New York City labor advocates just achieved a huge milestone for workers’ rights. The Port Authority of New York and New Jersey recently approved a plan to increase the minimum wage for airport workers to $19 per hour, the highest in the nation. The wage hike would affect some 40,000 baggage handlers, security guards, catering staff and other workers at the three major airports in the region.
The announcement comes after years of research, protest and advocacy from unionized workers. Proponents of the increase faced severe pushback from airline companies, which argued that higher wages would mean higher prices for customers.
However, labor advocates noted that high turnover rates fueled by insufficient wages were making the travel experience less safe and efficient for passengers. New York City’s airport worker turnover rates are exceptionally high — more than 30 percent annually, and even as high as 160 percent at one company, according to a report issued by the Port Authority.
New York City’s airports are vulnerable on multiple levels. Together they serve more than 100 million travelers annually, and they have faced overwhelming crowds and inclement weather in recent years, not to mention several thwarted attacks.
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“The new policy will benefit the traveling public by reducing staff turnover and providing an experienced, well-trained, motivated workforce that can better assist in responding to an emergency, identifying security issues, operating equipment safely, and providing experienced customer service,” reads a statement from the New Jersey governor’s office.
The Port Authority modeled its plan after other airports around the country saw success improving operations and safety by increasing their minimum wages. “Lifting airport workers’ wages is now a tried and tested tool for responding to a recurring set of problems at airports around the United States,” the agency noted in its report.
Airport workers in New York currently earn at least $13 per hour under state law, and workers in New Jersey earn a minimum of $10.45. Beginning on Nov. 1, New York workers will receive $13.60 an hour and New Jersey workers will earn $12.45. The wages will increase annually until they hit a minimum of $19 an hour in 2023.
Raising the minimum wage is a hot-button issue. While proponents argue that an increase will lift people out of poverty and reduce turnover rates, thus saving millions in training costs, critics say that wage hikes will ultimately lead to massive job loss.
Nonetheless, the airport workers’ wage bump has been hailed as a triumph for the American worker. “Their struggle will send a message around the country that when workers stand together and fight for justice, they can win,” said Senator Bernie Sanders.
Tag: minimum wage
Raising the Minimum Wage to $15
Seattle and San Francisco began raising their hourly minimum wage to $15 in 2015. Now Washington, D.C., and New York City are following their lead, and Democratic leaders in Congress have endorsed a bill to raise the federal minimum wage to $15 by 2024.
But even as the fight for $15 gains new support in major cities around the country, many state-level congressional leaders are pushing back. In Minnesota, for example, lawmakers are trying to pass a measure that would prevent Minneapolis from paying its workers $15 an hour. A similar challenge is underway in Missouri, even while 10 other states reportedly have bills under consideration (and under challenge) to raise state hourly rates to $12 or $15.
Why the concern? While cities that pay workers more say that it’s sustainable, some economists predict people will lose their jobs en mass.
WHAT THE RESEARCH SAYS
Multiple private and public studies show that an hourly boost of a couple bucks gives workers thousands of dollars more each year. In some cases, the bigger paycheck has taken them out of poverty. But in others, it can leave them without a job.
“We have not seen evidence of any substantial negative effect to date,” says Dean Baker, co-director at the nonpartisan Center for Economic and Policy Research. “These increases have had large payoffs for low wage workers.”
A 2014 Congressional Budget Office study found that boosting the minimum wage to $10.10 nationwide would add $31 billion to the pockets of low-income American workers. (Money that would likely be spent on necessities like food, diapers, gasoline and clothing, not socked away for a rainy day.) But it also acknowledged that doing so would cause half a million jobs to disappear.
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Fiscal conservatives claim that the number of people who become unemployed could be even greater. A 2015 study conducted by the American Action Forum, a right-leaning policy research group, found that raising the hourly minimum wage to $15 would cause unemployment to skyrocket, with 6.6 million jobs lost nationwide. Plus, only 6.7 percent in added wages would reach the people that need it — those living below the poverty line.
