Blog | Economic Policy Institute https://www.epi.org Research and Ideas for Shared Prosperity Mon, 18 Mar 2024 19:30:00 +0000 en-US hourly 1 https://wordpress.org/?v=6.4.3 The estate tax should help to level the playing field. Instead it’s letting the rich get richer. https://www.epi.org/blog/the-estate-tax-should-help-to-level-the-playing-field-instead-its-letting-the-rich-get-richer/ Fri, 15 Mar 2024 14:39:30 +0000 https://www.epi.org/?post_type=blog&p=280654 This is an excerpt from an op-ed that originally published in CNN. Read the full op-ed here.

The federal estate tax should be an effective tool to slightly level the playing field between those who inherit wealth and those who have to work for a living. It should also ensure that family dynasties who’ve amassed enormous fortunes pay their fair share in taxes.

But because policymakers have repeatedly doubled and tripled the immense sums that can be passed on before the tax kicks in, the estate tax today affects almost no one.

The estate tax exemption—the value of an estate that a mega-millionaire can own before facing taxes—has grown so much over the past quarter century that just eight of every 10,000 people who died in 2019 left behind an estate that was large enough to be subject to the tax, currently at 40%.

Read the full op-ed here.

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Gender wage gap persists in 2023: Women are paid roughly 22% less than men on average https://www.epi.org/blog/gender-wage-gap-persists-in-2023-women-are-paid-roughly-22-less-than-men-on-average/ Fri, 08 Mar 2024 20:48:18 +0000 https://www.epi.org/?post_type=blog&p=280539 March 12 is Equal Pay Day, a reminder that there is still a significant pay gap between men and women in our country. The date represents how far into 2024 women would have to work on top of the hours they worked in 2023 simply to match what men were paid in 2023. Women were paid 21.8% less on average than men in 2023, after controlling for race and ethnicity, education, age, and geographic division. 

There has been little progress in narrowing this gender wage gap over the past three decades, as shown in Figure A. While the pay gap declined between 1979 and 1994—due to men’s stagnant wages, not a tremendous increase in women’s wages—it has remained mostly flat since then.

Figure A
Figure A

The gender wage persists across the wage distribution 

The experience of men and women across the wage distribution differs considerably, but the gender wage gap persists no matter how it’s measured. Women are paid less than men as a result of occupational segregation, devaluation of women’s work, societal norms, and discrimination, all of which took root well before women entered the labor market.  Figure B shows that women are paid less than men at all parts of the wage distribution.

The wage gap is smallest among lower-wage workers, in part due to the minimum wage creating a wage floor. At the 10th percentile, women are paid $1.86 less an hour, or 12.8% less than men, while at the middle the wage gap is $3.87 an hour, or 14.9%. These low- and middle-wage gaps translate into annual earnings gaps of over $3,800 and $8,000, respectively, for a full-time worker. The 90th percentile is the highest wage category we can compare due to issues with topcoding in the data, which make it difficult to measure wages at the top of the distribution, particularly for men. Women are paid $14.74 less an hour, or 22.6% less, than men at the 90th percentile. That would translate into an annual earnings gap of over $30,000 for a full-time worker. 

Figure B
Figure B

Women are paid less than men at every education level 

Despite gains in educational attainment over the last five decades, women still face a significant wage gap. Among workers, women are more likely to graduate from college than men, and are more likely to receive a graduate degree than men. Even so, women are paid less than men at every education level, as shown in Figure C

Among workers who have only a high school diploma, women are paid 21.3% less than men. Among workers who have a college degree, women are paid 26.8% less than men. That gap of $13.52 on an hourly basis translates to roughly $28,000 less annual earnings for a full-time worker. Women with an advanced degree also experience a significant the wage gap, at 25.2% in 2023. What’s very stark from the data is that women with advanced degrees are paid less per hour, on average, than men with college degrees. Men with a college degree only are paid $50.37 per hour on average compared with $48.21 for women with an advanced degree.  

Figure C
Figure C

Black and Hispanic women experience the largest wage gaps 

If the overall gender pay gap isn’t enough cause for alarm, the wage gaps for Black and Hispanic women relative to white men are even larger due to compounded discrimination and occupational segregation based on both gender and race/ethnicity. In Figure D, we compare middle wages—or the average hourly wage between the 40th and 60th percentile of each group’s wage distribution—for white, Black, Hispanic, and Asian American/Pacific Islander (AAPI) women with that of white men. 

White women and AAPI women are paid 83.1% and 90.3%, respectively, of what non-Hispanic white men are paid at the middle. Black women are paid only 69.8% of white men’s wages at the middle, a gap of $8.65 on an hourly basis which translates to roughly $18,000 less annual earnings for a full-time worker. For Hispanic women, the gap is even larger at the middle: Hispanic women are paid only 64.6% of white men’s wages, an hourly wage gap of $10.15. For a full-time worker, that gap is over $21,000 a year. 

Figure D
Figure D

These pay gaps are even larger when examining average hourly wages for all workers instead of just the average for middle-wage workers because of the disproportionate share of highly paid workers who are white men, which pulls up their average. Using the average measure, Black and Hispanic women are paid 63.4% and 58.3%, respectively, of white men’s wages, an hourly wage gap of $14.80 for Black women and $16.90 for Hispanic women. Even when controlling for age, education, and geographic division, Black and Hispanic women are both paid about 68% of white men’s wages. In other words, very little of the observed difference in pay is explained by differences in education, experience, or regional economic conditions. 

Policymakers must pursue a range of options to close the gender pay gap 

There is no silver bullet to solving pay equity, but rather a menu of policy options that can close not only the gender pay gap but also gaps by race and ethnicity. These include requiring federal reporting of pay by gender, race, and ethnicity; prohibiting employers from asking about pay history; requiring employers to post pay bands when hiring; and adequately staffing and funding the Equal Employment and Opportunity Commission and other agencies charged with enforcement of nondiscrimination laws. 

