According to data from the Organization for Economic Development and Cooperation that was highlighted by the Center for Economic and Policy Research, nearly 25 percent of American workers are in low-wage jobs, defined as “earning less than two-thirds of the national median hourly wage.” This is higher than many other industrialized nations, including the U.K., Canada, and Australia. CEPR found that the developed world’s high number of low-wage jobs “may contribute to broader income and wealth inequality and constitute a threat to social cohesion.”

This post originally appeared in ThinkProgress on January 26, 2012. Reprinted with permission.

About the Author: Pat Garofalo is Economic Policy Editor for ThinkProgress.org at the Center for American Progress Action Fund. Pat’s work has also appeared in The Nation, U.S. News & World Report, The Guardian, the Washington Examiner, and In These Times. He has been a guest on MSNBC and Al-Jazeera television, as well as many radio shows. Pat graduated from Brandeis University, where he was the editor-in-chief of The Brandeis Hoot, Brandeis’ community newspaper, and worked for the International Center for Ethics, Justice, and Public Life.

Since 2009, 88 percent of national income growth has gone to corporate profits, while just one percent has gone to wages, adding another chapter to the decline of the middle class, whose incomes have been shrinking and wages stagnating for decades. In fact, according to data analyzed by the Financial Times, workers’ share of national income has fallen to its lowest level on record, and if it were back at the post-war average, workers would earn an additional $740 billion this year:

“We are the 99%”, the slogan of Occupy Wall Street, is a reference to the rising wealth of the top 1 per cent of US income distribution. But an equally valid slogan might be: “We get 58%”.

That figure is the share of US national income that goes to workers as wages rather than to investors as profits and interest. It has fallen to its lowest level since records began after the second world war and is part of the reason why incomes at the top – which tend to be earned from capital – have risen so much.If wages were at their postwar average share of 63 per cent, workers would earn an extra $740bn this year, about $5,000 per worker, according to FT calculations.

This decline in workers’ share of income is actually holding back the national recovery, as “workers on lower wages consume much of their income, while higher wage earners and those with capital income are more likely to save.” Instead of going to the people who are likeliest to spend it, and thus boost the economy, more income is going to corporations and rich people who are just sitting on it. Corporations are actually holding trillions of dollars in cash reserves (and clamoring for more tax breaks), money that could create millions of jobs if it were deployed in a different fashion.

This blog originally appeared in Think Progress on December 15, 2011. Reprinted with permission.

About this Author: Pat Garofalo is Economic Policy Editor for ThinkProgress.org at the Center for American Progress Action Fund. Pat’s work has also appeared in The Nation, U.S. News & World Report, The Guardian, the Washington Examiner, and In These Times. He has been a guest on MSNBC and Al-Jazeera television, as well as many radio shows. Pat graduated from Brandeis University, where he was the editor-in-chief of The Brandeis Hoot, Brandeis’ community newspaper, and worked for the International Center for Ethics, Justice, and Public Life.

They say a picture is worth a thousand words, and this graph certainly is. (Including, though it’s not what I’m focusing on here, quite a few words about gender inequality.)

Heidi Shierholz writes:

After gains in the 1980s and particularly in the 1990s, hourly wages for young college-educated men in 2000 were $22.75, but that dropped by almost a full dollar to $21.77 by 2010.  For young college-educated women, hourly wages fell from $19.38 to $18.43 over the same period.  Now, with unemployment expected to remain above 8% well into 2014, it will likely be many years before young college graduates — or any workers — see substantial wage growth.

A recent New York Times article adds some more information about what new college graduates face:

The numbers are not encouraging. About 14 percent of those who graduated from college between 2006 and 2010 are looking for full-time jobs, either because they are unemployed or have only part-time jobs, according to a survey of 571 recent college graduates released in May by the Heldrich Center at Rutgers.

And then there is the slice of graduates effectively underemployed, using a college degree for positions that don’t require one or barely scraping by, working in call centers, bars or art-supply stores.

[...]

The Heldrich survey also found that the portion of graduates who described their first job as a “career” fell from 30 percent, if they graduated before the 2008 economic downturn (in 2006 and 2007), to 22 percent, if they graduated after the downturn (in 2009 and 2010).

This isn’t something that will just affect these young workers for a couple years, until the economy recovers. For one thing, a real jobs recovery does not seem to be on the horizon. But even if it is, studies show that people who first enter the job market in a recession face a significant earnings loss that persists for more than 15 years.

