Proof Retail Jobs Don’t Need to Be Bad

From today’s New York Times by Eduardo Porter

Bethamy Magrow is grateful that the minimum wage in New York City is rising to $13 at the end of next month. Earning the current minimum of $11 an hour at a Times Square fashion retailer and scheduled to work some weeks for only 19 hours, the 25-year-old sales worker realizes she doesn’t quite clear New York’s poverty line.

It would be nice if her schedule didn’t change so much from week to week, she told me, so she could set up her doctors’ appointments in advance. But at least New York bars retailers from changing the schedule from one day to the next. In any case, jobs she has had at Whole Foods and Pokéworks, a restaurant on Union Square, were no better or worse.

Millions of Americans have similar stories to tell. For all the talk about the “end of retail,” it is one of the largest employers in the country, accounting for about one in eight workers in the private sector. For every miner toiling in the United States, there are almost 25 retail workers. Manufacturing, the apple of President Trump’s eye, doesn’t employ nearly as many.

Typically paying full-time employees less than $33,000 a year, well below the midpoint across the economy, retail jobs have become the work of the lower class, the main source of support for Americans left behind by economic change.

This raises a fairly urgent question: If retail work sets the living standard for so many low-income families, why doesn’t it get more attention?

Read the entire article here.

A Better Deal for American Workers

From today’s New York Times by Sen. Chuck Schumer (D-NY):

Americans are clamoring for bold changes to our politics and our economy. They feel, rightfully, that both systems are rigged against them, and they made that clear in last year’s election. American families deserve a better deal so that this country works for everyone again, not just the elites and special interests. Today, Democrats will start presenting that better deal to the American people.

There used to be a basic bargain in this country that if you worked hard and played by the rules, you could own a home, afford a car, put your kids through college and take a modest vacation every year while putting enough away for a comfortable retirement. In the second half of the 20th century, millions of Americans achieved this solid middle-class lifestyle. I should know — I grew up in that America.

But things have changed.

Today’s working Americans and the young are justified in having greater doubts about the future than any generation since the Depression. Americans believe they’re getting a raw deal from both the economic and political systems in our country. And they are right. The wealthiest special interests can spend an unlimited, undisclosed amount of money to influence elections and protect their special deals in Washington. As a result, our system favors short-term gains for shareholders instead of long-term benefits for workers.

And for far too long, government has gone along, tilting the economic playing field in favor of the wealthy and powerful while putting new burdens on the backs of hard-working Americans.

Democrats have too often hesitated from taking on those misguided policies directly and unflinchingly — so much so that many Americans don’t know what we stand for. Not after today. Democrats will show the country that we’re the party on the side of working people — and that we stand for three simple things.

First, we’re going to increase people’s pay. Second, we’re going to reduce their everyday expenses. And third, we’re going to provide workers with the tools they need for the 21st-century economy.

Over the next several months, Democrats will lay out a series of policies that, if enacted, will make these three things a reality. We’ve already proposed creating jobs with a $1 trillion infrastructure plan; increasing workers’ incomes by lifting the minimum wage to $15; and lowering household costs by providing paid family and sick leave.

Read the entire op-ed here.

Is the Gig Economy Working?—For Some, But Not For Most Workers

From this month’s The New Yorker magazine by Nathan Heller:

The American workplace is both a seat of national identity and a site of chronic upheaval and shame. The industry that drove America’s rise in the nineteenth century was often inhumane. The twentieth-century corrective—a corporate workplace of rules, hierarchies, collective bargaining, triplicate forms—brought its own unfairnesses. Gigging reflects the endlessly personalizable values of our own era, but its social effects, untried by time, remain uncertain.

Support for the new work model has come together swiftly, though, in surprising quarters. On the second day of the most recent Democratic National Convention, in July, members of a four-person panel suggested that gigging life was not only sustainable but the embodiment of today’s progressive values. “It’s all about democratizing capitalism,” Chris Lehane, a strategist in the Clinton Administration and now Airbnb’s head of global policy and public affairs, said during the proceedings, in Philadelphia. David Plouffe, who had managed Barack Obama’s 2008 campaign before he joined Uber, explained, “Politically, you’re seeing a large contingent of the Obama coalition demanding the sharing economy.” Instead of being pawns in the games of industry, the panelists thought, working Americans could thrive by hiring out skills as they wanted, and putting money in the pockets of peers who had done the same. The power to control one’s working life would return, grassroots style, to the people.