A CASE STUDY
Currently, Seattle is the only city paying a $15 minimum wage for workers in large companies. Other cities are still phasing in their increases, so there’s little actual data on the long-term impact of raising wages this significantly.
“This is getting into untested areas for minimum wage increases,” Baker says. “We just don’t have much basis for knowing at this point.”
But the trends in cities that have boosted their minimum wage levels above the federally-mandated $7.25 an hour: a decrease in the number of new businesses setting up shop, workers’ hours being cut and an improvement in the standard of living for large segments of the workforce.
“If you’re working less hours and still making more money, it’s a win-win,” argues Ken Rogers, chair of the Center for Labor Research and Education at the University of California, Berkeley.
OTHER TRADEOFFS
In cities that have already increased their minimum wage, it’s noticeable that people aren’t hopping from job to job in an effort to earn a higher paycheck. For instance, the Center for Labor Research and Education found that when San Francisco’s airport raised employee wages in 2001, fewer workers quit their jobs, saving $6.6 million annually in recruiting and training costs. And a Harvard Business Review study revealed that when comparing wages between employees at two warehouse clubs, the company that paid higher salaries had a significantly lower turnover rate: 17 percent versus 44 percent.
Big picture, if more people earn a living wage, the number relying on Medicaid and food stamps could decline. According to a report by the left-of-center Economic Policy Institute, for every dollar the minimum wage goes up, government spending drops $5.2 billion.
That being said, more than 9.2 million minimum wage workers were employed by all levels of government in 2015, according to the U.S. Bureau of Labor Statistics. So any money saved by Uncle Sam in welfare assistance would possibly be canceled out by higher paychecks to these folks.
MORE HELPFUL READING ABOUT THE MINIMUM WAGE:
As Cities Raise Wages, States Push Back, The New York Times
Poll: Bipartisan Majority Supports Raising Minimum Wage, The Hill
Democrats’ $15 Minimum Wage Push Faces Tough Political Reality, Delaware Online
Eyeing the Trump Voter, ‘Fight for $15’ Widens Its Focus, The New York Times
Homepage photo by David McNew/Getty Images
This College Graduate Is on A Cross-Country Mission to Work Hourly Jobs
As more millennials leave college and enter into the workforce, they’re soon realizing that the office job at a computer may not be what they expected. That’s what 23-year-old Heath Padgett found when he graduated from Concordia University in Texas and began working for a software company.
Like many young people, Padgett wanted to find something more meaningful, which led him and his fiancee, Alyssa (who is now his wife), to come up with the idea of traveling across the country while working hourly jobs in each state. The goal, they hope, is to illuminate the nation’s 75.9 million hourly hardworking employees who go unnoticed.
With the help of Snagajob, an online network for hourly employment, Padgett and his wife kicked off Hourly America (and their honeymoon) on June 1, leaving their hometown of Austin, Texas, just one week after their wedding. The two have notched 38 states so far, traveling across the country in a 20-year-old refurbished motorhome.
“Through this journey, I want to be able to create a stronger connection between hourly workers and their customers and help break certain stigmas that exist about the hourly employment industry,” Padgett says.
The couple are currently in Kentucky, working as janitors in a KOA campsite, according to Business Insider. Padgett said he works two or three various jobs each week, showing up to learn about the position and interviewing his coworkers about their work. The pair have experienced everything from lifeguards and paint mixers to line cooks and electricians.
“A lot of businesses have said yes before even taking a look at our website or media coverage,” Padgett tells Business Insider. “Some places think we are just crazy kids who are trying to do something meaningful with their lives, and they would be right.”
Padgett is planning to release a film on his experience in August 2015, but in the meantime, he contends there’s no one way to go about starting a career.
“Don’t let people tell you there is a set way to go about your career. I’ve found that the safe and normal way rarely yields the results of stepping outside of the box,” he says. “I had so many people tell me I was crazy for pursuing this 50-state-50-job quest, however, I’ve had more opportunities open up because of it then I would have ever had if I’d stayed in my office job back in Texas.”