Too bad there’s no chance of the federal government doing anything meaningful to create jobs.

This post originally appeared in Daily Kos Labor on September 7, 2011. Reprinted with permission.

About the Author: Laura Clawson is labor editor at Daily Kos. She has a PhD in sociology from Princeton University and has taught at Dartmouth College. From 2008 to 2011, she was senior writer at Working America, the community affiliate of the AFL-CIO.

On June 7, 2011, the Center for American Progress hosted a panel discussion on research conducted on minimum wage increases, and the economic effects these increases caused. Participants included: David Madland (Center for American Progress Action Fund), Helen Neuborne (Ford Foundation), Heidi Shierholz (Economic Policy Institute), Celinda Lake (Lake Research Partners), Sylvia Allegretto (University of California, Berkeley), Michael Reich (University of California, Berkeley), and Paul Sonn (National Employment Law Project).

The most basic rationale behind raising the minimum wage is widely known: the current minimum wage is not a “living wage”, i.e. compensation that can truly allow an individual to meet regular monthly expenses. Data provided by the panel indicated that a woman with two children would need to work three minimum wage jobs in order to place herself in a stable position in most communities across the country. Over two-thirds of those polled on the issue of the minimum wage regularly state they favor an increase, so political action on this front would probably not be overwhelmingly unpopular. Yet the question remains: are there other reasons for raising the minimum wage besides its effect on livings standards and its widespread support?

Perhaps the most important point discussed by the panelists was that the minimum wage can be raised without destroying jobs. Conventional wisdom long held that raising the minimum wage would cause this effect, but recent economic research has tended to disprove this theory. Whether a minimum wage increase is studied at the national level or within a smaller unit (like an individual industry), these recent studies have shown that a minimum wage increase actually has no effect on the number of jobs in the marketplace.

A minimum wage increase would actually be economically beneficial since it would increase the spending power of consumers, which would result in increased aggregate demand. Furthermore, a higher minimum wage would strengthen job stability, decrease job turnover, and benefit the middle class. Job stability and decreased turnover are benefits that would be shared with employers, since they normally must expend additional company resources to train new hires when individuals rapidly cycle in and out of jobs. With less job turnover, employees can also become more experienced.

An increase in the minimum wage could also directly stimulate the economy, and be part of a larger national economic recovery. In a sense, a minimum wage increase involves shifting profits from corporations to workers, since without an increase in pay corporations would normally keep these funds. Research indicates that although allowing companies to keep this money would benefit the economy, the profits can do more economic good when they are transferred to the minimum wage workers. This is because corporations often don’t go out and spend this extra money in the marketplace. Minimum wage workers, however, need to spend what they earn in order to obtain basic necessities. So the extra money put in the pockets of minimum wage workers is actually immediately spent obtaining goods and services.

Finally, a minimum wage increase could be used in conjunction with the Earned Income Tax Credit to provide even greater support for the working class. Using only the EITC in isolation with no minimum wage increase might actually result in a decrease in wages: the EITC encourages individuals to seek employment, but with an increase in the amount of labor available, wages go down. Using both the EITC and a minimum wage increase together would actually increase the positive effects of both. This two-pronged approach also has the benefit of dividing the financial burden of paying for this support: with a minimum wage increase, the employers must face additional costs, and taxpayers cover the EITC. Using both methods results in a more equitable distribution of who pays for the assistance.

The Center for American Progress’s panel raised many interesting questions, and the research cited indicates that the minimum wage need not be seen as an economic burden, but a tool for national growth. With bipartisan support for an increase in the minimum wage already in place, perhaps federal and state governments will take action soon on this important issue.

About the Author: Andrew Laine is a law student and intern at Workplace Fairness.

Wal-Mart is the largest private-sector employer in the United States. It employs more than 1.4 million workers here, but pays them an estimated 12 percent less than average retail workers in the country. Many argue that, while unfortunate, such low wages help poor families since by allowing them to purchase goods cheaply.

