Issues A to Z: Jobs, Labor, & Minimum Wage (2020 Presidential Election)

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.

Jobs

Most presidents create jobs regardless of party affiliation. As mentioned before in my post on the economy, in the 38 months following the 2016 election, the US economy has added 7.3 million jobs. In the 38 months before the 2016 election, the US added 8.4 million jobs. Employers added an average of 176,000 jobs a month in 2019 compared to 223,000 jobs a month in 2018.

Looking at the last 12 presidents, including President Trump, Bill Clinton was the leader in job creation averaging 242,000 jobs per month. The top four presidents in terms of job creation are Clinton, Regan, Carter, and Obama. As of February 2020, there had been a record-breaking 113 straight months of job growth which began in September of 2010. Then March came and payrolls fell by 701,000 ending the streak.

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.

Over 16 million workers in the U.S. are union workers or work a job that provides union representation and over 6 in 10 of those people are women and/or people of color. Union workers earn roughly 13% more than non-union workers on a similar job site and experience lower rates of labor violations like health and safety requirements.

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.

In the 1950s, 35% of the American workforce were union members. Now, that’s down to just 10.5%. This coincides with the rise in income inequality that I outlined in my post on the economy. In the 1950’s, CEO’s made 20 times more than the median wage of their employees. Last year, that rate ballooned to 287 times. It could be argued that the middle class has been cut out of decades of economic growth. Median household income has been basically the same for the past 20 years. Meanwhile, the top 1% have had their incomes nearly triple in recent decades. When politicians talk about income inequality, that is what they are talking about. Much of this has to do with a tax code that benefits the wealthy leading to billionaires like Warren Buffet paying a lower tax rate than his secretary.

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. 21 states began 2020 with a minimum wage higher than the federal level. Seven states and Washington, D.C. have a $15 minimum wage which accounts for a little more than 30% of the nation’s workforce.

So, how many people actually earn the minimum wage? According to the Bureau of Labor Statistics, in 2018, 1.7 million workers, or 2% of all hourly workers earned wages at or below the federal minimum wage of $7.25 per hour. 82 million total workers were paid hourly wages accounting for 59% of all wage and salary workers in the U.S.

Typically, who are minimum wage workers? About half of them are under the age of 25. 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. Click on their name to be taken to their full policy page on their website.

Joe Biden:

Biden’s Record:

Senator Biden was one of the original co-sponsors of the Employee Free Choice Act which would have made it easier for workers to unionize.
Vice President Biden worked with New York to raise their minimum wage to $15 per hour.
Vice President Biden stood against bills in states like Wisconsin and Ohio that reduced collective bargaining rights.
Vice President Biden held an oversight role in the American Recovery and Reinvestment Act which was the 2009 stimulus package developed in response to the Great Recession.
Vice President Biden expanded the SAFER Act which prevented a surge of firefighter layoffs during the great recession after being lobbied by the firefighter’s union general president.
The Obama-Biden administration increased transparency of anti-union campaigns and required employers who wanted federal contracts to comply with labor laws via executive order.

Biden’s Policy Proposals:

As president, Biden will

restore protections for federal workers rescinded by the Trump administration around collective bargaining and union representation.
hold corporations and executives accountable for interfering with labor laws and organizing efforts.
pursue employers who violate labor laws, participate in wage theft, or cheat on their taxes by intentionally misclassifying employees as independent contractors.
make it easier for workers who choose to unionize to do so.
provide federal guarantee that public sector workers (educators, social workers, firefighters, police officers) can collectively bargain.
ensure that workers can exercise their right to strike without fear of reprisal.
expand rights to farmworkers and domestic workers.
extend the right to organize and bargain collectively to independent contractors.
increase the federal minimum wage to $15/hour.
stop employers from denying overtime pay.
incentivize states to reduce unnecessary licensing requirements and ensure licenses are transferred from state to state.
increase workplace safety and health.
end mandatory arbitration clauses imposed on employers by workers that waive worker rights to sue their employers.
sign the Protecting the Right to Organize (PRO) Act into law.