Sheldon Silver, the Assembly Speaker who introduced the proposal, rightly noted that the increase would affect 14 percent of the workforce, or 1.2 million people. “Frankly,” he said earlier this month, “it is absurd to expect anyone – let alone a working family, to afford the cost of living today and be able to invest in their future on a salary of $7.25 an hour, or $15,000 a year.”
It goes without saying that those 14 percent of New York workers who earn minimum wage are barely scraping by. However, with 17 percent more money in their pockets, those workers will be putting that income right back into the economy, buying necessities like gas and groceries and paying their bills. They are the people least likely to pocket those savings, or invest that money out of state or out of the country.
“They have no choice but to spend that money in their local economy,” says Heidi Shierholz of the Economic Policy Institute, “That’s the stimulus you get.” Translation: Raising the minimum wage means giving extra cash to the people most likely to spend it immediately, in their own communities. It’s a win-win.
Assembly Speaker Silver knows this. So does New York City Mayor Michael Bloomberg, who also supports the measure. But being politicians, they also must have their eye on another positive affect of raising the minimum wage – rising poll numbers. “When we’ve done public polls, anywhere from 86 to 67 percent say they support an increase in the minimum wage,” said Celinda Lake of the polling firm Lake Research Partners.
New York Senate Republican spokesman Scott Reif must also be aware of the political implications. Instead of opposing the proposal outright, he didn’t take a position. But corporate-interest groups that traditionally support Republicans, like the U.S. Chamber of Commerce, have long opposed minimum wage increases and “cost of living adjustments” that tie wages to inflation.
There’s one more part of this story to keep in mind as this develops: we may not be talking about this issue at all if it weren’t for the brave men and women of the Occupy movement. As the New York Times puts it:
The Occupy Wall Street encampment at Zuccotti Park is no more, but the focus it brought to income inequality is having an impact in Albany and beyond.
They may be getting evicted from their camps across the country, but the 99 Percent still have the momentum as we go into the first policy fights of 2012.
Rick Perry is still Governor of Texas. Rick Perry is still running for President of the United States. He is still making money as the author of the bestselling book Fed Up! Our Fight to Save America From Washington, which decries the role of government in our lives.
And yet, Rick Perry is retired. According to the Texas Tribune, Governor Perry officially retired in January so he could start collecting pension benefits.
Perry makes a $150,000 annual gross salary as Texas governor. Now, thanks to his early retirement, Perry, 61, gets a monthly retirement annuity of $7,698 before taxes, or $6,588 net. That raises his gross annual salary to more than $240,000.
Not only is he getting a bump in his take-home pay now, but he can expect another one when he leaves the governor’s office. Perry is in two public pension systems: the “employee class” and the “elected class.” He only retired from the former.
While public workers see their pensions slashed across the country, small government champion Rick Perry gets to retire not once, but twice with pension benefits courtesy of Texas taxpayers.
Most people who spent their careers railing against government spending would think twice before simultaneously drawing salary and pension from the public dole.
But this is Rick Perry, a politician who has always exceled in manipulating public institutions for personal gain.
As Governor, Perry has made little effort to hide the way he rewards his wealthy campaign donors with government contracts. Matt Taibbi, the formerly Moscow-based journalist who did a feature about Perry for Rolling Stone in October, even compared Perry’s Texas to a Soviet protectorate. With a confusing track record that swings back and forth between open hostility with the federal government (suggesting that Texas secede from the United States) and what some would call government intrusion (mandating HPV vaccines), all of Perry’s actions can be explained by who was giving him money at the time, and what business they were in. Perry’s chief of staff, for instance, got a lucrative lobbying job for the pharmaceutical giant Merck right before the HPV vaccination order provided Merck a windfall of public money.
Is your stomach flipping? It should be. This is exactly the kind of cronyism, nepotism, and back-door dealing that makes the other 99 percent of us sick.
But now that Perry is so openly cashing in on Texans’ tax dollars, why not play the game with him?
Here’s how it will go, Rick. You’re bringing home an annual $240,000 worth of hard-earned taxpayer cash, so it’s time to do us a few favors:
Raise the Texas minimum wage –The so-called economic “Texas miracle” was built on extremely low-wage jobs. Let’s raise the state minimum wage above $7.25 per hour and put some real spending power in the pockets of working families who need it most.