That argument was most famously articulated by the current National Economic Council Deputy Director, who before she joined the White House published a paper in 2005 titled “Wal-Mart A Progressive Success Story.” It argued that Wal-Mart could not raise wages without raising prices, which would hurt poor and low income communities

However a study released on Monday by University of California, Berkeley’s Center for Labor Research and Education found that increasing wages to $12 per hour would cost Wal-Mart $3.2 billion if applied to all workers across the United States. That amounts to about 1 percent of the company’s annual sales of $305 billion. Even if Wal-Mart were to pass on the total cost of the wage increase to consumers, researchers estimate that shoppers would pay about $12.50 more per year – or 46 cents per shopping trip – to cover the cost of the pay raise for Wal-Mart workers.

UC Berkley researcher Ken Jacobs doubts that all the costs of a wage increase would be passed on to consumers in the form of increased prices, because increasing prices would lower the amount of goods Wal-Mart would sell.

A worker collects shopping carts outside a Wal-Mart store in Mount Prospect, Ill. (Photo by Tim Boyle/Getty Images)

“Wal-Mart is the largest private employer in this country and it’s dragging down wage job standards for retail and grocery workers. It can clearly afford to pay workers a well wage” says Jennifer Stapleton, assistant director of Making Change at Wal-Mart, which is run by the United Food and Commercial Workers union.

“Even if the company passes on that cost to customers, it would be the same cost as a pack of gum. Consumers would be open to that, instead of feeling guilty for shopping at Wal-Mart.”

Indeed, such a wage increase could really help workers. A $12 an hour wage would mean average annual pay increases of $3,250 to $6,500 for workers making less than $9 an hour, and $1,675 to $2,930 for workers making between $9 and $12 an hour. 41 percent of the pay increase would go to workers in families with total incomes of 200 percent of the poverty line—less than $21,660 a year for a single worker and $44,100 a year for a family of four.

And the cost for the wage increase would not come out of the pocket of poor workers, but 72 percent of the costs of this substantial benefit would be borne by people making above 200 percent of the poverty line.

Despite statistical evidence saying that raising labor prices has very little effect on consumer prices, advocates of low wages claim wages must be keep low to keep consumers good cheap. We hear this same argument applied to free trade: Goods are cheaper from China and other low-wage countries because these countries pay workers a lower wage.

“Even for most manufacturing, the labor cost is a very small percentage in all but some of the most rudimentary manufacturing, like textiles. For things like steel high tech or most manufacturing that is heavily capital intensive the labor impact is minimal,” says Scott Paul, executive director of the Alliance for American Manufacturing, an alliance of businesses and organized labor. “Labor costs in China amount to less than 10% of overall cost, labor cost differential washed away by productivity in the United States.”

Paul points to other countries where workers make higher wages than Americans but have no trade deficit with the U.S. “Average factory compensation for a worker in the United is $32 dollars an hour. In Germany, the average factory worker makes $48 dollars an hour. Despite this, the United State has a $275 billion trade deficit, while Germany has balanced trade with China. How is it that when our labor costs are $16 an hour cheaper than Germany?“ asks Paul. “It has everything to do with our trade policies, infrastructure policies, tax policies and investment in skills, and very little if anything to do with the cost of labor.”

The new attacks on public-sector workers’ salaries and benefits in Wisconsin and other states have triggered a debate about whether labor costs place too much of a burden on taxpayers. Hopefully this debate over paying workers good wages won’t spill into tired old debates about free trade.

About the Author: Mike Elk is a third-generation union organizer who has worked for the United Electrical, Radio, and Machine Workers, the Campaign for America’s Future, and the Obama-Biden campaign. Based in Washington D.C., he has appeared as a commentator on CNN, Fox News, and NPR, and writes frequently for In These Times as well as Alternet, The Nation, The Atlantic and The American Prospect.

This blog originally appeared in These Times on April 19, 2011. Reprinted with Permission.

The incredible response and mobilizations against the coordinated attacks on workers’ rights and middle-class jobs in Wisconsin, Ohio and Indiana have grabbed most of the media spotlight during the past few weeks.

But there are other serious assaults under way in dozens of states, pushed by corporate CEOs and their Republican puppets. Perhaps flying lowest under the radar is one of the most drastic measures, one that even its own supporters blatantly call Michigan’s “financial martial law.”

The so-called emergency managers bill would allow Gov. Rick Snyder (R) to declare a “financial emergency” in a city or school district and appoint a manager with broad powers, including the ability to fire local elected officials, break contracts, seize and sell assets, eliminate services—and even eliminate whole cities or school districts without any public input, according to the Michigan Messenger.

