Providing work for America’s workers (Part 2)

Part 2 – Supporting Good Jobs
(A 5-part series by the Economic Policy Institute)

(The Economic Policy Institute has developed a FIVE POINT working people’s agenda to (1) provide a planning guideline for the new Trump administration to put Americans back to work and (2) provide a benchmark to judge whether or not President Trump is really the workingman’s president he pledged to be in his campaign. This is Point 2.)

Part 2: Strengthen—not gut—rules that support good jobs

Preserving, expanding rules supporting good jobs with high pay, benefits, work-family balance, discrimination freedom and wage theft would create secure families, fairer economy.

Donald Trump the campaigner pledged to “get rid of the regulations that are destroying us.”

But many regulations help ensure that the economy creates good jobs in which American workers, who are increasing their productivity, get their fair share of economic growth. Other rules enable work-family balance by carving out protections for American workers from excessive or unscheduled corporate demands on their time.

Policymakers should not be undercutting American families by destroying the regulations that support them. Instead, local, state, and federal lawmakers need to strengthen the regulatory safeguards that support good wages, help workers balance work and family needs, raise living standards, and ensure greater equity. And they need to fix an immigration system in which employers who exploit and underpay immigrant workers bring down wages for all workers.

To support rising wages and work policymakers should:

  • Raise the federal minimum wage to $15 by 2025 and index it to wage growth.

For some employers, economists, and even policymakers, $15 sounds high. But had the federal minimum wage risen alongside productivity since 1968 (the way it had for the first 30 years of its existence) it would be well over $15 today. Instead the value of the minimum wage has been routinely beaten down by inflation between increases.

Today it languishes at $7.25. A $15 minimum wage, combined with the Earned Income Tax Credit and other social supports, would ensure that even the lowest-paid workers could attain a decent standard-of-living if they work full time.

A $15 minimum wage would lift the earnings of the bottom third of the workforce, generate robust wage growth overall, and fuel economic growth. Indexing the minimum wage to growth in the median wage would provide economic certainty to both employers and workers and tie the minimum wage to economic fundamentals rather than the whims of politicians.

  • End forced arbitration in employment contracts and consumer financial services agreements. 

An increasing number of companies are requiring consumers or employees to waive their right to sue, to participate in a class action lawsuit, or to appeal arbitration rulings as a condition of employment or when buying a product or service. Instead, the employee or consumer must submit any dispute that may arise to binding arbitration.

In disputes between parties that have substantially equal bargaining power, voluntary agreements to arbitrate are a practical and well-established way of resolving issues without litigation. However, binding arbitration is bad for consumers and employees.

Arbitrators friendly to corporate interests conduct secretive, and often inferior, forums in which companies are more likely to prevail. Even if employees or consumers do prevail, they are less likely to recover their due, and once a dispute is decided by an arbitrator, there is no effective right of appeal.

Forced arbitration makes it much harder to fight gender and racial discrimination, wage theft (when employers don’t pay workers for all their hours), employee misclassification (when employees are called “contractors” so that they don’t get the benefits and protections), and other wage and hour violations.

  • Build a universal child care system. 

A nationwide child care system could provide economic security to families, improve educational outcomes, and narrow achievement gaps between white and minority students and high- and low-income students.

Federal legislation should expand public funding for home visits by nurses trained to help parents make healthy choices before and after childbirth; give all families access to high-quality child care provided by professional staff trained to provide early childhood education; and boost the wages and benefits, and training and advancement opportunities offered to early childhood caregivers and teachers.

In the meantime, Congress should boost the generosity and reach of the child tax credit (CTC) and the child and dependent care credit (CDCC).

  • Enact paid sick leave.

Allowing workers to earn paid sick leave would lead to stronger, healthier, and more economically secure families.

Access to this workplace benefit is vastly unequal. Working parents, particularly lower-wage ones, are often forced to choose between staying home with a sick child and earning a paycheck. When parents cannot take off work, children are sometimes sent to school ill, diminishing their learning experience and exposing other students, teachers, and staff to infection.

When employees go to work sick, they endanger their own health and the health of their colleagues while jeopardizing the safety and quality of their work. At the same time, staying home and putting one’s own health first can result in unpaid bills and insufficient food.

  • Enact paid family leave.

Although the Family and Medical Leave Act of 1993 guarantees 12 weeks of job-protected family leave, half of workers are not qualified to receive it (because it only applies to large employers and workers with a minimum job tenure), and the act does not require the leave to be paid.

Because there is currently no national standard regarding paid family leave, each worker is left to the whims of individual company policies, which often means no paid family leave at all. Therefore, workers have to make difficult choices between their careers and their caregiving responsibilities precisely when they need their paychecks the most, such as following the birth of a child or when they or a loved one falls ill.

