As we approach Labor Day this year, there are signs that our economy continues to improve: unemployment is low, GDP is climbing, and consumer confidence is high. Yet these indicators tell only part of the story — the other part, of course, is an economy and labor market with persistent, structural problems such as rising inequality, wage stagnation, and a lack of social mobility.
But relief is out there, if we know where to look. Whether it’s workers organizing in the streets and online, cities and states passing progressive legislation, or researchers developing innovative solutions to the challenges of the 21st-century economy, there are a myriad of policy options to lift working families. Below are seven examples of things that can be done, right now, to help workers and boost our economy.
1. Raise the Wage to $15
On Labor Day this year, thousands of fast-food and low-wage workers in more than 300 U.S. cities—and, for the first time, in the U.K.—will walk off their jobs to demand $15 and a union, the latest escalation in a campaign that has completely changed the politics of the country. Since it launched in 2012, “Fight for $15” has helped win more than $61.5 billion in raises for nearly 20 million underpaid workers.
A large body of research shows that raising the minimum wage to $15 isn’t just the morally right thing to do, it’s the right thing to do for taxpayers, businesses, and the economy as a whole. As TCF Fellow William Rodgers found in a report last year, a national $15 wage floor would “significantly improve food security in America, with larger increases for nonwhite, high school graduate, and single-parent households.”
2. Encourage Portable Benefits
While job figures and wage growth tend to garner the most attention from economists, there is another aspect of the labor market that is no less important to the well-being of workers today: benefits. As the economy has become more fragmented and less stable, critical benefits like paid sick days, unemployment and health insurance, and retirement packages have become more unreliable for American workers, particularly those in the “gig economy” and independent contractors.
Portable benefits—whereby benefits are tied to the worker, regardless of company or customer—is one solution to help workers in the new economy. And the idea is gaining traction fast, both as a result of organizing efforts, as well as legislative proposals at the local level and strong support from tech firms. To learn more about these portable benefits, see TCF’s report, Protecting Workers in a Patchwork Economy, and our recent update of state action on portable benefits.
3. Fair Scheduling Laws
As the nature of work has changed, stable 9-to-5 work schedule has become even harder to come by. Schedules for many workers, particularly those in the low-wage services industry, can be unpredictable, making people’s next paycheck unpredictable. What is more, on-call work can interfere with employees’ time off and their responsibilities outside of the workplace, such as child care. Volatility is no longer the exception to the rule—TCF research found that three out of five earners experience a 50 percent change in income from month to month.
Fair scheduling legislation can instate penalties for employers who do not give a heads up to workers about schedule changes at least two weeks in advance. Per a San Francisco ordinance, if schedules are changed on short notice, an employer must pay additional hours of work to the affected employee per shift change. The governor of Oregon recently signed similar legislation, making Oregon the first state in the country to adopt such an ordinance. The Oregon law requires seven days notice of a shift change, eventually increasing to fourteen days notice in 2020. This can give a leg up to all workers and to working women in particular, who perform the bulk of care work. Fair scheduling is one piece of a larger agenda to address unstable work, such as reforms to unemployment insurance that would fill in for pay gaps when workers have their schedules cut.
4. Create Good Manufacturing Jobs
Manufacturing jobs are still the heart of the heartland, representing one out of four private-sector jobs in small towns in both the Midwest and the Southeast. Critically, manufacturing workers without a college degree earn $150 per week more than do those working in other industries.
Manufacturers have added back nearly a million jobs during the recovery, and policy will play a decisive role in whether that recovery is sustained. NAFTA renegotiation must put labor standards at the forefront and promote strong rules of origin that bolster manufacturing within North America. Buy America provisions need to be protected and strengthened to support steel and other critical U.S. industries. Strong federal investments in advanced manufacturing will help to ensure that the next generation of technologies is made in the United States. And, we need to act decisively in support of apprenticeships and career education programs if we want the United States to continue to have a world-class manufacturing workforce.
This underscores the need for an increased focus on on-the-job training models. Apprenticeships, for example, offer a structured way to equip young people with industry-specific skills, as well as the cooperation and team skills needed to succeed on today’s factory floors. In many cases, apprentices are paid for the work they perform while learning, enabling them to commit themselves to their trade education more fully. While greater public sector investment in education at all levels is desperately needed, firms must also do their part to increase manufacturing wages, and support trainees, to make it more likely that workers will make the investment in developing the skills that factories need.