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Paying It Forward: Why This University President Gave Up a Quarter of His Salary
As the debate over the national minimum wage rages on, one man has decided to take action on his own.
Raymond Burse, the interim president of Kentucky State University, has decided to take a $90,000 pay cut to boost the wages of the campus’s lowest-paid workers, reports the Lexington Herald-Leader.
Burse, who was set to make $349,869, will now make $259,744 annually after the cut was approved by the school’s board of regents. According to WLKY, he said that the pay cut was “necessary since some of the employees were making as little as $7.25 an hour.”
A total of 24 employees will now earn $10.25 an hour. Their new rate will remain even after a new president takes Burse’s place.
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“This is not a publicity stunt,” Burse told the Herald-Leader. “You don’t give up $90,000 for publicity. I did this for the people. This is something I’ve been thinking about from the very beginning.”
Burse first served as Kentucky State’s president from 1982 to 1989, then became a senior executive at General Electric for 17 years before retiring in 2012 with good benefits, reports say.
Even though Burse has brushed off his generosity, other public university officials might want to take note since many of them earn abundant salaries, such as Ohio State University’s E. Gordon Gee, the top-paid public college president in the country, who makes $1.8 million annually. (Vox notes that there are a few other college presidents who, like Burse, have decided to raise the minimum worker wage on their campuses.) And according to report from TIME, from 2009 to 2012 salaries have skyrocketed: “Executive compensation at public research universities increased 14 percent to an average of $544,554, while compensation for presidents at the highest-paying universities increased by a third, to $974,006.”
Burse said, however, that his gesture wasn’t meant to urge other presidents and execs to take similar action, telling the Herald-Leader that he was merely in a position where he could spread his wealth.
“My whole thing is I don’t need to work,” he said. “This is not a hobby, but in terms of the people who do the hard work and heavy lifting, they are at the lower pay scale.”
So while Burse might not be encouraging his peers to follow his lead, we certainly hope others do.
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4 Takeaways from the Summit on Working Families
During the Summit on Working Families on Monday, First Lady Michelle Obama recalled once bringing her youngest daughter to a job interview.
“Who I was at that time was a breastfeeding mother of a four-month-old, I didn’t have a babysitter, so I took Sasha to the interview with me,” she said. “And I thought, ‘Look, this is — this is who I am; I got a husband who’s away; I got two little babies, they are my priority. If you want me to do the job, you gotta pay me to do the job, and you’ve gotta give me flexibility.”
Echoing the struggle many Americans face in striking a balance between work and home life, the First Lady joined her husband President Barack Obama, the White House, the Department of Labor, and the Center for American Progress in hosting a day-long discussion directed at creating better workplace policies for parents.
Business leaders (including CEOs from Johnson & Johnson and Goldman Sachs), lawmakers, working families, and White House officials participated in the all-day summit, as well as Vice President Joe Biden and Dr. Jill Biden.
At Monday afternoon’s remarks, Obama announced a presidential memorandum requiring federal agencies to provide employees more flexibility to take time off to take care of ill family members, to nurse, or to be able to work from home without suffering repercussions. Though the president did not offer up a plan requiring paid leave, he outlined four major themes that could help create a better life for American workers.
Flexible workplaces
The White House argues that more flexible schedules lead to happier employees, boosts productivity, and reduces turnaround rates, as Bloomberg Businessweek points out. As a part of the president’s executive order, federal agencies are required to review their policies on flexibilities as a part of the Office of Personnel Management’s plan to create a Workplace Flexibility Index, which will be updated annually to measure success, according to a White House fact sheet.
Obama also urged lawmakers to pass the Pregnant Workers Fairness Act, which would require employers to accommodate pregnant women with flexibility that would allow them to keep their jobs.
Mad Men actress Christina Hendricks also spoke, illustrating the point that U.S. workplace policies were outdated. Using her character on the AMC series, a single mom and professional, Hendricks said, “In the 21st century the only place for a story like Joan’s should be on TV.”