The basis for such confidence was largely demographic. Though statistics about gigging work are few, and general at best, a Pew study last year found that seventy-two per cent of American adults had used one of eleven sharing or on-demand services, and that a third of people under forty-five had used four or more. “To ‘speak millennial,’ you ought to be talking about the sharing economy, because it is core and central to their economic future,” Lehane declared, and many of his political kin have agreed. No other commercial field has lately drawn as deeply from the Democratic brain trust. Yet what does democratized capitalism actually promise a politically unsettled generation? Who are its beneficiaries? At a moment when the nation’s electoral future seems tied to the fate of its jobs, much more than next month’s paycheck depends on the answers.

Read the entire article here.

The Great Wage Slowdown of the 21st Century

From today’s NYT “UpShot” Blog  by David Leonhardt:

American workers have been receiving meager pay increases for so long now that it’s reasonable to talk in sweeping terms about the trend. It is the great wage slowdown of the 21st century.

The typical American family makes less than the typical family did 15 years ago, a statement that hadn’t previously been true since the Great Depression. Even as the unemployment rate has fallen in the last few years, wage growth has remained mediocre. Last week’s jobs report offered the latest evidence: The jobless rate fell below 6 percent, yet hourly pay has risen just 2 percent over the last year, not much faster than inflation. The combination has puzzled economists and frustrated workers.

Of course, there is a long history of pessimistic predictions about dark new economic eras, and those predictions are generally wrong. But things have been disappointing for long enough now that we should take the pessimistic case seriously. In some fundamental way, the economy seems broken.

I probably don’t need to persuade most readers of this view, so the better way to think about the issue may be to consider the optimistic case. And last week, in his most substantive speech on domestic policy in months, President Obama laid out that case.

Read the entire article here.

Summer Job Isn’t What It Used to Be

From NYT “OpTalk” Blog, September 9, 2014 by Anna Altman:

Once upon a time, hard-working high school students who took a summer job or worked part-time during the school year got an edge over their unemployed peers. Not only did they earn some pocket money — which many students saved for college — but they were also likely to see increased earning potential long after they graduated.

Not only that, teenagers would prove their work ethic, make professional connections, increase their self-confidence and become more likely to graduate from high school in the first place.

But according to a recent article by Jessica Leber in Fast Company magazine, a summer paycheck no longer comes with many of these advantages. Ms. Leber cites a study published last month by Charles L. Baum and Christopher J. Ruhm for the National Bureau of Economic Research. The study looked at two groups, one of high school students in 1979 and another of students in 1997. It shows that, today, high school seniors who also work 20 hours a week are less likely to have increased earning potential later on than they might have been in 1979.

In concrete terms, the 1979 group was likely to see an 8.3 percent increase in wage-earning capacity, compared with a 4.4 percent increase for the 1997 cohort.

Furthermore, the earlier group was more likely to move into better-paying fields. “Senior year employment was predicted to decrease the probability of subsequently working in the relatively low-paid service sector for the 1979 cohort but to increase it for the 1997 cohort,” Mr. Baum and Mr. Ruhm write. For the latter group, the increase in the likelihood of low-paid service work offset “a portion of the benefit of the early work that otherwise would have occurred.”

Overall, Mr. Baum and Mr. Ruhm’s study concludes that working as a student isn’t what it once was: “Work experience during the high school senior year continues to predict positive effects on labor market outcomes 5-11 years after the expected date of high school graduation, but these beneficial consequences have attenuated fairly dramatically over time.”

That students who work during high school may be at a disadvantage for later earnings seems to confirm the degree to which the economy is proceeding on two tracks: one for low-wage earners, and another for students who are in a financial position to pursue internships or other opportunities that lead to connections.