We also need policies that lift wages for most workers while also reducing gender and racial/ethnic pay gaps, such as running the economy at full employment, raising the federal minimum wage, and protecting and strengthening workers’ rights to bargain collectively for higher wages and benefits. 

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February jobs report: The labor market is strong—but decidedly not overheating as wage growth continues to moderate https://www.epi.org/blog/february-jobs-report-the-labor-market-is-strong-but-decidedly-not-overheating-as-wage-growth-continues-to-moderate/ Fri, 08 Mar 2024 15:18:16 +0000 https://www.epi.org/?post_type=blog&p=280474 Below, EPI economists offer their insights on the jobs report released this morning, which showed 275,000 jobs added in February.

From EPI senior economist, Elise Gould (@eliselgould):

Read the full thread here.

 

From EPI president, Heidi Shierholz (@hshierholz):

 

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What’s behind the corporate effort to kneecap the National Labor Relations Board?: SpaceX, Amazon, Trader Joe’s, and Starbucks are trying to have the NLRB declared unconstitutional—after collectively being charged with hundreds of violations of workers’ organizing rights https://www.epi.org/blog/whats-behind-the-corporate-effort-to-kneecap-the-national-labor-relations-board-spacex-amazon-trader-joes-and-starbucks-are-trying-to-have-the-nlrb-declared-unconstitutional/ Thu, 07 Mar 2024 14:43:11 +0000 https://www.epi.org/?post_type=blog&p=280406 Workers want unions now more than they have in a generation. Evidence suggests more than 60 million non-union workers would like a union at their workplace. The National Labor Relations Board (NLRB)—the agency established by Congress in 1935 to protect workers’ organizing rights—is handling more union representation elections and unfair labor practice charges than they have in years.

So how have companies responded to this surge in worker organizing?

Some have honored their workers’ choice and tried to start a positive labor-management relationship, as Microsoft, New Flyer, Ben & Jerry’s, and other companies have done. These companies see the value of a constructive relationship with their employees to their bottom line.

Others have taken the opposite tack—to the extreme. Led by Elon Musk’s SpaceX, and joined by Amazon, Trader Joe’s, and Starbucks, these companies are engaged in a legal battle trying to have the NLRB declared unconstitutional, by resurfacing long-rejected constitutional arguments about the agency’s structure. If they succeed, it would kneecap the agency and its operations at the very time workers need it the most.

Why are these companies taking this scorched-earth approach? What is motivating these attacks? 

In the last two years, workers at all of these companies have exercised their rights under our labor law to come together and act collectively to improve conditions at their workplace. The law protects this collective action regardless of whether workers are trying to form a union. 

Baristas at nearly 400 Starbucks locations have voted to form a union. Amazon warehouse workers in Staten Island voted to unionize two years ago this month. Workers at several Trader Joe’s locations have unionized in the last two years. None of these workers has a collective bargaining agreement yet, because Amazon, Trader Joe’s, and Starbucks have stalled the bargaining process—an all-too-typical move by corporations when workers first organize. (The recent announcement by Starbucks Workers United and Starbucks committing themselves to negotiate a foundational framework for bargaining gives reason for hope that a first-contract breakthrough at that company is near.)

Collectively, these companies have been charged with hundreds of violations of workers’ organizing rights, according to NLRB data obtained through an EPI public record request. Together, the companies have been charged with firing pro-union workers, retaliating against organizing by cutting hours, closing shops, denying benefits being provided to non-union workers, and bargaining in bad faith. The NLRB has sought, and won, several injunctions in federal court, where judges have ordered the companies to rehire workers who they illegally fired, and otherwise comply with the law.

According to the NLRB, there are currently more than 250 open or settled cases against Amazon for violating workers’ organizing rights. Three administrative law judges have already ruled against Amazon, and a federal court has ordered Amazon to not interfere with workers’ organizing rights. 

There are 741 open or settled cases against Starbucks. The NLRB has won two court injunctions ordering Starbucks to re-hire baristas they illegally fired for organizing. In all, Starbucks has been ordered to reinstate 59 baristas who were illegally fired. To date, NLRB administrative law judges have issued 48 decisions finding that Starbucks has broken the law.

Trader Joe’s also has been charged with retaliating against workers for organizing activity, and for failing to bargain in good faith. 

While most of these charges concern illegal interference with workers seeking to form a union, the charges against SpaceX involve workers coming together to address workplace issues through what is known as “protected concerted activity.” Eight SpaceX employees joined together and wrote an open letter raising workplace concerns, including concerns about comments by Elon Musk on workplace issues. In retaliation, they were fired. The NLRB brought a complaint against Elon Musk and SpaceX, alleging that the company had illegally interfered with the workers’ right to engage in collective action. 

Rather than challenging the complaint through the usual processes, SpaceX sued the NLRB in federal court in Texas, claiming the agency’s structure is unconstitutional. Ironically, two of SpaceX’s lawyers—Harry Johnson and John Ring—are former Republican appointees to the NLRB, the very agency they are now arguing is unconstitutional. Amazon, Trader Joe’s, and Starbucks have raised the same arguments in legal proceedings against their companies. Whether Starbucks continues this challenge in light of the recent agreement with Starbucks Workers United has not yet been reported.

By any measure, these long-rejected legal arguments should fail. But in the meantime, an already underfunded agency has to spend scarce resources to defend itself from these attacks, diverting resources away from protecting workers’ organizing rights at a time when those rights need protecting more than ever, given the surge in worker organizing. And, furthermore, the companies have shifted some of the media’s focus away from their lawbreaking to esoteric legal arguments about the agency that is prosecuting them for blocking their workers’ ability to organize and win a collective bargaining agreement with their employer. 