Rebuild crumbling infrastructure – In his piece, Taibbi details how Perry granted a huge contract to a big donor for a nuclear waste depository. Now that it’s our dollars in Perry’s pockets, it’s time for him to use some lucrative bridge and road repair funds to put thousands of unemployed Texas construction workers and engineers back to work.
Get teachers back in the classroom and rescue Texas education – The Texas education system is in trouble. By 2040, 30 percent of Texas workers don’t have a high school diploma. You turn these trends around by getting laid off teachers back in the classroom now.
We the taxpayers don’t usually demand much. But with Perry taking home such a big check from us while talking trash about public employees, I think doing us a few solids is the least he could do.
This terrific piece uses one man’s story—Rick Rembold, a former manufacturing worker in Indiana—as a lens to focus in on broader context like this:
In one study, male Pennsylvania workers with high seniority experienced a 50% to 100% spike in mortality rate in the first year after job loss. The life expectancies of those laid off after age 40 decreased by one to one-and-a-half years. In the long run, these laid-off Pennsylvanians suffered a 15% to 20% reduction in earnings. Those hardest hit in terms of lifelong earnings, economists found, were not low-skilled laborers or highly skilled wealthy elites, but workers who had managed to forge a middle-class lifestyle.
Suicide rates also increase, researchers have found, when unemployment rises. (In Elkhart County, where Rembold lives, suicides exceeded the annual average by 40% last year.)
The 1980s recession in Pennsylvania was no outlier either, economic researchers have discovered, and the effects of long-term unemployment spread well beyond directly afflicted workers. In the short run, for instance, a child whose parent loses his or her job is 15% more likely to repeat a grade year in school, according to University of California-Davis economists Ann Huff Stevens and Jessamyn Schaller. This is especially true for children with less-educated parents.
And this:
Rembold gnaws on the question. “I can’t afford my home at $8 or $10 an hour,” he finally replies. Right now, he’s getting by on unemployment checks, a small inheritance from his mother that’s rapidly dwindling, and loans from family members. Still, he’d rather keep trolling the job boards in the hopes of finding something offering a living wage. “I’ve got a mortgage to pay, for Christ’s sake,” he told me. The few openings he sees with good pay, however, involve odd hours, dusk-to-dawn shifts that would mean he’d almost never see Terri, whose schedule at an aluminum company in Elkhart is early morning to mid-afternoon.
And then, under the dollar signs lurks something else: self-respect. Unlike his father, Rembold never went to college, and doesn’t consider himself too good for service-sector jobs. But he visibly agonizes over the fact that, as a 56-year-old man with decades of experience, he’s competing with people half his age for low-wage jobs. After all, as a machine operator fresh out of high school at White Farm Equipment, he earned $8.64 an hour. That was 1976. Adjusted for inflation, that’s equivalent to $42.42 today. No wonder the man’s reluctant to flip burgers or trim hedges for $9 an hour.
All those calls for people to just get a job at McDonald’s—never mind that even McDonald’s doesn’t have jobs for everyone, and that lots of unemployed people have tried to get those jobs—all those calls ignore that those jobs don’t actually pay enough to live on. And that if our society’s default position is “if you lose a job that pays $20 an hour, you should be happy to replace it with a job that pays $9 an hour,” something is very wrong. Where are we headed if that’s the case? With Senate candidates around the country suggesting that the minimum wage should be eliminated or even that it’s unconstitutional, or just that it should be lowered, what’s the next step? If these politicians succeed at lowering or abolishing the minimum, when a wave of people making $9 an hour lose their jobs, will we hear a clamor about how they should just take some of the new $4 an hour jobs?
In any case, this article wraps together one man’s story as he applies for job after job, the declining availability of good jobs at good wages, and the effects and prevalence of long-term unemployment today. Definitely worth a read.
Senator David Vitter represents a state where the average household income is $43,635, but he looks out at an audience and tells them that a plan to repeal a tax cut for households making more than $250,000 per year would affect “virtually everybody in this audience.”
55% of all adults in the workforce say that since the recession began they have been unemployed, had their pay cut or their hours reduced, or become involuntary part-time workers.
Former House Majority Leader Tom DeLay says jobless workers don’t go back to work because of unemployment benefits.