Fast-food protests: Dozens of workers are arrested in strike for higher pay

From LA Times September 4 by Shal Li, Tina Susman, and Tony Perry.

Dozens of fast-food workers from Los Angeles to Manhattan were arrested as they escalated a fight for better pay Thursday with strikes, rallies and acts of civil disobedience.

Police took 10 people into custody after the protesters linked arms and sat down in front of a McDonald’s in downtown Los Angeles. The sit-in capped a midday march through the urban core by hundreds of workers and their supporters.

In San Diego, 11 marchers were arrested for blocking an intersection in the blue-collar neighborhood of City Heights. They were cited for unlawful assembly and released.

Ralllies and sit-ins occurred outside McDonald’s restaurants across the country, including Rockford, Ill.; Hartford, Conn.; Boston; Philadelphia; Atlanta; and Miami. Elsewhere, 19 fast-food workers were arrested in New York; 42 in Detroit; 23 in Chicago; 11 in Little Rock, Ark.; and 10 in Las Vegas.

In downtown Los Angeles, protesters seeking wages of $15 an hour staged a lunchtime march before converging in front of a McDonald’s on Broadway. To the sounds of a beating drum, they cycled through chants such as “We want 15 and a union!” and “Si se puede!”

After police warned the crowd to stop blocking traffic lanes, nine fast food workers and a minister remained seated. They were arrested and led away, their hands bound with plastic zip-ties behind their backs.

It was just one of several demonstrations that were planned in the Southland.

Before dawn, more than 100 workers converged on a McDonald’s in L.A.’s Exposition Park to join the nationwide protests. They went inside the store for 10 minutes as workers stood stone-faced behind the cash registers.

The protesters held up signs and chanted slogans like “Get up! Get down! Fast-food workers run this town!” near a scrum of media trucks outside the McDonald’s.

Fanny Velazquez, 36, said she was participating in the protest to fight for better wages to support her family. A single mother with three children, ages 11, 14 and 16, she said she struggles to make her $9.34-an-hour pay cover all the bills.

The South Los Angeles resident has been working at McDonald’s for eight years doing a variety of jobs, usually working 20 hours a week, she said. But lately, Velazquez said, the company has often cut her hours to 15 a week. She also qualifies for welfare and food assistance.

“It’s difficult, it’s not enough to pay my bills,” she said.

A series of protests funded in part by the Service Employees International Union and local activist groups have sought to spotlight the plight of low-wage workers and push for higher pay by staging protests and walkouts in more than 100 cities in the one-day demonstration.

Read the entire article here.

Fast-Food Workers Seeking $15 Wage Planning Civil Disobedience

From NYT September 1 by Steven Greenhouse:

The next round of strikes by fast-food workers demanding higher wages is scheduled for Thursday, and this time labor organizers plan to increase the pressure by staging widespread civil disobedience and having thousands of home-care workers join the protests.

The organizers say fast-food workers — who are seeking a $15 hourly wage — will go on strike at restaurants in more than 100 cities and engage in sit-ins in more than a dozen cities.

But by having home-care workers join, workers and union leaders hope to expand their campaign into a broader movement.

“On Thursday, we are prepared to take arrests to show our commitment to the growing fight for $15,” said Terrence Wise, a Burger King employee in Kansas City, Mo., and a member of the fast-food workers’ national organizing committee. At a convention that was held outside Chicago in July, 1,300 fast-food workers unanimously approved a resolution calling for civil disobedience as a way to step up pressure on the fast-food chains.

“They’re going to use nonviolent civil disobedience as a way to call attention to what they’re facing,” said Mary Kay Henry, president of the Service Employees International Union, which has spent millions of dollars helping to underwrite the campaign. “They’re invoking civil rights history to make the case that these jobs ought to be paid $15 and the companies ought to recognize a union.”

President Obama, in a Labor Day speech in Milwaukee, mentioned the fast-food campaign, saying, “All across the country right now there’s a national movement going on made up of fast-food workers organizing to lift wages so they can provide for their families with pride and dignity.”

