Tag Archives: employment

2020 State Minimum Wages

Raising Minimum Wages, Good So Far

New Orleans       While much of the country is stuck at the level of the federal minimum wage, there are enough states and cities that have nudged the numbers up that economists and others are starting to be able to tell with certainty whether the competing claims are correct.  Opponents argue that raising wages above plantation level reduces the number of jobs.  Proponents, and I’m in that number, have claimed that the benefits of increasing wages, lowering inequality, and putting more money into local economies, wildly offsets any small job loss, if in fact, any jobs at all are lost.

Arindrajit Dube, an economist at the University of Massachusetts at Amherst, did a study of state minimum wage increases in California, Oregon, Washington, Colorado, Massachusetts, and New York.  These states had bumped up the numbers in recent years to at least $10.50 per hour through 2018.  The impact would have been directly felt by 20% of the workforce, not counting the multiplier impact of increases for other workers in order to prevent compression of wages causing non-minimum wage workers to feel crimped and resentful of the increases.  Professor Dube found that the job losses were minimal, although not painless.  He found that some businesses raised prices, others improved production methodology, and some actually absorbed the increases by reducing their profit margins.

All of this is good news for our case.  Additional studies in New York State, as well as reporting by the New York Times, seem to confirm that even in the border counties between New York, with an escalating minimum wage now, and Pennsylvania still stuck at $7.25, there were minimal adverse impacts for workers on job losses.  Obviously, it helps that the economy has been good and unemployment low, making this an ideal time, economically, to push wages up from the bottom.

In the days of ACORN’s living wage campaigns, we have gone back and forth over the years with Professor David Neumark, an economist at the University of California at Irvine, who has long studied minimum wage impacts on workers.  He cautions that the results in these relatively higher wage states might not translate in the South “where low-wage workers aren’t evenly distributed across industries and ‘you have fewer and fewer avenues of adjustment.’”  Since there’s absolutely no immediate danger of Southern states getting the raise wages religion for workers, it will be awhile before we have to struggle with this problem.  Meanwhile we are forced to live through the galloping gap between lower wage and higher wage states that is occurring with no action on the federal minimum wage, meant to cope with this problem.

Now, if only the reason that wages weren’t rising was based on the facts, rather than stone cold ideology, we would be in good shape.

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Jobs, Guaranteed Annual Income, and Robots

2015-06-25-1435268405-3625858-8506058779_426b197e66_bNew Orleans   The big whoops are scratching their heads on a weaker than expected jobs report recently. Has the economy begun to sputter after recent acceleration or have we reached something close to full employment? Remember full employment doesn’t mean everyone has a job, but means that we’re at something close to the bottom of the barrel in terms of workers available for hire. Such a situation is not necessarily a happy place still for workers, but something that satisfies business because there are still some available workers and economists are out of clues about how to go lower.

Keep in mind that these are any old jobs that pay a wage which is not to be confused with good jobs or even living wage jobs much less what was once called family-supporting jobs. Economists have also recently expressed concern that Americans are becoming less mobile and willing to relocate to search for work. Not much of a surprise really. The Midwest is still hemorrhaging people, but a lot of states, particularly in the West are staying put, because they are not sure there’s anything better out there or a place they can afford to live where there are rumors of more jobs. If you’re stuck working for McDonalds, why move across the country to do so? Oh, and housing prices are going up, partially because of a shortage of what? Yes, labor!

So, how are people going to make it? How about a threshold level of guaranteed annual income? Organizing as part of the welfare rights movement in the late 60’s, this was our key national demand. $5500 or fight! For a family of four anyway. We didn’t come close to winning that number, though President Nixon proposed a floor for all welfare recipients that was categorically a guaranteed annual income program though it was called the Family Assistance Plan or as we shouted Fight the FAP! Anyway, here’s how it would have worked:

For a family of four without any other income, the FAP would provide $1,600 (2013: $10,121). But a family that did have income from employment would get a declining amount of FAP dollars until family income reached $3,920 (2013: $24,798). A family of four that had been earning $12,652 in 2013 dollars would have had its income increased through the FAP to $18,725. Ultimately, the vast majority of benefits would have gone to the “working poor,” a significant departure from then-existing programs that denied welfare benefits to those who were employed.

Meanwhile under the first President Clinton, welfare recipients and the notion of minimum support for families disappeared so that recipients got zapped, not Fapped, and in some cases have been reduced by some states to a maximum eligibility of only one-year and hardly $200 per month. We’ve changed in Clinton’s words “welfare as we know it” from just mean-spirited to just plain vindictive.

The Swiss just hammered a GAI proposal in a referendum by a 77 to 23% margin. A Scandinavian country is involved in a promising pilot, so all is not lost, but these programs are universal, rather than based on need or work-status. Ironically, some of the impetus behind the current interest in GAI has to do with technological displacement now that economists and others are willing to concede that technology does not guarantee added jobs, but actually shrinks job availability. Estimates by some naysayer economists say, hey, no problem, this will take a couple of decades and tech transitions to robots and the like will only eliminate 9% of US-jobs.

Hmmm. Right now there are roughly 150 million jobs so if this were today, that means losing 13.5 million jobs. Kaboom! That’s a lot of jobs to replace, and in 20 years if we have 180 million jobs, then that’s 16.2 million jobs down the drain. It’s not clear to me how conservatives are going to twist their minds and mouths to blame all of these workers for their lost jobs and lower pay at the hands of economic change?

Something is going to break. If Nixon knew it, we have to wonder why it’s not obvious to everyone already. Today might not be the time for winning the guaranteed annual income, but the numbers and the politics seem to say that the day is coming.

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