The pattern I see is working people struggling more and more, wealthy people having more and more, and Republican politicians and Wall Street allied to get more and more from working people and give more and more to wealthy ones.
And they like to say that anyone asking for a living wage, or to close a tax loophole for billionaires, is engaging in class warfare. What they really mean is, that opposes their own war on working people.
Wednesday I wrote about the increasing income disparity in the US.
Kevin Hassett of the American Enterprise Institute (a right wing think tank) and an economic advisor to both George W. Bush and John McCain wants you to know that Your Fat Paycheck Keeps Your Neighbor Unemployed:
Hassett’s views on unemployment:
So here comes the leap into ice-cold water: The biggest problem with the labor market right now is that wages are too high.
Yep, wages that have been stagnant for over a decade are the problem. Hassett’s solution?
First, the minimum wage should be scaled back to $5.85, its level when the recession began in December 2007.
and
Second, government policies should induce workers to take the plunge and accept lower wages. These policies could include carrots — tax credits that offset large wage declines, for example — and sticks, such as a reduction in the duration of unemployment insurance benefits.
Finally, unions should be willing to reopen collective bargaining agreements and accept lower wages.
Notice that he makes no suggestions about lowering CEO, or executive pay. He doesn’t mention his own willingness to take a pay cut that would undoubtedly put a couple of folks to work. No – it’s always the people on the lower end of the wage scale who have to take the hit.
Call me crazy, but – it seems to me that in an economy based on consumer spending, trying to make sure that people have less money to spend is idiotic. Housing, energy, and food costs are not going down – therefore taking money away from those folks most likely to spend discretionary income would appear to go against the very idea of economic recovery. I’m certain I know who is overpaid in this scenario – and it isn’t the folks earning minimum wage.
Living on the minimum wage is difficult, to put it mildly. According to the Economic Policy Institute’s Heidi Shierholz,
At its peak in 1968, a full-time worker earning the minimum wage made $18,890 in May 2009 dollars, enough to keep a family of three over the poverty line. With a minimum wage of $7.25, a full-time worker earning the minimum wage will make $14,962, about a $4,000 pay cut from the 1968 level and well below the poverty threshold.
The inability of today’s minimum wage to alleviate poverty is even more striking when one considers that poverty researchers regard the poverty threshold as currently calculated to be vastly outdated and an inadequate measure of the income needed to make ends meet. Poverty experts often use twice the poverty line as a more accurate threshold for material deprivation. Another measure, developed by the Economic Policy Institute, is the “basic family budget,” or the amounts a family needs to feed, shelter, and clothe itself, get to work and school, and subsist in 21st century America. It is a paycheck-to-paycheck no-frills budget that includes no savings for retirement or college, no restaurant meals, and no funds for emergencies. A typical basic family budget for a family with one parent and two children is $40,273, about three times the income of a full-time minimum-wage worker.
So imagine you’re a minimum-wage worker…and you’re not even getting the minimum wage. A new study by Ruth Milkman, Ana Luz Gonzalez, and Victor Narro of the UCLA Institute on Labor and Employment found that in Los Angeles, almost 30% of low-wage workers had been paid less than the minimum wage in the preceding week. And we’re not talking pennies here:
The minimum wage violations were not trivial in magnitude: 63.3 percent of workers were underpaid by more than $1.00 per hour.
Think about that: You’re working. You’re there when they need you, doing what needs to be done. The wage you’re supposed to be getting would still leave you under the poverty line if your job is full time. And you’re being stiffed for a dollar an hour.
That’s not all. More than a fifth of the workers surveyed had worked more than 40 hours in the week for a single employer, and should have been getting overtime. Nearly 80% of those had not been paid the legally required overtime rate. That’s if they were paid at all – 17.6% had worked outside their scheduled shifts, and 71.2% of them hadn’t gotten paid for that time.
Again, this makes a difference to people’s ability to survive:
The various forms of nonpayment and underpayment of wages take a heavy monetary toll on workers and their families. L.A. respondents who experienced a pay-based violation in the previous work week lost an average of $39.81 out of average weekly earnings of $318.00, or 12.5 percent. Assuming a full-year work schedule, these workers lost an average of $2,070.00 annually due to workplace violations, out of total annual earnings of $16,536.00.