Mr. Obama added that if he had a service-sector job, and “wanted an honest day’s pay for an honest day’s work, I’d join a union.”

Fast-food chains and many franchise operators have said that $15 an hour was unrealistic and would wipe out profit margins at many restaurants. Some business groups have attacked the campaign as an attempt by a fading union movement to rally a new group of workers.

Some franchise operators have dismissed the walkout, saying that in previous one-day strikes, only a handful of employees at their restaurants walked out, barely disrupting business. But organizers say that workers walked out at restaurants in 150 cities nationwide during the last one-day strike in May, closing several of them for part of the day, with solidarity protests held in 30 countries.

The S.E.I.U., which represents hundreds of thousands of health care workers and janitors, is encouraging home-care aides to march alongside the fast-food strikers. The union hopes that if thousands of the nation’s approximately two million home-care aides join in it would put more pressure on cities and states to raise their minimum wage.

“They want to join,” Ms. Henry said. “They think their jobs should be valued at $15.”

S.E.I.U. officials are encouraging home-care aides to join protests in six cities — Atlanta, Boston, Chicago, Cleveland, Detroit and Seattle. Union leaders say the hope is to expand to more cities in future strikes.

Jasmine Almodovar, who earns $9.50 an hour as a home-care aide in Cleveland, said the $350 she took home weekly was barely enough to support herself and her 11-year-old daughter. “I work very hard — I’m underpaid,” she said. “We deserve a good life, too. We want to provide a nice future to our kids, but how can you provide a good life, how can you plan for the future, when you’re scraping by day to day?”

Within the S.E.I.U., there has been some grumbling about why has the union spent millions of dollars to back the fast-food workers when they are not in the industries that the union has traditionally represented.

But Ms. Henry defended the strategy, saying that underwriting the fast-food push has helped persuade many people that $15 is a credible wage floor for many workers. She said it prompted Seattle to adopt a $15 minimum wage and that San Francisco was considering a similar move. She also said the campaign helped persuade the Los Angeles school district to sign a contract for 20,000 cafeteria workers, custodians and other service workers that will raise their pay, now often $8 or $9 an hour, to $15 by 2016.

“This movement has made the impossible seem more possible in people’s minds,” Ms. Henry said. “The home-care workers’ joining will have a huge lift inside our union.”

Growth Without Jobs

From yesterday’s NYT editorial:

In a statement last Wednesday — just hours after the government reported headline-grabbing economic growth of 4 percent in the second quarter —the Federal Reserve said it would continue to stimulate the economy because, despite overall growth, the labor market remained weak. In a speech the same day in Kansas City, Mo., President Obama echoed the Fed. “I’m glad that G.D.P. is growing, and I’m glad that corporate profits are high, and I’m glad that the stock market is booming,” he said, (which it was before profit-taking at week’s end dented its performance). “But what I really want to see is a guy working 9 to 5, and then working some overtime.”

Those cautionary views were validated on Friday, when the employment report for July showed slower job growth, flat earnings, stagnant hours and stubbornly high long-term unemployment. The challenge now, as always, is to translate official concern over the job market into change for the better.

The economy added 209,000 jobs last month, a decent enough figure in and of itself, but a slow start to the third quarter compared with the average monthly gain of 277,000 last quarter. Worse, July’s relatively slow pace of growth may not be sustainable. Many of last month’s job gains were in automobile manufacturing, which could reflect a statistical blip from shorter-than-usual factory shutdowns in July rather than new positions added.

Moreover, the upswing in the auto industry is tied to a surge in high-cost auto loans to uncreditworthy borrowers, an unstable foundation for future growth. In addition, the sectors that generally add the most jobs each month all slowed in July from their pace in June, including bars and restaurants, retail, health care and temporary services. As for the president’s vision of a 40-hour week plus overtime — well, if only. For the fifth straight month, the average workweek for most of the labor force was stuck at 33.7 hours. Factory overtime, once a mainstay in the lives of working-class Americans, dropped in July for the second straight month. Average hourly wages have, at best, kept pace with inflation over the past year. Pay is languishing, but working longer hours is not an option.

