Wage inequality is surging in California, and not just on the coast. Here’s why

From today’s Los Angeles Times:

Wage inequality has risen more in California cities than in the metropolitan areas of any other state, with seven of the nation’s 15 most unequal cities located in the Golden State.

San Jose, with its concentration of Silicon Valley technology jobs, had the largest gap of any California metro area between those at the top of the pay scale and those at the bottom. It ranked second in the nation after the suburb of Fairfield, Conn., home to wealthy New York financiers, according to a new analysis of 2015 U.S. Census data by Federal Reserve economists. San Francisco and Los Angeles also ranked high on the list.

More surprising, perhaps, is the inclusion of Bakersfield, where high-wage engineering jobs are juxtaposed with poverty-wage farm work.The heavy concentration of California metro areas is a striking turnabout from 1980, when just three figured in the top 15.

As inequality has soared across the United States, most sharply since the 1980s, it has been the focus of widespread debate and become a hot political issue. But less attention has focused on dramatic geographical differences in inequality.

“Wage inequality … has risen quite sharply in some parts of the country, while it has been much more subdued in other places,” wrote Jaison Abel and Richard Deitz, economists at the Federal Reserve Bank of New York, who titled their report, “Why Are Some Places So Much More Unequal than Others?

Large cities with dynamic economies tend to have higher wage disparities, while midsized cities with “sluggish economies” are less unequal because they attract fewer high-wage workers, the authors found.

Read the complete article here.

Yes, America Is Rigged Against Workers

From today’s New York Times:

The United States is the only advanced industrial nation that doesn’t have national laws guaranteeing paid maternity leave. It is also the only advanced economy that doesn’t guarantee workers any vacation, paid or unpaid, and the only highly developedcountry (other than South Korea) that doesn’t guarantee paid sick days. In contrast, the European Union’s 28 nations guarantee workers at least four weeks’ paid vacation.

Among the three dozen industrial countries in the Organization for Economic Cooperation and Development, the United States has the lowest minimum wage as a percentage of the median wage — just 34 percent of the typical wage, compared with 62 percent in France and 54 percent in Britain. It also has the second-highest percentage of low-wage workers among that group, exceeded only by Latvia.

All this means the United States suffers from what I call “anti-worker exceptionalism.”

Academics debate why American workers are in many ways worse off than their counterparts elsewhere, but there is overriding agreement on one reason: Labor unions are weaker in the United States than in other industrial nations. Just one in 16 private-sector American workers is in a union, largely because corporations are so adept and aggressive at beating back unionization. In no other industrial nation do corporations fight so hard to keep out unions.

The consequences are enormous, not only for wages and income inequality, but also for our politics and policymaking and for the many Americans who are mistreated at work.

Read the complete article here.

Opinion: Should women’s soccer players be paid as much as men?

From today’s Washington Post:

The tipping point may have been the sixth goal. Or the seventh. Or the 13th, which turned out to be the last goal scored in the U.S. women’s national team’s handy defeat of Thailand in their first World Cup game.

Whichever goal it was that fans thought should have been the last for ecstatic celebration by the likes of Megan Rapinoe and Alex Morgan on Tuesday, the debate over the players’ sliding, kicking and group hugging drew attention to another issue: the 38 cents on the dollar that the women are paid compared to the men’s team.

On International Women’s Day in March, all 28 members of the women’s team filed a class-action gender discrimination lawsuit against the U.S. Soccer Federation, alleging they do the same job as the men’s team in exchange for lower wages and inferior working conditions. The men’s national team has never won a world title and did not qualify for last year’s World Cup.

The women have been fighting for fair pay for years. Five of them filed a wage-discrimination complaint in 2016 with the Equal Employment Opportunity Commission, the federal agency that enforces civil-rights laws in the workplace. Some of them then made the rounds on major television networks to plead their case.

Read the complete article here.

Walmart workers invite Sen. Sanders to crash the company’s annual meeting

From today’s Washington Post:

For years, Walmart workers have attended the company’s annual shareholders meeting to call for higher wages, better benefits and more predictable schedules.

This year they’ll have someone new delivering the message on their behalf: Sen. Bernie Sanders.

The presidential candidate, who has repeatedly called on Walmart to improve its working conditions, is heading to Bentonville, Ark., on June 5 to introduce a shareholders’ proposal that would give hourly Walmart workers a seat on the company’s board.

“These workers need and deserve a seat at the table,” Sanders (I-Vt.) told The Washington Post. “If hourly workers at Walmart were well represented on its board, I doubt you would see the CEO of Walmart making over a thousand times more than its average worker.”

