Today, people are more skilled, more productive, and higher educated than in the past, yet many are worse off than their less-educated counterparts thirty years ago (read more from CEPR here and here). Gordon Lafer, associate professor at the University of Oregon’s Labor Education and Research Center, examines the causes of this imbalance in his new paper for the Economic Policy Institute entitled The Legislative Attack on American Wages and Labor Standards. He illustrates how corporations have orchestrated state attacks on the minimum wage, employee benefits, and labor standards.
Several states, for example, have adopted minimum wage exemption laws or have abolished the minimum wage completely. In 2011–2012, four states (Indiana, Mississippi, New Hampshire, and South Dakota) passed laws restricting the minimum wage, four states (Idaho, Maine, Michigan, and Wisconsin) removed protections against child labor, and sixteen states (including Indiana, North Carolina, and Wisconsin) restricted unemployment benefits. In one of the more egregious cases mentioned in the paper, Mississippi passed a law that prevents any locality from establishing a minimum wage or sick leave rights for workers.
The minimum wage is already far below where it should be. If the minimum wage reflected increasing productivity since its peak value in 1968, it would be two-and-a-half times greater than its current level. CEPR found that an individual worker earning the minimum wage today must work 40 hours a week for 52 weeks a year just to pay for family health insurance, with only a single hour’s wage left over for all other necessities. The minimum wage is no longer a living wage.
In forty-three states, tipped waiters and waitresses make even less than the federal minimum wage, often as low as $2.13 an hour. Consequently, the poverty rate for this group is 250 percent higher than the rest of the workforce.
The paper also reveals the huge problem of wage theft, when workers are not paid some or all of their earned wages. According to one estimate, about 64 percent of low-wage workers have some of their paycheck stolen every week. Each year, the value of stolen wages totals more than twice the amount of money stolen from bank, gas station, and convenience store robberies combined. Yet, Lafer notes, employers have a 0.001% chance of being audited for stealing from their employees. Stricter enforcement of wage theft would have a tremendous impact on low-wage workers and their earnings.
According to the report, nearly 40 percent of private-sector employees lack any employer-provided paid sick days. Corporations not only fight against the implementation of paid sick days laws but they have backed preemptive laws in several states, including Louisiana and Wisconsin, that prevent cities and counties from establishing such rights. Paid sick days hold a bipartisan majority of the public’s support; however, many states prevent the issues from reaching the voters.
Read more in Lafer’s paper on The Legislative Attack on American Wages and Labor Standards.