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Notwithstanding the latest oblivious comments of Crown Prince Jeb, the drumbeat demanding a significant increase in the national minimum wage continues to grow louder and louder — both at the grassroots level and in the world of data and research.

Confirmation of the latter can be found in two news studies highlighted last week by the wonks at the Economic Policy Institute.

In study #1, researchers at the federal Bureau of Labor Statistics found that pay for average American workers is and has been stagnant. As EPI President Lawrence Mishel explained in a post last week:

“Their analysis confirms that there has been very broad-based stagnant pay whether one examines just wages or a more comprehensive compensation measure that also incorporates changes in health, pension, and other benefits. The bottom 80 percent of workers had stagnant or declining hourly compensation while the bottom 88 percent of workers had stagnant or declining wages.”

Study #2 comes from EPI’s David Cooper. Here are the key findings:

  • A $12 minimum wage in 2020 would undo the erosion in value of the minimum wage that took place largely in the 1980s. It would also reverse the growth in wage inequality between low-and middle-wage workers over the past generation.
  • Raising the minimum wage to $12 by 2020 would directly or indirectly lift wages for 35.1 million workers—more than one in four U.S. workers. Read More
Commentary

As Think Progress reports this morning, there’s good news today for average American workers in the new proposed rule from the Obama administration:

“On Tuesday morning, the Department of Labor released its proposed changes to the rules regarding who is eligible for overtime pay to expand the coverage to more workers.

The proposal would increase the salary threshold to $50,440 by 2016, meaning anyone who makes that much or less would have to be paid time-and-a-half for putting in more than 40 hours a week. It would also increase the total annual compensation a worker would need to make to be exempted as a highly compensated employee, raising it to $122,148 a year for full-time salaried workers. And it would automatically update both requirements to make sure only actual executives and administrative and professional workers get exempted.

On a call with the media, Labor Secretary Thomas Perez estimated that for the subset of workers who work more than 40 hours a week and will become newly eligible for overtime pay, they will collectively see $1.2 billion to $1.3 billion in extra compensation as a result of the change.”

This is precisely the kind of rule change we’ll need lots more of (e.g. a big boost in the minimum wage) if the nation is going to address its destructive and mushrooming gap between the haves and the have nots. Let’s hope the administration keeps ’em coming.

Commentary

A new report from the Economic Policy Institute compares the economic outcomes of three groups of Mexican immigrants working in the U.S.: legal permanent residents (LPRs), unauthorized workers, and H-2A and H-2B temporary visa workers. There are two federal visas that allow employers to import unskilled, foreign workers on a temporary basis: the H-2A visa for agricultural workers and the H-2B visa for other unskilled labor, such as seafood processing, landscaping and housekeeping. The report, “Authorized Workers, Limited Returns: The Labor Market Outcomes of Temporary Mexican Workers,” finds that although H-2A and H-2B workers are lawfully present, their legal status does not give them an advantage over unauthorized workers. Both groups are paid very low wages and are vulnerable to exploitation and abuse on the job. The author concludes:

“The results of these analyses point toward the need for reforming U.S. temporary foreign worker programs. If temporary foreign worker programs are to be a viable alternative to unauthorized immigration, temporary work visas must appeal to potential unauthorized immigrants and must reduce the risk of abuse that workers in these programs encounter. Currently, visa restrictions tying temporary foreign workers to a single employer undermine the economic opportunities available to these workers.”

Changing the H-2 visas so that employees could freely move from one employer to another would greatly increase their bargaining power and ultimately improve wages and working conditions, but unfortunately that doesn’t seem likely to happen. A new comprehensive rule for the H-2B program published by the Department of Labor (DOL) and Department of Homeland Security (DHS) adds critical worker protections, but there is no mention of visa portability. Nor is there any indication from DOL that it intends to modify the H-2A visa any time soon.

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Commentary

Many North Carolina workers are locked in low-wage jobs that don’t pay enough to make ends meet, even though they’re working full-time. Over the long-term, state lawmakers need to implement a comprehensive strategy that creates pathways out of this low-wage economy. But right now, they can provide an immediate boost to working families by increasing the minimum wage from the current level of $7.25 an hour. Raising the wage floor would put more money in the pockets of workers, increase sales for local businesses, and strengthen the state’s overall economic performance, without increasing unemployment, according to a new fact sheet released by the Justice Center yesterday.

Most importantly, raising the minimum wage benefits adult workers and their families, providing a critical antidote to the ongoing boom in low-wage jobs. Almost 6 out of every 10 new jobs created since the end of the recession are in industries that pay poverty-level wages. More than 80 percent of new jobs created since 2009 don’t pay enough to cover life’s necessities, including housing, healthcare, groceries, and gas costs. Raising the minimum wage would make the difference between destitution and self-sufficiency for thousands of workers on the bottom rung of the state’s labor market.

One critical effect of raising the minimum wage for these low-income workers is the boost to the entire economy that comes from putting more money in the pockets of large numbers of those workers most likely to spend it. For example, boosting the wage floor to $10 an hour would affect approximately 1 million workers in North Carolina. And because of the boom in low-wage work, the vast majority of those North Carolinians benefitting from the wage increase are no longer the part-time, teen-aged workers who once filled the bulk of entry-level jobs in past generations. Now, more than 85 percent of those benefitting from a minimum wage increase are workers older than 20 years of age, and more than half work full-time. A half-million children in the state would experience increased security thanks to their parents’ higher wages—a critical support given that North Carolina has the eighth highest percentage of children living in poverty in the nation.

As low-income workers spend their bigger paychecks, local businesses will benefit, growing the economy without hurting overall employment. Economists have repeatedly found that those states that increased their minimum wages have seen better economic performance, lower unemployment, and higher job creation rates than those states that didn’t raise their wages, controlling for regional economic trends. The evidence clearly and repeatedly contradicts critics who claim that increasing the minimum wage forces employers to offset greater payroll costs by reducing the number of employees.

In fact, raising the minimum wage creates more customers, more sales, and bigger profits. For example, recent studies have indicated that raising the minimum wage to $10 an hour would increase paychecks for North Carolina’s workers by $2 billion a year. That’s $2 billion in increased consumer spending at local businesses, boosting business sales, business profits, and creating more than 5,000 new jobs.

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Commentary

PW 47-2 quality jobs

Six years after the end of the Great Recession, jobs are finally becoming more plentiful in North Carolina, but the overwhelming majority of those jobs don’t pay enough to make ends meet, provide necessary benefits to help families get by, or create sustainable pathways into middle-class prosperity. In short, North Carolina is not creating enough quality jobs—employment opportunities that pay workers enough maintain basic spending on necessities like food and doctor visits, ensure retirement security, and provide paid time off when they or family members are sick. And without enough quality jobs, the middle class will shrink, consumer spending will drop, local business sales will suffer, and the overall economy will contract.

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