5. Strengthen Unions
It’s no coincidence that the drastic decline in union membership in recent decades has occurred almost in lockstep with soaring income inequality, wage stagnation, and millions more families living in poverty. Research suggests that nearly half of the decline in the middle class is due to shrinking rates of unionization. Just as unions and collective bargaining helped build the American middle class, they are critical to efforts to rebuild it today.
A new Century Foundation report, Labor’s Bill of Rights, demonstrates how we can start to strengthen unions by protecting the First Amendment rights of workers. Labor rights have been gutted by bad court decisions and worse legislative action in the last half-century, leaving workers hampered by rules that would never apply to corporations, or to any other form of political activism. By reframing the strategies of worker activism—things like what employees can write on flyers, where they can march, and what they can boycott—as the constitutional rights that they are, labor can begin to regain its power.
6. Rein In Wall Street
Financial institutions have important functions in our modern economy, but that doesn’t mean they should be left unchecked by or immune to broader societal goals. Precisely because finance is a key source of income for the highest earners in the economy, the sector can—and must—play a critical role in reducing income inequality.
As Dean Baker shows in a recent TCF report, a financial transaction tax (FTT)—a levy on a nation’s monetary transactions, such as securities trading—can be an effective way to raise large amounts of revenue, without harming the workings of financial markets. Estimates of a (relatively small) FTT applied in the United States predict a yield ranging from $30 billion on the low end to nearly $600 billion on the high end, an amount that would easily cover the cost of providing free college tuition to all young Americans (among other social programs).
More work remains though. Today, a mere 14 percent of workers have paid time off to care for their family members, and fewer than 40 percent have access to personal medical leave. As a result, almost a quarter of new mothers return to work just two weeks after giving birth. What we need is a nationwide standard, like that offered by Senator Gillibrand and Congresswoman DeLauro’s FAMILY Act, to create a social insurance program that is inclusive of all American families.
Alex Edwards is the Director of Communications at The Century Foundation, where he leads efforts to elevate the organization's ideas and impact in the media, among policymakers, and with key stakeholders.
Seven Things to Do Right Now to Help Workers
As we approach Labor Day this year, there are signs that our economy continues to improve: unemployment is low, GDP is climbing, and consumer confidence is high. Yet these indicators tell only part of the story — the other part, of course, is an economy and labor market with persistent, structural problems such as rising inequality, wage stagnation, and a lack of social mobility.
For far too many Americans, especially people of color and low-income individuals, it hardly feels like a recovery at all. Those at the top of the economic ladder continue to rise, while families at the middle and lower-ends have fewer and fewer rungs available to climb. And millions are struggling to hold on altogether.
But relief is out there, if we know where to look. Whether it’s workers organizing in the streets and online, cities and states passing progressive legislation, or researchers developing innovative solutions to the challenges of the 21st-century economy, there are a myriad of policy options to lift working families. Below are seven examples of things that can be done, right now, to help workers and boost our economy.
1. Raise the Wage to $15
On Labor Day this year, thousands of fast-food and low-wage workers in more than 300 U.S. cities—and, for the first time, in the U.K.—will walk off their jobs to demand $15 and a union, the latest escalation in a campaign that has completely changed the politics of the country. Since it launched in 2012, “Fight for $15” has helped win more than $61.5 billion in raises for nearly 20 million underpaid workers.
A large body of research shows that raising the minimum wage to $15 isn’t just the morally right thing to do, it’s the right thing to do for taxpayers, businesses, and the economy as a whole. As TCF Fellow William Rodgers found in a report last year, a national $15 wage floor would “significantly improve food security in America, with larger increases for nonwhite, high school graduate, and single-parent households.”
2. Encourage Portable Benefits
While job figures and wage growth tend to garner the most attention from economists, there is another aspect of the labor market that is no less important to the well-being of workers today: benefits. As the economy has become more fragmented and less stable, critical benefits like paid sick days, unemployment and health insurance, and retirement packages have become more unreliable for American workers, particularly those in the “gig economy” and independent contractors.
Portable benefits—whereby benefits are tied to the worker, regardless of company or customer—is one solution to help workers in the new economy. And the idea is gaining traction fast, both as a result of organizing efforts, as well as legislative proposals at the local level and strong support from tech firms. To learn more about these portable benefits, see TCF’s report, Protecting Workers in a Patchwork Economy, and our recent update of state action on portable benefits.