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Job Openings and Labor Turnover Survey: Labor market remains strong—but not hot https://www.epi.org/blog/job-openings-and-labor-turnover-survey-labor-market-remains-strong-but-not-hot/ Wed, 06 Mar 2024 15:44:36 +0000 https://www.epi.org/?post_type=blog&p=280371 Below, EPI senior economist Elise Gould offers her insights on today’s release of the Job Openings and Labor Turnover Survey (JOLTS) for January. Read the full thread here.

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Immigrants are not hurting U.S.-born workers: Six facts to set the record straight https://www.epi.org/blog/immigrants-are-not-hurting-u-s-born-workers-six-facts-to-set-the-record-straight/ Tue, 20 Feb 2024 17:02:28 +0000 https://www.epi.org/?post_type=blog&p=279549 The immigrant share of the labor force reached a record high of 18.6% in 2023, according to our analysis of Current Population Survey (CPS) data from the Bureau of Labor Statistics.1 Anti-immigration advocates have been out in full force, using this as a talking point for deeply misguided commentary and analysis that roughly translates to “immigrants are taking all our jobs.” 

The reality is that the economy does not have a fixed number of jobs, and what we see today is a growing economy that is adding jobs for both immigrants and U.S.-born workers. Here are six key facts that show immigrants are not hurting the employment outcomes of U.S.-born workers.

  1. The unemployment rate for U.S.-born workers averaged 3.6% in 2023, the lowest rate on record. Obviously, immigration is not causing high unemployment among U.S.-born workers.
  2. The share of prime-age U.S.-born individuals with a job is at its highest rate in more than two decades. In 2023, the prime-age (ages 25–54) employment-to-population ratio (EPOP) for U.S.-born individuals was 81.4%, up from 80.7% in 2019 and now at its highest rate since 2001.2, 3
  3. The prime-age labor force participation rate (LFPR) for U.S.-born individuals is also at its highest rate in more than two decades. In 2023, the LFPR for prime-age U.S.-born individuals was 83.9%, up from 83.3% in 2019 and now at its highest rate since 2002. Further, the increase in the U.S.-born prime-age LFPR over the last year was the second highest on record—below only the increase that occurred the year before last.4, 5
  4. The prime-age LFPR of U.S.-born men without a bachelor’s degree grew at a record pace in each of the last two years and is above its pre-COVID trend. We focus here on prime-age men without a bachelor’s degree because though the immigrant population is comprised of men and women of all education levels, immigrants are somewhat disproportionately concentrated among men without a college degree (in 2023, the immigrant share of the overall labor force was 18.6%, but it was 20.0% of men without a college degree). That means that if recent immigration were affecting labor market outcomes of U.S.-born workers, it would be more easily detected among workers in this group. However, the LFPR of these workers is also beating expectations. It is clear the labor market is both absorbing immigrants and generating strong job opportunities for U.S.-born workers, including those in demographic groups potentially most impacted by immigration. 6, 7
  5. Though the immigrant share of the labor force reached a record high in 2023, immigrant labor force growth is not occurring at an unprecedented rate. From 2019 to 2023, the immigrant labor force grew 2.3% annually on average, according to our analysis of CPS data. That is strong growth, but it’s roughly one-third the rate the economy experienced between 1996 and 2000 (which, just like 2022 and 2023, was a period of very low unemployment—and strong employment growth—for U.S.-born workers). Immigrant inflows into the labor force over the last year alone were also not unprecedentedly high—for example, the pace was slower than in 2022 and slower than three of the years from 1996–2000.
  6. Immigrants are an integral part of our labor market, filling gaps caused by demographic changes in the United States and contributing to strong economic growth. The immigrants that make up 18.6% of the U.S. labor force are playing key roles in numerous industries and are employed in a mix of lower, middle, and higher-wage jobs. And as the Congressional Budget Office recently reported, immigration is contributing to strong economic growth—with future immigration forecasted to boost real gross domestic product by 2% over the next 10 years—as well as increasing government revenue. Immigrants are also complementing U.S.-born workers by contributing to overall population and workforce growth. The U.S. Census Bureau projects that if the U.S. were to have lower-than-expected immigration levels, the population would begin to decline in 20 years, and if there were suddenly zero immigration, the population would begin to decline next year, deeply harming economic growth.  

As these six facts show, the idea that immigrants are making things worse for U.S.-born workers is wrong. The reality is that the labor market is absorbing immigrants at a rapid pace, while simultaneously maintaining record-low unemployment for U.S.-born workers.

Claiming that immigrants are making things worse for U.S.-born workers is often used as an intentional distraction from dynamics that are actually hurting working people—such as weak labor standards and enforcement, anti-worker deregulation, weak labor law that fails to protect workers’ rights to unions and collective bargaining in the face of coordinated and well-funded attacks, and other dynamics that result in too much power in the hands of corporations and employers.

While there’s no question that the immigration system desperately needs updating so that workers are adequately protected, it’s important to remember that it is employers that underpay and exploit workers based on their immigration status—committing workplace violations against those who lack status at a vastly higher rate than U.S.-born workers. And it is employers that regularly and even systematically steal wages from workers who only have a temporary, precarious status provided by a work visa. The resulting two-tiered system of rights in the workplace prevents immigrants from asserting and enforcing their rights. Reform efforts in Congress and the executive branch should thus focus on providing status and work authorization to those who lack it and compelling employers to follow the law, rather than more funding for, and draconian measures on, border enforcement, deportations, and detaining immigrants.

If those who mischaracterize immigration as bad for the economy and for U.S.-born workers really care about improving wages and working conditions for U.S.-born workers, they should focus on pushing for labor law reform and strong labor standards and helping ensure that all workers—regardless of immigration status—have equal and enforceable rights in the workplace.