Last week, more than 1,500 people jammed the Lansing Capitol building to protest the bill during the state Senate’s debate. Ken Bower, a United Steelworker (USW) Local 2-21 member from Escanaba, Mich., said:

I’m here to tell the governor that he has to stop this attack on working-class citizens. Removing the people that we put into office without any check or balance is completely undemocratic.

U.S. Rep. John Conyers (D-Mich.) warns that that the bill:

empowers this financial czar with the governor’s approval to force a municipality into bankruptcy, a power that will surely be used to extract further concessions from hardworking public-sector workers.

Different versions of the bill have passed the state Senate and House and final action is expected early this week.

In a related note from Michigan, if there is any question what side Snyder stands on—CEOs’ or working people’s—his budget and tax proposals show he is firmly camped out with his corporate friends. Pat Garofalo at Think Progress points out:

Snyder has proposed ending his state’s Earned Income Tax Credit, cutting a $600 per child tax credit, and reducing credits for seniors, while also cutting funding for school districts by eight to ten percent. At the same time, as the Michigan League for Human Services found, the state’s business taxes would be reduced by nearly $2 billion, or 86 percent.

Elsewhere:

• So-called right to work bills have been introduced in more than a dozen states, including Indiana (temporarily off the table), Maine, Michigan and Pennsylvania with Republican legislatures and governors.

• Paycheck deception bills that would silence workers’ voices in the election process have been or soon will be introduced in nearly two dozen states, including 15 where Republicans control the legislature and hold the governor’s office, including Florida where the bill was approved by a Senate committee this morning.

• Prevailing wage laws protect communities and workers from unscrupulous contractors low-balling bids on taxpayer-funded construction projects by setting wage rates to the local or prevailing standard. Ohio Gov. John Kasich (R), with the support of construction industry CEOs, vows to eliminate Ohio’s prevailing wage law, and legislation has been or will soon be introduced in 19 states, including  nine with dual Republican control.

• In 22 states—12 with Republican governors and legislatures—moves are under way to eliminate Project Labor Agreements (PLAs) that would hurt communities, workers and small businesses by lowering wages.

• Public school teachers and employees are fighting back against assaults in more than a dozen states, including some so-called “education reform” proposals that are thinly veiled attacks on teachers’ rights and privatization schemes.

• Bills attacking immigrant workers’ rights and immigrant children’s education, including many patterned after Arizona’s anti-immigrant law passed last year, have been or will soon be introduced in some 30 states, half of which are Republican controlled.

This blog originally appeared in blog.aflcio.org on March 14, 2011. Reprinted with Permission.

About the Author: Mike Hall is a former West Virginia newspaper reporter, staff writer for the United Mine Workers Journal and managing editor of the Seafarers Log. He came to the AFL- CIO in 1989 and has written for several federation publications, focusing on legislation and politics, especially grassroots mobilization and workplace safety. When his collar was still blue, he carried union cards from the Oil, Chemical and Atomic Workers, American Flint Glass Workers and Teamsters for jobs in a chemical plant, a mining equipment manufacturing plant and a warehouse. He has also worked as roadie for a small-time country-rock band, sold his blood plasma and played an occasional game of poker to help pay the rent. You may have seen him at one of several hundred Grateful Dead shows. He was the one with longhair and the tie-dye. Still has the shirts, lost the hair.

Advocates estimate that tens of billions dollars are stolen from workers every year through wage theft. A national survey of workers in the United States’ three largest cities – New York, Chicago, and Los Angeles – showed the startling finding that 26 percent of those surveyed in low-wage industries were paid less than the minimum wage in the last year and 75 percent were not paid overtime. The survey showed that 15 percent of the earnings of low-wage workers were stolen each year.

Part of the problem is that often workers don’t have the ability to prove that their wages were stolen. Pay stubs do not have uniform standards that clearly indicate overtime, wage per hour, exact days, and hours worked. Ten states do not even require employers to provide pay stubs for workers. The uneven standards and lack of uniformity and clarity in standards makes it very difficult for workers to prove that wages are stolen.

It would cost employers almost nothing to provide workers with such information. Already, employers are required to keep this information and give it to the IRS, state tax authorities, and the U.S. Department of Labor (DOL), just not to the workers. So it’s not as if companies do not already collect this information—they simply don’t want to give it to workers. Earlier this year, the Department of Labor (DOL) issued a statement indicating it intended to make a rule making greater standards and transparency. The Department announced that

Wage and Hour Division [of the Department] intends to publish a proposed rule updating the recordkeeping regulation issued under the Fair Labor Standards Act (FLSA) to assist employers in planning to protect workers’ entitlement to wages that they have earned and bring greater transparency and openness to the workplace.