Paid family leave
Obama also pointed out that the U.S. is the only developed country without mandated paid maternity leave. Women now comprise half the American workforce while men are increasingly playing the role of caregivers more than ever before.
“Many women can’t even get a paid day off to give birth,” Obama said. “That’s a pretty low bar.”
Obama also urged Congress to pass the FAMILY Act, which would annually provide up to 12 weeks of paid leave to qualifying workers for personal illness, to take care of a sick family member, or for the birth or adoption of a child. While current federal policy allows up to three months of unpaid leave for newborns or sick family members for some employees, the law only covers about 60 percent of the American labor force—leaving almost half of all workers without the ability take leave sans a paycheck, the president argues.
Child Care
Child care was also mentioned at the summit. As a part of his initiative for better work policies, Obama will ask Labor Secretary Thomas Perez to set aside $25 million towards childcare for employees who want to attend job-training programs. Today, more than 60 percent of families with children live in a dual-income household, compared to only 40 percent of households with two working parents in 1965, according to U.S Council of Economic Advisors report.
“One study shows that nearly half of all parents, women and men, report that they’ve said no to a job, not because they didn’t want it, but because it would be too hard on their families,” Obama said. “When that many talented, hard-working people are forced to choose between work and family, something’s wrong. Other countries are making it easier for people to have both. We should too, if we want American businesses to compete and win in the global economy.”
Equal pay and raising the minimum wage
The president also emphasized pay equality and increasing the minimum wage as part of setting a 21st century workplace agenda. While females are more likely to work in low-wage and minimum-wage jobs than men, more than 40 percent of mothers are their family’s primary breadwinner yet they earn just 77 cents to every dollar, on average, compared to their male counterparts, according to White House economic advisers.
The President argued that by limiting the female labor force the U.S. is hindering its global edge. The U.S. ranks 17th in female labor participation among the world’s richest countries, according to the National Bureau of Economic Research. Back in 1990, the U.S. placed sixth.
These four narratives underscored a greater message from the White House: supporting families through better workplace policies is not just a women’s issue.
“At a time when women are nearly half of our workforce,” Obama said, “anything that makes life harder for women, makes life harder for families, and makes life harder for children. There’s no such thing as a women’s issue; this is a family issue. This is an American issue.”
A Historic Minimum Pay Hike on the Horizon for One American City
Want to reduce poverty? Increase the minimum wage. It’s that simple, say a handful of reports, and Seattle is on the verge of a city-wide raise.
On May 1, the mayor of the Pacific Northwest bastion announced an ambitious move to up the base wage there to $15 an hour — the highest of any major city worldwide, reports Quartz.
While workers cheer, a common business-owners’ lament is that increasing their costs will cut hiring and spur layoffs. But early data on a handful of areas that have boosted their pay scales suggests that businesses aren’t going under because of wage requirement bumps.
The bipartisan Congressional Budget Office (CBO) estimated that nudging the federal minimum wage from $7.25 to $10.10 would put $31 billion in the pockets of American workers, 19 percent of that going to families currently living below the poverty line.
At the same time, however, the CBO estimates that some 500,000 would lose their jobs. But San Francisco saw none of the bust and all of the boom when it raised wage minimums to $10.74.
“Our data show that an increase up to $13 an hour has no measurable effect on employment,” Michael Reich, a University of California, Berkeley economics professor, told the Seattle Times. The same for Santa Fe: The minimum wage — upped from $5.15 to $8.50 in 2004 — “seemed to have helped workers and not hurt business too much,” researcher Nicholas Potter told the newspaper.
Seattle Mayor Ed Murray‘s plan rolls out the increases over the next decade, and it still has to pass the city council. So while the local burger slingers can’t celebrate yet, they might be able to soon.
What Can We Learn From Sweden About Long-Term Unemployment?