Notes

1. Some data notes: We use full-year CPS data throughout this piece because breakdowns by immigration status aren’t available on a seasonally adjusted basis. Also, breakdowns by immigration status are only available since 1994 in the CPS, so any time we talk about records in this piece, we mean since 1994.

2. While the overall U.S.-born EPOP grew substantially in each of the last three years, it is still below its pre-COVID level. However, the fact that it has not attained its pre-COVID level is not about immigration, it’s largely about retiring baby boomers. Remember, the overall EPOP considers everyone age 16 and over, so when a large group of workers—like the baby boomers—hits retirement age, the EPOP “mechanically” drops. A common way to side-step this issue and to focus on trends that are actually related to the strength of job opportunities is to look only at so-called prime-age workers, workers ages 25–54, as we have done.  

3. These findings hold if we restrict to data from the fourth quarter in every year.  The prime-age EPOP of US-born workers was 81.6% in 2023Q4, up from 81.3% in 2019Q4 and now at its highest levels since 2000.

4. As with the EPOP, the overall LFPR for U.S.-born workers, though increasing at a record pace in the last two years, remains below its 2019 level—but again, that is not about immigration, it’s about retiring baby boomers.

5. These findings hold if we restrict to data from the fourth quarter in every year.  The prime-age LFPR of US-born people was 84.1% in 2023Q4, up from 83.8% in 2019Q4 and now at its highest level since 2002.

6. Details on the trend analysis: Due in large part to slack labor markets for much of the period (resulting from fiscal and monetary policy failures) and the erosion of job quality as a result of the dynamics mentioned in the conclusion of this piece, the LFPR of this group has been steadily declining in recent decades. Between the business cycle peaks of 2000 and 2019, the LFPR of this group declined from 89.4% to 84.9%, a decline of 0.24 percentage points per year, on average. If that trend had continued from 2019 to 2023, the LFPR of this group would have been 83.9% in 2023 instead of what it was, 84.5%. In other words, this group is beating expectations.

7. These findings hold if we restrict to data from the fourth quarter in every year.  The prime-age LFPR of US-born men without a college degree has risen strongly in each of the last three years and is above its pre-COVID trend.

 

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Data show anti-union ‘right-to-work’ laws damage state economies: As Michigan’s repeal takes effect, New Hampshire should continue to reject ‘right-to-work’ legislation https://www.epi.org/blog/data-show-anti-union-right-to-work-laws-damage-state-economies-as-michigans-repeal-takes-effect-new-hampshire-should-continue-to-reject-right-to-work-legislation/ Tue, 13 Feb 2024 20:56:21 +0000 https://www.epi.org/?post_type=blog&p=279330

Key findings:

  • Data show that states with so-called “right-to-work” (RTW) laws have lower unionization rates, wages, and benefits compared with non-RTW states.
  • On average, workers in RTW states are paid 3.2% less than workers with similar characteristics in non-RTW states, which translates to $1,670 less per year for a full-time worker.
  • Claims that weakening unions will lead to state job growth have proven inaccurate. There are no measurable employment advantages between RTW and non-RTW states.

This week, Michigan’s 2023 repeal of a so-called “right-to-work” (RTW) law takes effect. Meanwhile, New Hampshire’s state legislature is once again debating a RTW bill at a moment when it could not be clearer that RTW laws damage states’ economies by accelerating income inequality and reducing job quality, without delivering any job growth.  

RTW laws—and the phrase “right to work” itself—are intended to deceive and confuse. The misleadingly named policy is designed to make it more difficult for workers to form and sustain unions and negotiate collectively for better wages, benefits, and working conditions.

As Martin Luther King, Jr. pointed out in 1961, “right to work” is a “false slogan” since RTW laws provide neither rights nor work and are in fact designed “to rob us of our civil rights and job rights [and] to destroy labor unions and the freedom of collective bargaining by which unions have improved wages and working conditions of everyone.” Decades later, research bears out King’s contention that “wherever these laws have been passed, wages are lower.”

RTW laws are historically rooted in racism and designed to maintain unequal power. When private-sector workers first gained legal protection to unionize following passage of the federal National Labor Relations Act in 1935, unionization rates grew quickly. In response, opponents waged anti-union, explicitly white supremacist campaigns to limit worker power and maintain Jim Crow labor relations. These campaigns pursued state legislation as a means to constrain workers’ newly won federal union rights via RTW policies, and especially to block multiracial union organizing. RTW laws have since spread to 27 states and continue to generate economic outcomes that disadvantage all workers.

Figure A shows that Southern and Western states adopted the majority of RTW laws in the mid-twentieth century. But since 2010, five additional states with historically above average unionization rates—Indiana, Kentucky, Michigan, West Virginia, and Wisconsin—adopted RTW laws, newly limiting workers’ collective bargaining rights in those states. Michigan became the first of these states to repeal its RTW law.

Figure A
Figure A

Right-wing groups similarly targeted New Hampshire for passage of RTW in 2011, when then-Governor John Lynch vetoed a RTW bill passed by the legislature. New Hampshire has since remained a perennial target for anti-union proposals, with RTW bills rejected at least seven times since 2010. Most recently, the New Hampshire House voted down a 2021 RTW proposal.

No New England state has a RTW law, and repeated defeats of RTW have demonstrated its persistent unpopularity among New Hampshire voters and legislators across party lines. Moreover, RTW has faced three consecutive rejections in other states: Michigan repealing RTW in 2023, Illinois voters approving a constitutional Workers’ Rights Amendment (which bans future RTW laws) in 2022, and Missouri voters overwhelmingly rejecting their legislature’s attempt to impose RTW restrictions in 2018.  

Nonetheless, in 2024, some well-funded, out-of-state anti-union groups continue to demonstrate relentless interest in using state legislatures as vehicles to attack workers’ rights, and RTW was one of the first bills introduced by House Republicans in New Hampshire’s legislative session.