The proposed rule would address notification of workers’ status as employees or some other status such as independent contractors, and whether that worker is entitled to the protections of the FLSA. The proposed rulemaking would also explore requiring employers to provide a wage statement each pay period to their employees.

But anti-wage theft activists are saying the rule is not taking effect quickly enough.

“We are encouraged that the DOL is proposing a regulation that would mandate pay stubs. But the devil is in the details,” says Ted Smukler, policy director at Interfaith Worker’s Justice Center, which has helped make the country’s wage theft crisis visible nationally. “The regulatory language has not been released, even while this has been on the DOL’s agenda since the fall of 2009. Meanwhile, tens of millions of workers are ripped off every week. Whether it’s through regulatory reform or passing national legislation mandating that businesses provide workers detailed pay records, something must be done.”

It goes without saying that struggling American workers need every dollar they earn in order to survive. But as the U.S. economy sputters back to life after the worst recession in 70 years, it’s worth pointing out that eliminating wage theft would not only be the just thing to do—it could prove an economic stimulus.

This blog originally appeared in www.inthesetimes.com on March 10, 2011. Reprinted with Permission.

About the Author: Mike Elk is a third-generation union organizer who has worked for the United Electrical, Radio, and Machine Workers, the Campaign for America’s Future, and the Obama-Biden campaign. Based in Washington D.C., he has appeared as a commentator on CNN, Fox News, and NPR, and writes frequently for In These Times, Alternet, The Atlantic and The American Prospect. Mike Elk is a labor journalist and third-generation union organizer based in Washington, D.C. He has written for Harper’s Magazine, the American Prospect and In These Times.

About the Author: Kate Thomas is a blogger, web producer and new media coordinator at the Service Employees International Union (SEIU), a labor union with 2.1 million members in the healthcare, public and property service sectors. Kate’s passions include the progressive movement, the many wonders of the Internet and her job working for an organization that is helping to improve the lives of workers and fight for meaningful health care and labor law reform. Prior to working at SEIU, Katie worked for the American Medical Student Association (AMSA) as a communications/public relations coordinator and editor of AMSA’s newsletter appearing in The New Physician magazine.

It’s difficult to imagine anything more basic to a free economy than the right of an employee to be paid for his or her work. Yet this fundamental right is violated in New York’s low-wage industries as a matter of routine. Research from the National Employment Law Project concludes that a fifth of the city’s low-wage workers – an estimated 317,200 working New Yorkers – are paid less than the minimum wage in a given week. Even more are cheated out of the tips they’ve earned, their overtime pay, or the meal breaks they’re legally entitled to. It’s not a case of a few “bad apples” but a well-documented, pervasive pattern of wage theft throughout the city.

In March, I wrote about powerful state legislation drafted and promoted by community organization Make the Road New York to cut the state’s epidemic of wage theft. The Wage Theft Prevention Act stiffens penalties for cheating employees out of wages, encourages workers to come forward, and provides new avenues for investigating and prosecuting wage theft cases – and ensuring violators will pay up.

The bill passed both the state Assembly and Senate in the last legislative session. Yet because each chamber passed a slightly different version of the legislation the bills must be reconciled before the law can be enacted. Legislators will have a small window to act on the bill in the upcoming legislative special session: The Wage Theft Prevention Act sponsored by Senator Diane Savino and Assemblyman Carl Heastie should be a priority.

Clearly low-wage workers and their families are hurt deeply when income they’ve earned is stolen from them. But an environment of pervasive lawlessness at the bottom of our labor market also harms New York’s small businesses, drains revenue from the already depleted city and state budgets, and retards the city’s overall economic recovery.

About the Author Jonathan Tasini: is the executive director of Labor Research Association. Tasini ran for the Democratic nomination for the U.S. Senate in New York. For the past 25 years, Jonathan has been a union leader and organizer, a social activist, and a commentator and writer on work, labor and the economy. From 1990 to April 2003, he served as president of the National Writers Union (United Auto Workers Local 1981).He was the lead plaintiff in Tasini vs. The New York Times, the landmark electronic rights case that took on the corporate media’s assault on the rights of thousands of freelance authors.