but still benefit from the collective bargaining power, significantly weakening the union’s funding and power. 26 states have adopted “Right to Work” laws (the green states in the graphic to the left.
Minimum Wage
Current federal minimum wage is $7.25 per hour. Due to inflation, today’s minimum wage is worth less than when its value peaked in 1968. Currently, 29 states have minimum wages above the federal level including Minnesota with a minimum wage of $9.00 per hour. This year California passed a law that increases the minimum wage to $15/hr by January 1, 2022. New York followed suit passing a law to raise the minimum wage to $15/hr by the end of 2018. Washington, D.C. passed legislation to do so by July 1, 2020.
So, how many people actually earn the minimum wage? According to the Bureau of Labor Statistics, “In 2015, 78.2 million workers age 16 and older in the United States were paid at hourly rates, representing 58.5 percent of all wage and salary workers. Among those paid by the hour, 870,000 workers earned exactly the prevailing federal minimum wage of $7.25 per hour. About 1.7 million had wages below the federal minimum. Together, these 2.6 million workers with wages at or below the federal minimum made up 3.3 percent of all hourly paid workers.”
Typically, who are minimum wage workers? About half of them are under the age of 25 with almost a third being teenagers. Two thirds of minimum wage workers are in the service profession either in food prep or serving. A PBS Newshour article from January 1, 2015 said that 62% of minimum wage workers are women and 77% are white. 64% are part-timers.
So, should we raise the minimum wage? Economists are actually pretty split on this. The 2014 Congressional Budget Report took a look at the proposal to raise the federal minimum wage to $10.10. It predicted a loss of 500,000 jobs by the second half of 2016 by forcing low skilled workers like teenagers out of the labor market since theoretically businesses would cut employees and are more likely to keep the more highly skilled employees. On the other hand, the Economic Policy Institute predicted that the same increase would create 85,000 jobs over a three year phase-in period and inject 22.1 billion into the economy based on the concept that the more money people have, the more they spend.
The Congressional Budget Report also predicted that raising the wage to $10.10 would raise 900,000 people out of poverty (in 2014, 45 million people in the U.S. lived in poverty). It would also reduce government welfare spending. The Economic Policy Institute predicted that 1.7 million people would no longer be dependent on government assistance programs which would shave 7.6 billion off of government spending including reducing Supplemental Nutrition Assistance Programs (SNAP-formerly known as food stamps) by 6% or 4.6 million dollars.
Still, I repeatedly found a lot of evidence to support that a more effective way to help the poor would be to expand the earned income tax credit. With this credit, the government subsidizes the wages of workers making under a certain amount and this does not lead to job losses as businesses make cuts to support employees on the new higher wage.
Here is where the candidates stand on labor and workers’ rights.
Clinton: Clinton has plans for investments in infrastructure, manufacturing, research & technology, clean energy, and small business within her first 100 days. Clinton will restore collective bargaining rights for unions. She will work to raise the federal minimum wage to $12 and supports the “Fight for $15” in some states. She supports the Obama administration’s expansion of overtime rules. She will reward companies that participate in profit sharing with their workers and crack down on companies that move jobs overseas to avoid paying U.S. taxes. She will fight for equal pay for women and paid leave. She will also fight to protect retirement security.
Trump: Some union members concerned about losing their jobs to cheaper labor abroad or illegal immigrants in the U.S. are supporting Trump. However, his running mate, Mike Pence, has been a turn-off to union members since he has opposed unions organizing and increases in the minimum wage. Trump himself has flip-flopped on minimum wage many times. A year ago he opposed raising the minimum raise. Since then, he has said that wages are both “too high” and “too low” and has changed his position numerous times in the last year. His most recent stance is that he supports raising it to $10 at the federal level, but believes states should set the minimum appropriate for their state.
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