Think about what you can do with $2000. Now think what $2000 means if it’s 12% of your income. Or think how you’d feel if your boss was screwing you out of 12% of the income you were legally entitled to. I don’t know about you, but I’d be pissed.
Partial good news here is that we have a Secretary of Labor who actually cares about this, and wants to stop it.
Soon after she became the nation’s labor secretary, Hilda Solis warned corporate America there was “a new sheriff in town.” Less than a year into her tenure, that figurative badge of authority is unmistakable.
Her aggressive moves to boost enforcement and crack down on businesses that violate workplace safety rules have sent employers scrambling to make sure they are following the rules.
–snip–
Garnering less attention, she just finished hiring 250 new investigators to protect workers from being cheated out of wage and overtime pay. She also started a new program that scrutinizes business records to make sure worker injury and illness reports are accurate. And she is proposing new standards to protect workers from industrial dust explosions — an effort the Bush administration had long resisted.
But given the scale of the violations the UCLA study found in LA alone, even 250 investigators is probably only a drop in the bucket of what’s needed.
On Monday, Washington Post editorial page staffer Charles Lane had a fantastic idea for solving the jobs crisis. Fantastic, that is, if you hate working people and the very concept of fairness. His idea, you see, was lowering wages for construction workers and low-wage workers. How? By repealing the Davis-Bacon Act, which requires employers receiving federal funding to pay the prevailing wage in the area. And by reducing the minimum wage.
What Lane is actually proposing is that we create hundreds of thousands of terrible new low-paying jobs to artificially lower the unemployment rate. While these jobs will technically exist (should they come to fruition; a drop of $2.10 per hour per worker isn’t exactly freeing up massive pools of money for new cashiers and ride operators at amusement parks), it’s hard to say that there’s a benefit to our economy in creating the least rewarding type of employment for a group of workers almost all of whom had better jobs paying more beforehand.
Technically, we could “solve” unemployment tomorrow by allowing every employer in the country to pay $2.50 an hour (ever wonder why even in the most economically depressed times, shitty restaurants are still hiring waitstaff?) – employers could easily create incredibly low-cost positions, we’d have jobs for everyone and, best of all, our entire economy could collapse under the weight of a newly employed populace that doesn’t earn enough to pay rent. Or get bank accounts. Or eat, really.
Davis-Bacon simply requires the federal government to pay the same for its construction projects as the bulk of private builders in a metropolitan area. In so doing, Davis-Bacon allows construction workers to remain a bulwark of the shrinking American middle class. Without Davis-Bacon, construction wages would fall dramatically, which might warm Charles Lane’s heart, but which would put a damper on the overall economy by seriously depressing consumer spending. And at a time where even low interest rates and Federal assistance to banks aren’t spurring construction lending, I wouldn’t count on a drop in construction wages doing a damn this to create jobs. Lane’s prescription would serve to do little but line the pockets of mammoth general contractors like KBR. (As this piece is already running long, I won’t even get into the myriad positive effects of Davis-Bacon on the economy, but they’re substantial.)
The proposed repeal of Davis-Bacon is a niche corporatist hobby horse, like the repeal of the estate tax or the incessant call to cut capital gains taxes. And like the constant braying for tax cuts for the rich, the push to screw construction workers will forever be tailored to the tone of the moment. The economy’s booming? Cut capital gains taxes and repeal Davis-Bacon! The economy’s in the toilet? Cut capital gains taxes and repeal Davis-Bacon! No matter what the situation, the prescription from Lane and his plutocrat buddies in the same: make the rich richer and turn the middle class into the working poor. It never ceases to amaze me that comfortable, soft-handed pundits feel so threatened by tradespeople earning decent middle-class wages, but they do. It’s pathological.
So now that we’ve got that out of the way, let’s see what else Lane suggests to create jobs:
Reduce the federal minimum wage.
Did I say that repealing Davis-Bacon “is a niche corporatist hobby horse, like the repeal of the estate tax or the incessant call to cut capital gains taxes?” I meant, “repealing Davis-Bacon is a niche corporatist hobby horse, like the repeal of the estate tax or the incessant call to cut capital gains taxes or the non-stop attacks on the minimum wage.”
Truly, this is a jobs solution only someone without a decent moral sense could embrace.