Below, we share the latest data assessing the economic impacts of RTW laws, including in the five states where the law was most recently adopted, illustrating why New Hampshire has been right to repeatedly reject RTW and why lawmakers should do so again in 2024.

So-called “right-to-work” laws constrain workers’ collective bargaining rights, resulting in lower wages and benefits for all workers 

RTW laws are designed to diminish workers’ collective power by prohibiting unions and employers from negotiating union security agreements into collective bargaining agreements, making it harder for workers to form, join, and sustain unions. As a result, states with RTW laws generally have lower unionization rates than non-RTW states. Private-sector workers in RTW states are less likely to be covered by a union contract than peers in non-RTW states, even after controlling for other factors that can be related to unionization (such as industry, occupation, education, age, gender, race, ethnicity, and foreign-born status). 

Consequently, workers in states with RTW laws have lower wages, reduced access to health and retirement benefits, and higher workplace fatality rates. On average, workers in RTW states are paid 3.2% less than workers with similar characteristics in non-RTW states, which translates to $1,670 less per year for a full-time worker.1

Figure B illustrates that unionized workers are 64% more likely to have employment-provided health insurance and 63% more likely to have employment-provided retirement benefits than their non-union counterparts. About 80% of union workers have employer-provided health and retirement benefits compared with only about half of non-union workers.  

Figure B
Figure B

By weakening unions, “right-to-work” laws fuel economic inequality

State policies like RTW that constrain workers’ rights to unionize and collectively bargain are fundamentally linked to key economic and labor market outcomes—including measures of inequality. Data show that unions reduce income inequality across the economy, counteract racial and gender labor market inequities, and reduce public-sector pay gaps

Through bringing workers’ collective power to the bargaining table, unions are able to win better wages and benefits for working people—reducing income inequality as a result. As shown in Figure C, there was less income inequality in decades when union density was higher. But as unionization rates declined—particularly after 1979—income inequality grew.

The erosion of collective bargaining over the last five decades has suppressed workers’ wages. Median wages would be 7.9% higher if unionization hadn’t declined between 1979 and 2017. This translates into over $3,900 annually in lost wages for a full-time worker.2

Figure C
Figure C

Figure D shows changes in unionization rates broken down by RTW status, differentiating between states that adopted RTW either before or after 2010. Unionization has declined far more sharply in the states that adopted RTW most recently, falling 3.8 percentage points between 2010 and 2023. But unionization rates remain lowest in states that have long had RTW laws in place. Overall, unionization rates were 5.0% in states that had adopted RTW prior to 2010, 9.7% in states that adopted RTW after 2010, and 14.3% in non-RTW states.

In New Hampshire, union membership held fairly steady during this period, dropping only 0.9 percentage points between 2010 and 2023. The New Hampshire unionization rate was 9.3% in 2023, just below the national average of 10.0%. If New Hampshire adopted RTW, they could expect to risk similarly accelerating declines in union membership and increasing income inequality.

Figure D
Figure D

“Right-to-work” laws erode job quality without creating job growth

Despite persistent claims from RTW proponents that weakening unions will lead to state job growth, comparisons of RTW and non-RTW states over decades show no relationship between employment levels and RTW laws. Figure E illustrates the prime-age employment-to-population ratio—the share of the population ages 25–54 with a job—has no clear differences among three sets of states: those that have remained non-RTW, those that adopted RTW before 2010, and those that adopted RTW after 2010. Employment trends across all sets of states reflect fluctuations within business cycles; recessions are shaded in grey. There are no measurable employment advantages between RTW and non-RTW states.

Figure E
Figure E

Prior studies have likewise shown no causal link between a state’s RTW status and its job growth. For example, studies of Oklahoma after the state enacted RTW in 2001 found a significant reduction in private-sector unionization, but no measurable effect on employment growth. Similarly, researchers at the University of Kentucky examined state economic performance across Southern U.S. states from 1964 to 2004 and found that RTW status had no relationship to state economic outcomes. When studies have claimed to find such effects, it is often due to failure to control for other critical factors, such as education levels of the workforce, proximity to transportation hubs, technological advances, or natural resources.

New Hampshire should continue to reject RTW and the economic damage it inflicts on states

At a moment of historic inequality and record corporate profits, it is no surprise we are also seeing historically high levels of approval for unions. Workers are looking to unions as critical vehicles for fixing what’s broken at work and in our wildly unequal economy. The large gap between the share of workers who want a union and the share of workers who are in a union underscores that our weak federal labor laws, which are further undermined by RTW measures in over half of U.S. states, are not working. Because state RTW laws diminish workers’ rights, weaken unions, and further concentrate corporate power, they are the opposite of what states need to address chronic economic problems of widening inequality and eroding job quality.

Fundamental reform of our labor laws is required to rebuild an economy that guarantees all workers the freedom to unionize and collectively bargain, and no longer leaves most workers behind. At the state level, this reform must include repeal of existing RTW laws across the country, and continued rejection of new RTW proposals in states like New Hampshire.

Notes

1. This difference is based on a regression model which accounts for demographic differences (e.g. gender, age, marital status, race/ethnicity, and education), individual labor market controls (e.g. full-time status, hourly status, union status, occupation, and industry), state-level labor market controls (e.g. unemployment rate), and three measures that account for differences in the cost of living between RTW and non-RTW states. The 3.2% difference in average wages is applied to an average wage of $23.98.

2. Here, we are extrapolating from 2017 applying the 7.9% difference to the median hourly wage of $23.98 in 2023. For a full-time worker, this yields a difference of $3,940 per year. Further, this is likely a lower bound given the continued decline in unionization of 0.8 percentage points since 2017.