From New York to Oregon, politicians and voters have been engaging in discussions about raising the minimum wage as a way to fight the growing inequality in the United States. But policy makers in Sweden have a new idea that they say could be much more effective in putting a dent in income inequality.
The European country went through a financial crisis that left the country with high rates of long-term unemployment — a problem that continues to plague the U.S., too. In the early 2000s, according to CNN Money, the U.S. had a pretty low rate of long-term unemployment. But since the financial crisis, more than 35 percent of unemployed Americans have been unemployed for six months or more. Long-term unemployment is a vicious cycle: Employers are less likely to hire someone who has been out of work for more than six months, making it’s harder and harder for someone who is unemployed to get a job.
To combat long-term unemployment, Sweden tried six social programs and found one that really works. It’s called a wage subsidy program, and it’s pretty straightforward: The government pays part of a worker’s wages, giving companies an incentive to hire workers that were previously unemployed.
In Sweden, the government paid half of a worker’s wages for the first six months of a job. This meant that companies who were hiring unemployed people didn’t have to take on a huge risk — they could get a six month trial period for half the cost.
This idea has actually been batted around in the United States before, as an alternative both to raising the minimum wage and to reforming the earned income tax credit. Politically, however, wage subsidy programs have some obstacles to overcome. Democrats are committed to raising the minimum wage, and this type of program might appear to be a sort of welfare program for the unemployed.
But Sweden is the home of a number of excellent ideas, including IKEA, Absolut Vodka, and Pippi Longstocking. With that kind of track record, maybe the U.S. should give wage subsidy programs a try.
The Cost of Walmart Paying Its Employees a Living Wage
Take a guess how much the price of a 68-cent box of mac-and-cheese would increase if Walmart paid its employees a living wage. Twenty-five cents? A dollar?
Try a single penny.
In this fascinating video from Slate and Marketplace, you can see that if Walmart passed the cost of increasing their workers’ salaries along to consumers, prices would only increase by 1.4 percent.
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It’s no secret that Walmart pays wages so low to their employees that many rely on (yep, taxpayer-funded) food stamps. Many of these workers return to their place of employment, spending their food stamps on Walmart’s low-priced goods — funneling even more money to the big-box retailer in a vicious cycle. As the videos points out, the United States distributed $76 billion in food stamps last year, and Walmart took in 18 percent of food stamp dollars, or about $13 billion.
Of course, why make the consumer pay extra for Walmart to increase its payroll costs when the retail giant could easily absorb this expense? Slate and Marketplace crunched the numbers and found that by simply raising the average cashier’s wage from $8.81 to $13.63 (a point where they would be ineligible for food stamps), would only cost Walmart $4.6 billion — an amount that the company could simply absorb from the $17 billion they made last year.
Kind of puts the Walmart slogan “Save Money, Live Better” into perspective, doesn’t it?
A Northwestern State Proves That a Higher Minimum Wage Doesn’t Necessarily Increase Unemployment
Talk about forward thinking. For 16 years now, the state of Washington has boasted the highest minimum wage in the U.S. — currently $9.32 per hour, a full two dollars and change more than the federal mandate of $7.25.
When west coast voters passed the initiative in back in 1998, opponents claimed that a higher wage would kill jobs. Coincidentally, this is the same argument that is being used by politicians, business groups and lobbyists who are fighting against President Barack Obama’s push for a $10.10 minimum wage. As the debate continues, Bloomberg analyzed the numbers in Washington state, and the results are surprising.
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After Washington’s minimum wage increase passed, which increased wages over two years to $6.70 and linked future increases to inflation as measured by the Consumer Price Index, unemployment in the state spiked for a three-year period. However, in the years that followed, unemployment gradually decreased. For four of the past five years, Washington’s unemployment rate has been below the national average — as well as below the averages for the Western and Southern regions. Overall, Bloomberg reports that Washington’s job growth has continued at an average of 0.8 percent annually, outpacing the national growth rate of 0.3 percent.