If passed, the measure would require the retailer to consider its 1.5 million hourly U.S. employees when nominating candidates to its board, which is currently companies of a dozen wealthy executives from companies like McDonald’s and NBCUniversal.

Read the complete article herhttps://www.washingtonpost.com/business/2019/05/21/walmart-workers-invited-special-guest-crash-companys-annual-meeting-bernie-sanders/?utm_term=.92102ae998b9e.

Workers, Should You Tell the World How Much Money You Make?

From today’s New York Times:

There are many questions Alison Green is asked as a columnist who writes about workplace issues. There was the woman who wanted to know if she should attend couple’s therapy with her boss and the boss’s boyfriend. (The boyfriend happened to be her father.) Another time she heard complaints about a janitor who cast a hex on her colleagues.

But Ms. Green was taken aback recently when asked about her salary, a topic so fraught even she couldn’t come up with a good answer. “No one has ever asked me that,” she said. “I don’t want to say.”

Many employees are loath to discuss their salaries, she said, worried it would cause resentment, or worse, among peers. “We are all so weird about telling people how much money we make, even me.”

Perhaps it is why, too, Ms. Green recently asked readers of her “Ask A Manager” website to share their job title, where they live and how much they make each year. Answers were anonymous; the data was compiled in a spreadsheet on Ms. Green’s website so people could sort through the data.

Within a half-hour, she had 1,000 responses. A day later, so many people posted their salaries her website froze. So far, three weeks later, she has more than 26,000 responses, everything from an accountant in Chicago who makes $90,000 to a librarian in Austin who earns $39,000. She was surprised by the overwhelming response: Previous surveys in 2014 and 2017 garnered a fraction of interest, fewer than 2,700 comments apiece.

Why the interest now? Attitudes about workers disclosing pay are shifting, for one, as unemployment has reached a five-decade low. And the gig economy has made salary comparing a near necessity for many. (How else does a person know what to charge if they are a freelancer?)

Read the complete article here.


He Has Driven for Uber Since 2012 and He Makes About $40,000 a Year

From today’s New York Times:

Uber’s public stock offering next month will make a bunch of people remarkably rich. Peter Ashlock is not one of them, although he has toiled for the ride-hailing company almost since the beginning.

Mr. Ashlock, who will be 71 next week, has racked up more than 25,000 trips as an Uber driver since 2012. His Nissan Altima has 218,000 miles on it — nearly the distance to the moon. His passengers rate him 4.93 out of five stars. His favorite review: “Dude drove like a cabdriver.”

While he is an integral part of Uber’s success, Mr. Ashlock is barely getting by. His 2018 tax return will show an adjusted gross income in the neighborhood of $40,000, better than 2016 and 2017. But he has maxed out his $3,200 credit limit at the local Midas car-repair shop and needs to come up with $5,000 to pay his taxes. He has Social Security but no savings to buy a new car that will let him keep working.

Silicon Valley has always been a lottery where immense wealth is secured by a few while everyone else must hope for better luck some other time. Rarely, however, has the disparity been on such stark display as with Uber. Its stock market value is expected to be about $100 billion, which would make it one of the richest Silicon Valley public offerings of all time.

Among those with something to celebrate: Uber’s founders, the Japanese conglomerate SoftBank, the elite venture capitalists Benchmark and Google’s GV, Saudi Arabia’s Public Investment Fund and the mutual fund giant Fidelity. Some have already cashed in. Travis Kalanick, Uber’s co-founder and chief executive until he was forced out after a series of scandals, reaped $1.4 billion by selling fewer than a third of his shares to private investors in 2017.

As independent contractors, drivers are not eligible for employee benefits like paid vacations or stock options. Uber said Thursday that it would offer bonuses of $100 to $10,000 to long-serving drivers. Its chief competitor, Lyft, did the same when it went public in March.

Read the complete article here.

The Gig 101: The Con of the Side Hustle

From today’s New York Times:

An attractive woman behind the wheel of a gray car says to the camera, “These days anyone can have a side hustle.” She then whisks off to the gym, for her other job as a personal trainer, beaming as she goes from one gig to another. This ad for the ride-share company Uber seeks to entice new drivers to join their ranks by using the “side hustle” come-on. The company isn’t alone.

Similarly laborious “side hustles” are celebrated in popular media and advertising, from self-help articles and other web content that exhort us to, say, work for a design studio part-time or sell CBD oil (great as a side hustle for moms, supposedly). Even pastors can use a side hustle, according to one evangelical blogger.

During tax season, you will also find filing suggestions for side hustlers. (Report all of your income! Deduct expenses!)