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Child labor remains a key state legislative issue in 2024: State lawmakers must seize opportunities to strengthen standards, resist ongoing attacks on child labor laws https://www.epi.org/blog/child-labor-remains-a-key-state-legislative-issue-in-2024-state-lawmakers-must-seize-opportunities-to-strengthen-standards-resist-ongoing-attacks-on-child-labor-laws/ Wed, 07 Feb 2024 17:35:00 +0000 https://www.epi.org/?post_type=blog&p=278948 Click here for the latest version of our 50-state maps showing legislation to roll back or strengthen child labor protections.

Child labor remains a top issue in 2024 state legislative sessions amid soaring violations and widespread abuse of child labor laws in multiple sectors of the economy. On one hand, the coordinated, industry-backed effort to roll back child labor protections state by state has continued to expand. At the same time, some state legislators are proposing legislation to strengthen the rights of young workers and the laws designed to safeguard their health and education.

Since 2021, 28 states have introduced bills to weaken child labor laws, and 12 states have enacted them. By contrast, 14 states have introduced bills to strengthen child labor protections already in 2024—up from 11 states in all of 2023—as more state lawmakers recognize the need to address increasing violations and threats to current state and federal standards.

Attacks on child labor laws continue trend of weakening important state standards, with eventual goal of diminishing federal child labor laws 

From the 1800s onward, states have often led the way on child labor regulation. Today, many important policy tools for preventing exploitative forms of child labor—such as work permit requirements for young teens and hours standards for older teens—remain under state purview because the federal 1938 Fair Labor Standards Act (FLSA) has never been amended to include them. Many recent proposals to weaken child labor standards appear designed to eliminate any state standard that exceeds the FLSA, or even create state standards lower than or in contradiction to federal standards. This is an intentional tactic to generate pressure for subsequently lowering federal standards, reflecting long-standing interests of some industry groups.

In January 2024 alone, eight states introduced or took new actions on bills to roll back child labor protections (see Figure A). For example:

  • Florida lawmakers are debating a bill (recently passed by the House) that would eliminate long-standing state guidelines on work hours for teens, allowing employers to schedule 16- and 17-year-olds for unlimited hours—including during the school year—and eliminate meal or rest breaks.
  • Kentucky lawmakers introduced a bill to allow nonprofits to hire 12- and 13-year-olds (federal law prohibits most non-agricultural employment for children under 14), and a bill to prohibit the state’s labor commissioner from setting standards on child labor that exceed minimum protections under the FLSA, effectively repealing state standards that require meal and rest breaks for minor workers and that limit work hours for 16- and 17-year-olds.
  • Two other states—Indiana and New Jersey—have also introduced bills to extend the number of hours minors can be scheduled to work, either during the summer or year-round.
  • Two states—Missouri and West Virginia—have introduced new bills to eliminate youth work permits, and a Georgia bill introduced in 2023 and recommitted in 2024 would also eliminate youth work permits and allow 14-year-olds to do landscaping work on the grounds of workplaces where they are otherwise prohibited from working (like factories and mills).
Figure A
Figure A

Three more states are considering proposals allowing employers to hire children for hazardous jobs, in possible violation of federal standards

In 2023, at least five states—Georgia, Illinois, Iowa, Minnesota, and New York—introduced legislation to expand youth employment in hazardous occupations or workplaces. The Iowa bill, which was enacted, expanded hazardous employment for children as young as 14—in violation of federal law. The bill also set up a “work-based learning” program under which 16-year-olds can perform hazardous work like roofing and demolition that is generally prohibited under federal law for anyone younger than 18.

In January 2024, three more states—Florida, Indiana, and West Virginia—introduced bills to weaken protections against hazardous work that may violate federal standards, often under the guise of expanding teen access to “career education.” For example:           

  • In Florida, a “career and technical education” bill would have allowed employers to hire 16- and 17-year-olds for work in roofing, in violation of federal orders that prohibit work in occupations known to be particularly dangerous for young workers. Upon mounting opposition spurred by sustained organizing by in-state advocates, the bill has so far been amended to allow an exemption from hazardous work protections only in residential building construction. However, teens are at risk for high rates of injury or fatality on any construction site, and in its current form the bill likely still risks violating federal law.
  • A bill in Indiana proposed allowing 16- and 17-year-olds enrolled in “work-based learning programs” to perform particularly hazardous work that is prohibited for minors under federal law, adopting similar language as Iowa’s law enacted in 2023. The bill also proposed establishing complete employer immunity from civil liability in the event of workplace injuries or fatalities of youth enrolled in such programs (again adopting language that was proposed in an early version of 2023 legislation in Iowa), meaning the families of children injured or killed on the job would have no recourse to seek damages. And the bill also proposed allowing employers to schedule 14- and 15-year-olds for later evening shifts and longer workweeks during the school year—in violation of federal law. However, after advocates sounded the alarm about the dangers of these provisions, they were eliminated from the bill. The bill still includes a provision to lower the age to serve alcohol and a last-minute amendment will create a 10-minute grace period before civil penalties can be assessed for violations. The Senate passed the bill on February 6.

Iowa is considering further dangerous child labor rollbacks

Iowa lawmakers have introduced a bill to weaken standards related to child-to-staff ratios at child care centers, expanding even further on a 2022 law that allowed child care centers to assign teen workers sole responsibility for more toddlers. The new House bill would allow 16-year-olds to care for four infants, or seven toddlers, or 10 three-year-olds without direct supervision. Iowa also introduced a bill to allow minors as young as 14 to obtain a special driver’s license to drive up to 25 miles to or from work without an adult in the vehicle, despite data showing the importance of graduated driving license programs and despite Iowa having the highest share of young driver fatalities in 2020.