In its statement, the Fed said it was basically a tossup whether the economy would speed up or slow down. Faster growth, however, generally requires a healthy real estate market and that requires a healthy job market, especially for younger workers.

But in July, the jobless rate for workers ages 25 to 34 was 6.6 percent, compared with 6.2 percent over all. Among young people who are working, many are in low-wage or part-time jobs, or jobs that otherwise do not make use of their education or experience. So it is not surprising that the sale of new homes plummeted recently at the fastest pace in nearly a year. Sales of existing homes have risen, a positive sign but a questionable trend given the still-ailing job market.

The most likely scenario is for the economy to continue to muddle along at an overall annual pace of 2 percent to 2.5 percent. The Fed has affirmed its commitment to keep interest rates low until the labor market recovers, but the real test of its resolve will come if and when inflation meets or exceeds its preferred annual rate of 2 percent. In a sluggish economy with significant employment slack, continued stimulus policy would be called for even if inflation exceeded the target, but whether the Fed will oblige is unknown.

As for Mr. Obama, he seems to understand that with a Republican-dominated House and Republican senators keen on winning a majority in the Senate, he is on his own to push for change. He can and should continue to issue executive orders to improve pay and working conditionsfor the federal contract work force. He should work with the Labor Department on upcoming rules to re-establish a broad right to time-and-a-half for overtime. And he should continue to rally public support for Democratic legislation to raise the minimum wage and to combat the growing use of unpredictable part-time scheduling.

None of that is enough to counter significantly the forces responsible for job growth that is too weak, wages that are too low and workweeks that are too short. For that, a functional political climate is needed, one in which leaders find compromise solutions to the nation’s problems. Without that, the Fed’s modest prediction that the economy has an even chance of getting better may in fact be too optimistic.

Higher Minimum Wage, Faster Job Creation

From yesterday’s NYT “Taking Note” Blog by Teresa Tritch:

The standard argument against a higher minimum wage is that it will lead to job loss as employers, unable to pay more, lay off current workers or don’t hire new ones.

It’s important to state up front that research and experience don’t bear that out. The minimum wage has been raised many times without hurting employment. Rather than cut jobs, employers have offset the cost of higher minimums through reduced labor turnover. Employers also cope with a higher minimum by giving lower raises further up the wage scale, raising prices modestly or other adjustments.

Bolstering what we already know, new evidence shows that job creation is faster in states that have raised their minimum wages. The Center for Economic and Policy Research used federal labor data to tally job growth in 13 states* that raised their minimums in 2014. In all but one, New Jersey, employment was higher in the first five months of 2014 (after the wage increase) than it was in the last five months of 2013 (before the wage increase). In nine of the 12 states with faster growth, employment gains were above the national median.

That doesn’t mean that a higher minimum wage caused the job growth, a point clearly stated by the researchers at CEPR.  But it indicates that raising the minimum didn’t hurt job growth, as opponents claim ad nauseam.

That hasn’t stopped those opponents — especially in the restaurant industry — from attacking the findings. But their only argument is bluster. They don’t dispute the job gains in states that have raised their minimums. Rather, they claim that it may mask job loss among low-wage workers directly impacted by the raise. To support that conjecture, they have pointed to a study from 2010, sponsored by the restaurant lobby, which found a link between a higher minimum wage and lower teen employment.

The fact of the matter is that no one knows why job growth has been above trend in states with higher minimum wages. A plausible explanation is that a minimum-wage hike may have a more pronounced stimulus effect in a generally weak economy than it would have in a strong economy, as workers who long have struggled to make ends meet quickly spend their extra dollars, providing an economic boost that help job growth.

What is clear is that there is no need to fear a minimum wage increase — unless, apparently, you are a restaurant lobbyist, whose job depends on keeping wages low for already very low paid waitresses, waiters and fast-food servers.

*Four states passed legislation to raise their minimum wages in 2014: Connecticut, New Jersey, New York, Rhode Island. Nine states automatically increased their minimums in line with inflation: Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont and Washington.