Politics Faulted for Loss of Good Jobs

 A new report by the Center for Economic and Policy Research says fewer  American workers today have a “good job” compared to the past, largely because of policy decisions that have undercut labor.

According to the report,  Where Have All the Good Jobs Gone, fewer than a quarter of American workers have a “good job.”

 A good job is defined as one that pays at least $37,000 per year, has employer-provided health insurance and an employer-sponsored retirement plan.

 The report states that one-fourth (24.6 percent) of the workforce in 2010 (the most recent year for which data are available) had a “good job.” This figure was down from 27.4 percent in 1979.

 The report’s authors, John Smith and Janelle Jones, attribute the decline in good jobs to policy decisions, rooted in politics, that have resulted in a drastic loss of workers’ bargaining power and the restructuring of the labor market since the end of the 1970s.

They say the American economy has lost about one-third of its capacity to generate good jobs since 1979. 

 According to the report:

  •  The share of private-sector workers who are unionized fell from 23 percent in 1979 to less than 8 percent today.
  •  The inflation-adjusted value of the minimum wage today is 15 percent below what it was in 1979.
  • Several large industries, including trucking, airlines, telecommunications, and others, have been deregulated, often at a substantial cost to their workers.
  •  Many jobs in state and local government have been privatized and outsourced.
  •  Trade policy has put low- and middle-wage workers in the United States in direct competition with typically much lower-wage workers in the rest of the world.  
  • A dysfunctional immigration system has left a growing share of our immigrant population at the mercy of their employers, while increasing competitive pressures on low-wage workers born in the United States.
  • Fiinally, leaders have placed  increased emphasis on controlling inflation rather than achieving full employment.

 “In our view, these policy decisions, rooted in politics, are the main explanations for the decline in the economy’s ability to generate good jobs,” state the authors.

  The report says the data show only minor differences in the deterioration of the economy’s ability to generate good jobs between 2007, before the Great Recession began, and 2010, the low point for the labor market. The deterioration relects long-run changes in the U.S. economy, not short-run factors related to the recession or recent economic policy.

 The report  controls for the age and education of the American workforce.

* The Center for Economic and Policy Research (CEPR) was established in 1999 to promote democratic debate on the most important economic and social issues that affect people’s lives.

Wage Theft Goes Unpunished

If you rob a liquor store and get caught, you may serve time in prison.

But nothing much happens when an unscrupulous employer steals money from an employee’s paycheck.

That’s the sad conclusion of a national report recently released by the Progressive States Network (PSN), entitled,  Where Theft is Legal: Mapping Wage Theft Laws in the 50 States.

The PSN report finds that state laws are grossly inadequate to combat the epidemic of “wage theft” by unscrupulous employers in the United States. Some states levy no fines at all for wage theft, according to the report, while most others invoke penalties smaller than a speed­ing ticket.

 Wage theft is the systemic non-payment of wages that owed to workers.

The PSN estimates that more than 60% of low-wage workers suffer wage violations each week. On average, the PSN reports, low-wage workers lose $51 per week to wage theft, or $2,634 per year.  For low-wage workers, that amounts to 15% of their annual income, at average earnings of $17,616 per year.

The problem also costs states millions of dollars each year in lost revenue.  Yet, according to PSN, the vast majority of states have few, if any, protections against wage theft.   “Our comprehensive survey of state laws … reveals that 44 of the 50 states (plus Washington, DC) do not receive passing grades on combat­ing the wage theft epidemic,” states the PSN report.

Even states that ranked highly in the PSN survey –  New York and Massachusetts –  received barely passing grades.

Two states — Alabama and Mississippi — scored zero points in the survey, indicating they essentially offer workers no protection at all against wage theft.

Wage theft typically occurs when employers misclassify workers as exempt employees under federal or state wage and hour laws to avoid paying overtime. For example, a cashier may be called a manager even though he or she has no management duties.. Or employers fail to pay workers the minimum wage or cheat them of earned benefits.  Subcontracting employers often try to shirk their responsibilities under wage-and-hour law by claiming that a temp agency or another inter­mediary is actually the sole employer responsible for wage payment.

The PSN reports the ability of the federal and state governments to enforce wage and hour laws has sharply declined in recent years.

The U.S. De­partment of Labor (USDOL) has only one enforcement agent for every 141,000 workers, down from one per 11,000 workers in 1941.  The PSN reports that state revenue shortfalls and layoffs have resulted in less than 15% of the enforcement coverage offered by state agencies several decades ago.

In 2008, the National Employment Law Project (NELP) and a team of advocates, policy groups, and academic research centers surveyed workers in Chicago, Los Angeles and New York and  found:

  •  64% of low-wage workers experience wage theft each week.
  • 26% are paid under the legal minimum wage.
  • 76% of workers owed overtime go unpaid or underpaid.

Since the NELP report, New York passed the Wage Theft Prevention Act of 2010, which is considered to be the strongest state law in the country, with beefed up anti-retaliation provisions, requirements for notification, and a remedy that allows workers to recover damages.

Founded in 2005, the PSN provides coordinated research and strategic advocacy tools to state legislators and their staffs, empowering these decision-makers to adopt progressive policies.