Fourteen states are considering measures to strengthen weak and outdated child labor laws

In response to effective organizing by in-state advocates, proposals to strengthen child labor protections are gaining momentum. Fourteen states have introduced proactive child labor bills so far in 2024, up from 11 states in 2023 (see Figure B).

  • Four states have introduced bills requiring high school students to be educated about their workplace rights (Illinois, Maryland, New York, Rhode Island).
  • Four states have introduced bills to strengthen enforcement of child labor laws (Colorado, Iowa, Nebraska, Virginia).
  • Two states have introduced bills to eliminate provisions in state law that allow certain minors to be paid below the minimum wage (New Jersey, Rhode Island).
  • Six states have introduced bills to safeguard the rights of child performers or mandate that child influencers receive a share of the profits made from monetized social media content featuring them or using their likeness (Arizona, California, Georgia, Missouri, Nebraska, Ohio).
Figure B
Figure B

Proactive proposals to strengthen enforcement include increasing civil and criminal penalties, establishing enhanced workers’ compensation and other legal remedies for children injured while employed illegally, bolstering state labor department authority, incentivizing reporting, and strengthening violation disclosure requirements. For example, a comprehensive new bill in Colorado proposes to:

  • deter violations of the law by increasing civil penalties and depositing them into a fund for wage theft enforcement;
  • incentivize reporting by creating anti-retaliation protections and removing criminal liability for parents and guardians who allow their child to work in violation of the law; and
  • enhance transparency by requiring the state to release information about violations to the public.

These proposals would build on legislation enacted last year in Colorado to allow the families of illegally employed children injured on the job to sue their employer for damages, expanding the legal remedies available to victims beyond the workers’ compensation system.

Federal laws set an important—but weak and increasingly outdated—floor for child labor standards. States continue to play essential roles in ensuring children who work can do so in safe, age-appropriate conditions that don’t jeopardize their long-term health, development, or education. To address the growing child labor crisis across the country, more state lawmakers in 2024 should take steps to guarantee strong labor standards, enforcement, and workers’ rights education for youth—policies that ensure children of all backgrounds can access positive first work experiences that lead to a lifetime of career success.

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A strong labor market continues into 2024 with 353,000 jobs added in January https://www.epi.org/blog/a-strong-labor-market-continues-into-2024-with-353000-jobs-added-in-january/ Fri, 02 Feb 2024 14:47:00 +0000 https://www.epi.org/?post_type=blog&p=278833 Below, EPI economists offer their insights on the jobs report released this morning, which showed 353,000 jobs added in January.

From EPI senior economist, Elise Gould (@eliselgould):

Read the full thread here.

 

 

From EPI president, Heidi Shierholz (@hshierholz):

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The soft bigotry of high expectations: To combat the Black-white school achievement gap, remedy persistent segregation, don’t hope for miracle teachers https://www.epi.org/blog/the-soft-bigotry-of-high-expectations-to-combat-the-black-white-school-achievement-gap-remedy-persistent-segregation-dont-hope-for-miracle-teachers/ Tue, 30 Jan 2024 20:43:29 +0000 https://www.epi.org/?post_type=blog&p=278649 Social psychologist Robert Rosenthal died at the age of 90 this month. He was best known for his 1968 book, Pygmalion in the Classroom, co-authored by Lenore Jacobson, an elementary school principal in South San Francisco.

No book in the second half of the 20th century did more, unintentionally perhaps, to undermine support for public education, and thus diminish educational opportunities for so many children, especially Black and Hispanic children, to this day. The book and its aftermath put the onus solely on teacher performance when it came to student achievement, disregarding so many critically important socioeconomic factors—at the top of the list, residential segregation.

How did it do that?

The book described an experiment conducted in Ms. Jacobson’s school in 1965. The authors gave pupils an IQ test and then randomly divided the test takers into two groups. They falsely told teachers that results showed that students in one of the groups were poised to dramatically raise their performance in the following year, while the others would not likely demonstrate similar improvement.

At the end of that year, they tested students again and found that the first and second graders in the group that was predicted to improve did so on average, while those in the other group did not. The book, as well as academic articles that Dr. Rosenthal and Ms. Jacobson published, claimed that the experiment showed that teacher expectations had a powerful influence on student achievement, especially of young children. Pupils whose teachers were told were more likely to improve then apparently worked harder to meet their teachers’ faith in them.1

Some psychologists were skeptical, believing that the experimental design was not sufficiently rigorous to support such a revolutionary conclusion. Even the reported results were ambiguous. Teacher expectations had no similar impact on children in grades three through six. Similar experiments elsewhere did not confirm the results even for first and second graders.2

Nonetheless, the book was very influential.

In the decades after Pygmalion, other studies examined teacher expectations. They showed that teachers have greater expectations of higher achieving students but couldn’t determine whether the teacher attitudes helped to cause better pupil performance. Perhaps teachers only developed those expectations after seeing that students were higher achieving.3 Only an experimental study, like Pygmalion, could establish causality, but contemporary ethical standards would often prohibit such experiments, requiring, as they must, lying to teachers about their students’ data.

Minority children in the South San Francisco school where Rosenthal and Jacobson experimented were Mexican-origin, not African American. Yet ignoring how scanty the evidence was, education policymakers concluded from their research that the Black-white gap in test scores at all grade levels resulted from teachers of Black children not expecting their pupils to do well. And that, they reasoned, should be an easy problem to solve—holding teachers accountable for results would force them to abandon the racial stereotypes that were keeping children behind.

The accountability movement grew in intensity during the Bill Clinton administration, while in Texas, Governor George W. Bush implemented a mandatory standardized testing program whose publicized results, he thought, would force teachers to improve by shaming them for the lower scores of their poorer Black and Hispanic pupils.

In 2000, Bush was elected president; his campaign promised to demolish teachers’ “soft bigotry of low expectations.” During his first year in office, he led a bipartisan congressional majority to adopt the “No Child Left Behind Act” that required every state to conduct annual standardized testing in reading and math for pupils in the third through eighth grades. 