3. Fair Scheduling Laws
As the nature of work has changed, stable 9-to-5 work schedule has become even harder to come by. Schedules for many workers, particularly those in the low-wage services industry, can be unpredictable, making people’s next paycheck unpredictable. What is more, on-call work can interfere with employees’ time off and their responsibilities outside of the workplace, such as child care. Volatility is no longer the exception to the rule—TCF research found that three out of five earners experience a 50 percent change in income from month to month.
Fair scheduling legislation can instate penalties for employers who do not give a heads up to workers about schedule changes at least two weeks in advance. Per a San Francisco ordinance, if schedules are changed on short notice, an employer must pay additional hours of work to the affected employee per shift change. The governor of Oregon recently signed similar legislation, making Oregon the first state in the country to adopt such an ordinance. The Oregon law requires seven days notice of a shift change, eventually increasing to fourteen days notice in 2020. This can give a leg up to all workers and to working women in particular, who perform the bulk of care work. Fair scheduling is one piece of a larger agenda to address unstable work, such as reforms to unemployment insurance that would fill in for pay gaps when workers have their schedules cut.
4. Create Good Manufacturing Jobs
Manufacturing jobs are still the heart of the heartland, representing one out of four private-sector jobs in small towns in both the Midwest and the Southeast. Critically, manufacturing workers without a college degree earn $150 per week more than do those working in other industries.
Manufacturers have added back nearly a million jobs during the recovery, and policy will play a decisive role in whether that recovery is sustained. NAFTA renegotiation must put labor standards at the forefront and promote strong rules of origin that bolster manufacturing within North America. Buy America provisions need to be protected and strengthened to support steel and other critical U.S. industries. Strong federal investments in advanced manufacturing will help to ensure that the next generation of technologies is made in the United States. And, we need to act decisively in support of apprenticeships and career education programs if we want the United States to continue to have a world-class manufacturing workforce.
This underscores the need for an increased focus on on-the-job training models. Apprenticeships, for example, offer a structured way to equip young people with industry-specific skills, as well as the cooperation and team skills needed to succeed on today’s factory floors. In many cases, apprentices are paid for the work they perform while learning, enabling them to commit themselves to their trade education more fully. While greater public sector investment in education at all levels is desperately needed, firms must also do their part to increase manufacturing wages, and support trainees, to make it more likely that workers will make the investment in developing the skills that factories need.
5. Strengthen Unions
It’s no coincidence that the drastic decline in union membership in recent decades has occurred almost in lockstep with soaring income inequality, wage stagnation, and millions more families living in poverty. Research suggests that nearly half of the decline in the middle class is due to shrinking rates of unionization. Just as unions and collective bargaining helped build the American middle class, they are critical to efforts to rebuild it today.
A new Century Foundation report, Labor’s Bill of Rights, demonstrates how we can start to strengthen unions by protecting the First Amendment rights of workers. Labor rights have been gutted by bad court decisions and worse legislative action in the last half-century, leaving workers hampered by rules that would never apply to corporations, or to any other form of political activism. By reframing the strategies of worker activism—things like what employees can write on flyers, where they can march, and what they can boycott—as the constitutional rights that they are, labor can begin to regain its power.
6. Rein In Wall Street
Financial institutions have important functions in our modern economy, but that doesn’t mean they should be left unchecked by or immune to broader societal goals. Precisely because finance is a key source of income for the highest earners in the economy, the sector can—and must—play a critical role in reducing income inequality.
As Dean Baker shows in a recent TCF report, a financial transaction tax (FTT)—a levy on a nation’s monetary transactions, such as securities trading—can be an effective way to raise large amounts of revenue, without harming the workings of financial markets. Estimates of a (relatively small) FTT applied in the United States predict a yield ranging from $30 billion on the low end to nearly $600 billion on the high end, an amount that would easily cover the cost of providing free college tuition to all young Americans (among other social programs).
7. Guarantee Paid Family Leave
Every developed country in the world guarantees paid family leave, except for the United States. At least not yet. The momentum for a national paid leave policy in recent years has become undeniable: it’s no longer just advocacy groups, economists and medical professionals leading the charge, but state and federal policymakers on both sides of the aisle.
More work remains though. Today, a mere 14 percent of workers have paid time off to care for their family members, and fewer than 40 percent have access to personal medical leave. As a result, almost a quarter of new mothers return to work just two weeks after giving birth. What we need is a nationwide standard, like that offered by Senator Gillibrand and Congresswoman DeLauro’s FAMILY Act, to create a social insurance program that is inclusive of all American families.
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