An added bonus? Poverty in the state trailed the U.S. average for at least seven years as well. And payrolls at Washington’s restaurants and bars — employees of which are particularly vulnerable to minimum wage laws — have expanded by a whopping 21 percent. In other words, after 15 years of implementation, Washington’s minimum wage increase is successful. “It’s hard to see that the state of Washington has paid a heavy penalty for having a higher minimum wage than the rest of the country,” Gary Burtless, an economist at Brookings Institution and former U.S. Labor Department worker, told Bloomberg.
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How do the results seen in Washington line up with those projected nationally? A report by the Congressional Budget Office published in February found that President Obama’s proposal of raising the minimum wage to $10.10 would reduce employment by 500,000 workers — a talking point that has been levied by opponents of the wage increase. However, the same report found that a higher minimum wage would lift 900,000 people out of poverty.
So while it’s true that raising the minimum wage would create higher costs for employers — which could lead to job cuts — the increase in pay will likely be pumped back into the economy by citizens who are spending more money than they would be able to if they were being paid at a lower rate.
That might not be enough to convince Congress, but just take a look at this sobering map created by the National Low Income Housing Coalition, which shows the hours per week that minimum-wage employees would need to work in order to afford a two-bedroom apartment. In Washington, these employees would need to clock 81 hours a week — and that’s despite the fact that they are paid the the highest minimum wage in the country. For the 19 states that adhere to the federally-mandated $7.25 an hour … well, let’s just say it doesn’t look like these employees will be affording the apartment of their dreams (or even any apartment) anytime soon.
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These Billionaire GOP Donors Support the Idea of a $12 Minimum Wage. Will the Party Follow?
Could common political ground between Democrats and Republicans be on the horizon? It looks like some influential conservative donors are shifting their ideology ever so slightly to increasing the minimum wage — a legislative issue that Democrats are pushing for as we near the midterm elections. In January, wealthy Silicon Valley executive and conservative donor Ron Unz put forth a California ballot measure that would raise the minimum wage to $10 an hour in 2015 and $12 in 2016. His perspective was this: raising the minimum wage would put more money in the average Americans’ pockets, which in turn would make them less reliant on government aid. Now Peter Thiel, the billionaire co-founder of PayPal and GOP donor, is weighing in on Unz’s plan, saying, “I actually think that it’s a very out of the box idea — but it’s something one should consider seriously.” Thiel, who has donated millions of dollars to GOP causes over the year, including $1 million to the anti-tax group Club for Growth and nearly $4 million to the Endorse Liberty PAC in support of presidential candidate Ron Paul in 2012, agrees with Unz’s assumptions that a higher minimum wage could reduce people’s dependency on welfare. “Given how low the minimum wage is — and how generous the welfare benefits are — you have a marginal tax rate that’s on the order of 100 percent, and people are actually trapped in this sort of welfare state,” he said.
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The idea of a minimum wage increase has been a hot topic of late. President Barack Obama called on Congress to work together to increase the minimum wage to $9 an hour by 2015 in his State of the Union address, saying that the move would raise the income of millions of working families. “It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets,” he said. The current federal minimum wage of $7.25 — which is used in about 30 states that don’t mandate their own — translates to a $15,000 annual salary, which the President noted is well below a living wage in many areas of the country.
Recently, House Democrats filed a “discharge petition” in an attempt to dislodge their bill that increases the minimum wage to $10.10 an hour, which would move the vote to the floor. While it seems unlikely that the petition will get the required votes, some Republican lawmakers have said that they are open to discussion on the issue. Others stick to their opposition, citing a bipartisan Congressional Budget Office report that says that raising the minimum wage would cost the economy 500,000 jobs. Democrats, on the other hand, cite another aspect of the same report — that raising the minimum wage would lift 900,000 people out of poverty. OK, so maybe legislators aren’t finding their common ground quite yet. But if there’s one certainty in politics it’s that politicians follow the money. If major conservative donors continue to push for a minimum wage increase, we might hear some GOP lawmakers singing a different tune.
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