The truth is, working multiple gigs creates complications when you do your taxes. Compared with those with salaried jobs, who pay their taxes seamlessly through withholding, for side hustlers “the process will be a lot messier,” according to Steven Dean, the faculty director of the Graduate Tax Program at New York University Law School. You have to estimate and pay taxes on your own, he notes, and your expenses may not be reimbursed by your employer. In other words, paying quarterly tax estimates gives workers with side hustles yet another side hustle — being their own accountant, although this gig doesn’t even pay.

Nevertheless, this nouveau moonlighting continues to be exalted ­as cool, empowering or freeing. This mantra is false: Side hustles are not simply a new version of working as a “wage slave” so that we can do what we love in our off hours. Instead, far more often, people take on second or third side hustles because of wage stagnation or low pay at their full-time jobs.

Read the complete article here.

The stock market boom has given CEOs a raise. What about average workers?

From today’s PBS News Hour:

Over the past few years, many economic indicators have returned to where they were before the Great Recession — among them, the unemployment rate, which has dropped below the 5 percent mark of 2007, housing prices and the stock market, which has nearly doubled its pre-recession peak.

Another, buoyed by rising stock prices: the enormous pay difference between CEOs of the largest U.S. companies and their employees, who earn more than 300 times less than those at the top, according to new data.

Here’s a closer look at the issue.

How has CEO compensation changed?

In 2000, the average CEO was paid 343 times more than the average worker, according to the liberal-leaning Economic Policy Institute. That number dropped to about 188-to-1 in 2009.

It has since rebounded to 312-to-1 last year, according to a report from the Economic Policy Institute.

From 2016 to 2017, the average pay of CEOs from the top 350 publicly traded firms increased 17.6 percent — to $18.9 million — even after being adjusted for inflation, the group found.

How to close the gap

The reason for the pay disparity between CEOs and employees is relatively simple. Closing the gap is much more complex.

A number of methods have been proposed to close the gap, including a cap on compensation, clawbacks for poor performance or executive misconduct, and, as mentioned previously, mandatory publishing of CEOs’ salaries.

James Galbraith, the director of the University of Texas Inequality Project who also served as an adviser to Sen. Bernie Sanders’ presidential campaign, said U.S. companies should look to other countries where laws encourage business leaders to reinvest in their tangible products instead of their stocks.

Read the complete article here.

Why You Should Tell Your Co-Workers How Much Money You Make

From today’s New York Times:

So how much do you make?

It’s a loaded, deeply personal and often uncomfortable question. Along with our weight and age, our salary is a number to which we’ve assigned almost incomparable value.

And, when we’re asked, what many of us really hear is this: What’s your worth as a person?

“Money is so tied up with really complex and difficult emotions, like shame, success, fear of failure and how people view you,” said Brianna McGurran, a money expert at the personal finance blog NerdWallet. “So when you’re talking about how much you earn, or how much you’re saving, a lot of people end up tying that to their self-worth.”

She added: “Salary is so close to our identity. It’s the core part of all of this.”

That money — along with sex, politics and religion — is a topic best avoided in polite conversation is a cultural concept many of us are raised on, and taboos around discussing income can be particularly sensitive.

Read the complete article here.

In America, wage growth is getting wiped out entirely by inflation

From today’s Washington Post:

Rising prices have erased U.S. workers’ meager wage gains, the latest sign strong economic growth has not translated into greater prosperity for the middle class and working class.

Cost of living was up 2.9 percent from July 2017 to July 2018, the Labor Department reported Friday, an inflation rate that outstripped a 2.7 percent increase in wages over the same period. The average U.S. “real wage,” a federal measure of pay that takes inflation into account, fell to $10.76 an hour last month, 2 cents down from where it was a year ago.

The stagnant pay comes despite accelerating U.S. growth, which has increased in the past year and topped 4 percent in the second quarter of 2018 — the highest rate since mid-2014.

The lack of raises have befuddled economists and policymakers, who hoped that after job openings hit record highs and the unemployment rate dipped to the lowest level in decades, employers would give beefy raises to attract and retain employees. But so far, gains have been slight, and small recent increases are now being eclipsed by rising prices.

Inflation hit a six-year high this summer, driven in part by a jump in energy costs. The price of a gallon of gas has increased 50 cents in the past year, up to a national average of $2.87, according to AAA. Some analysts expect the climb in energy prices to halt soon, which should bring the overall inflation rate down and possibly lift real wages slightly.

Consumers are also paying more for housing, health care and car insurance, the federal government reported Friday. Additional price hikes could be coming as President Trump’s new tariffs boost prices of cheap imported products U.S. consumers rely on. And many economists warn that growth might have peaked for this expansion.

Read the complete article here.