Shortly after the bill was signed, I met with the congressional staffer who had been primarily responsible for writing the legislation. She predicted that within two years, the publication of test scores would so embarrass teachers that they would work harder, with the result that racial differences in academic achievement would evaporate entirely.

Nothing of that sort has happened. Although test performance of both Black and white students has improved somewhat, the gap is not much different than it was two decades ago. But the public reputation of our teaching force has continued to deteriorate, as a conclusion spread that failure to equalize test results could be remedied by gimmicks like naming a school’s classrooms for the Ivy League colleges that teachers expected their students to attend.4 

Enthusiasm for charter schools escalated from a belief that operators could choose teachers with higher expectations, yet charter schools have not done any better (and in many cases worse) in closing the gap, once the sector’s ability to select students less likely to fail (and expel students who do) is taken into account.5

In 2008, I taught an education policy course for master’s degree candidates, many of whom had taught for two years in the Teach for America (TFA) program. It placed recent college graduates without teacher credentials in schools for lower-income Black and Hispanic students. Funded heavily by private philanthropies, TFA embraced the low-expectations theory of below-average performance. Prior to their teaching assignments, TFA corps members were required to attend a summer institute whose curriculum featured a unit entitled “The Power of My Own Expectations” and required them to embrace the “mindset” of “I am totally responsible for the academic achievement of my students.”

None of my master’s degree students claimed that in their two years of teaching, their high expectations actually produced unusually high achievement. But most were so immunized against evidence and experience that they enrolled in a graduate program with the intention of creating new charter schools infused with high expectations. Only a few wondered what had gone wrong with their theory, besides having goals that still weren’t high enough.

Certainly, there are teachers with low expectations and harmful racial stereotypes, and it would be beneficial if those who can’t be trained to improve were removed from the profession. But I’ve visited many schools serving disadvantaged students. Most teachers I observed, white and Black, were dedicated, hard-working, engaged with their students, and frustrated about the social and economic challenges with which children daily came to school. I don’t claim that my observations were representative; I was more likely to be invited to visit schools that took great pride in their efforts, despite conditions they struggled to overcome.

No matter how high their expectations, teachers can’t do much about:

  • their pupils’ higher rates of lead poisoning that impact cognitive ability;
  • more frequent asthma—the result of living with more pollution, near industrial facilities, in less-well maintained buildings with more vermin in the environment—that may bring them to school drowsy from being awake at night, wheezing;
  • neighborhoods without supermarkets that sell fresh and healthy food;
  • stress intensified by being stopped and frisked by police without cause, and a discriminatory criminal justice system that disproportionately imprisons their fathers and brothers for trivial offenses;
  • frequent moves due to rising rents, or landlords’ failure to keep units in habitable condition;6
  • absenteeism from a need to stay home to care for younger siblings while parents race from one low-wage job to another;
  • poor health from living in neighborhoods with fewer primary care physicians or dentists;
  • lower parental education levels that result in less academic support at home, combined with less adequate access to technology, a problem exacerbated since the pandemic;7
  • and many other socioeconomic impediments to learning.8

Not every Black child suffers from these deprivations that affect their ability to take full advantage of the education that schools offer. But many do. Concentrating disadvantaged pupils in poorly resourced schools in poorly resourced and segregated neighborhoods overwhelms instructional and support staffs.

Such realities contributed to my conclusion that residential segregation, not low teacher expectations, was the most serious problem faced by U.S. education. It is what led to my recent books, The Color of Law, and its sequel (co-authored by my daughter, Leah Rothstein), Just Action; How to challenge segregation enacted under the Color of Law.

Robert Rosenthal’s Pygmalion theory set the stage for a national willingness to deny educational disparities’ true causes: the unconstitutional and unlawful public policies that imposed racial segregation upon our nation.

Endnotes

1. Robert Rosenthal and Lenore Jacobson. 1968. Pygmalion in the Classroom: teacher expectation and pupils’ intellectual development. (New York: Holt, Rinehart, and Winston). For a technical summary by the authors, see. Rosenthal and Jacobson, “Pygmalion in the Classroom.” The Urban Review 3, September, 1968: 16-20.

2. See “Pygmalion in the Classroom.” The Urban Review 3, September, 1968, footnote on p. 19.

3. For example, see Thomas L. Good, Natasha Sterzinger, and Alyson Lavigne. 2018. “Expectation Effects: Pygmalion and the initial 20 years of research.” Educational Research and Evaluation 24 (3-5): 99-123.

4. See, for example, Richard Rothstein. 2010. “An overemphasis on teachers.” Commentary, Economic Policy Institute, October 18.  https://www.epi.org/publication/an_overemphasis_on_teachers/

5. Martin Carnoy, et al. 2005. The Charter School Dust-Up. (Washington, D.C.: The Economic Policy Institute), https://www.epi.org/publication/book_charter_school/

6. For example, see “Housing is now unaffordable for a record half of all U.S. renters, study finds.” NPR, January 25. https://www.npr.org/2024/01/25/1225957874/housing-unaffordable-for-record-half-all-u-s-renters-study-finds

7. In early 2020, I wrote that the pandemic would widen the achievement gap. The consequences turned out to be worse than I could have imagined. Teacher expectations had nothing to do with it. Richard Rothstein. 2020. “The Coronavirus Will Explode Achievement Gaps in Education.” Shelterforce.org, April 13. https://shelterforce.org/2020/04/13/the-coronavirus-will-explode-achievement-gaps-in-education/

8. Richard Rothstein. 2004. Class and Schools. Using social, economic, and educational reform to close the black–white achievement gap. (Washington, D.C.: The Economic Policy Institute), https://www.epi.org/publication/books_class_and_schools/

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