The lack of paid family leave particularly affects women, as they currently take on the lion’s share of unpaid care work. They often leave the paid labor force to care for loved ones when the need arises, forcing these women to forgo opportunities for career advancement and to end up with lower lifetime earnings (and therefore lower retirement income) than their male peers.

Poorly constructed measures for paid leave that provide tax credits that do not help lower-income households and restrict leave for pregnant mothers are not acceptable substitutes for intelligent, progressive leave policies.

  • Promote sensible and fair work scheduling.

Irregular and unpredictable work schedules are bad for workers.

Often, these schedules so disrupt employees’ work-family balance that children suffer from lower educational achievement. Responsible policy should protect the most vulnerable workers against excessively unreasonable demands for total flexibility from their employers.

Workers deserve to have a life away from work, and to be able to schedule when doctor visits and teacher meetings and other personal commitments happen. Legislation to insure predictability in scheduling should be passed at state and federal levels.

  • Increase by 50 percent the Department of Labor’s budget authority for labor standards enforcement, including employee misclassification, wage theft, and prevailing wage violations.

 Strengthening the capacity of the Wage and Hour Division at the Labor Department could put hundreds of millions of dollars into workers’ wallets and into the economy.

Wage theft, whereby companies fail to pay wages that workers are legally entitled to, costs workers tens of billions of dollars a year. By essentially transferring income from low-wage employees to business owners, wage theft worsens income inequality and hurts workers and their families.

The misclassification of employees as independent contractors also exacts a huge economic toll. Misclassified workers often are denied access to critical benefits and protections such as the minimum wage, overtime compensation, family and medical leave, unemployment insurance, and safe workplaces. And because companies don’t pay taxes on their misclassified employees, state and federal budgets, unemployment insurance, and workers’ compensation funds suffer, hurting taxpayers and the economy.

  • Use all the tools at our disposal to eliminate discrimination in hiring, promotion, and pay.

Public policymakers, employers, and the educational system should work together to attack the factors that harm labor market opportunities of women and workers of color.

These factors include not just overt discrimination but differences in how our culture and education system steers men and women into different careers. Unequal divisions of labor at home and unnecessary employer demands for excessive and irregular hours are particular impediments to women.

The solutions are as far-reaching as paid family leave policies, which can reduce the gender wage gap—particularly when men share in leave-taking responsibilities. And solutions are as basic as requiring employers to demonstrate that differences in hiring, pay, and promotion are based on factors other than sex or race, strengthening penalties for equal pay violations, and eliminating the separate and lower minimum wage for tipped workers.

Because women and people of color make up a disproportionate share of restaurant servers and others who rely on tips for a living, the subminimum wage for tipped workers widens gender and racial wage gaps and results in worse economic outcomes.

  • Reform immigration laws to provide legalization and a path to citizenship for unauthorized immigrants.

Legalizing and providing work authorization to the current unauthorized immigrant workforce (approximately five percent of all workers) would raise wages.

Because unauthorized immigrant workers fear employer retaliation based on their immigration status—which can often mean deportation—they are practically unable to complain about workplace violations and wage theft. This leaves them vulnerable to exploitation and willing to accept lower wages than similarly situated U.S. workers, and this, in turn, puts downward pressure on the wages of all workers in the major occupations in which unauthorized workers are employed. Legalizing unauthorized immigrant workers would eliminate this source of downward wage pressure.

  • Reform—rather than expand—guestworker programs.

At present, thanks to inadequate regulation and enforcement, U.S. employers are exploiting guestworker programs to keep wages low in major guestworker occupations (such as landscaping and information technology), to undercut labor standards for U.S. workers, and sometimes even to replace U.S. workers with indentured and much lower-paid temporary migrant workers.

Guestworkers—who make up approximately one percent of the U.S. workforce—arrive indebted to labor recruiters who connect them to U.S. employers, and may only work for the employer who sponsored their visa.

As with unauthorized immigrant workers, this means that they are practically unable to complain about workplace violations and wage theft, because complaining about wages or working conditions can mean getting fired, which means losing their visa status and becoming deportable. As a result, some categories of these “legal” guestworkers earn wages similar to wage levels of unauthorized immigrant workers.

For guestworker programs to be fair to both U.S. workers and temporary migrant workers, laws should be reformed to allow U.S. workers to have the first opportunity to apply and be hired for job openings in the United States, and guestworkers should never be paid less than the local average wage in their occupation.

Next week: Agenda Point 3: Protect the basic human right of worker organization.

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