Newly available data from the Bureau of Labor Statistics’ Employer Costs for Employee Compensation data allows an update of the trends of worker bonuses through September 2018, to gauge the impact of the GOP’s Tax Cuts and Jobs Act of 2017. The tax cutters claimed that their bill would raise the wages of rank-and-file workers, with congressional Republicans and members of the Trump administration promising raises of many thousands of dollars within ten years. The Trump administration’s chair of the Council of Economic Advisers argued in April that we were already seeing the positive wage impact of the tax cuts:

A flurry of corporate announcements provide further evidence of tax reform’s positive impact on wages. As of April 8, nearly 500 American employers have announced bonuses or pay increases, affecting more than 5.5 million American workers.

Following the bill’s passage, a number of corporations made conveniently-timed announcements that their workers would be getting raises or bonuses (some of which were in the works well before the tax cuts passed). But as Josh Bivens and Hunter Blair have shown there are many reasons to be skeptical of the claim that the TCJA, particularly corporate tax cuts, will produce significant wage gains.

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The federal Break Time for Nursing Mothers provision of the Fair Labor Standards Act (FLSA) requires employers to provide reasonable unpaid break time, as needed, for an employee to express breast milk for her nursing child for one year after the child’s birth.  Further, employers are required to provide a place for the employee to express milk—other than a bathroom—that is shielded from view and free from intrusion from coworkers and the public. These requirements were signed into law in 2010 as part of the Affordable Care Act and were a landmark step toward securing pumping accommodations for countless nursing mothers in the workplace.

These provisions were designed to prevent harmful outcomes that can occur without basic workplace accommodations for expressing breast milk, such as negative health consequences, the inability to breastfeed, and economic harm including job loss (documented in the upcoming report Exposed: Discrimination Against Breastfeeding Workers from the Center for WorkLife Law). However, the law has several significant problems that leave nursing mothers at risk. One key issue is that due to where these provisions are placed in the FLSA—in the section that requires employers to pay overtime compensation if an employee works more than 40 hours in a week—all those workers who are exempt (i.e. excluded) from the overtime protections of the FLSA are also exempt from the break time protections for nursing mothers. These exemptions affect roughly one out of every four working women of childbearing age (between the ages of 16 and 44).  There are a total of 37.8 million working women of childbearing age in the United States, and more than 9 million of them are excluded from the Break Time for Nursing Mothers protections.  That includes more than 1 million black women, 976,000 Hispanic women, 825,000 Asian women, more than 6 million white women, and 185,000 women of other races.  The below table shows further breakdowns by state and industry.

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Last term, the Supreme Court dealt a significant blow to the fundamental right of workers in this country to join together to address workplace disputes. In Epic Systems v. Lewis, the Court, by a 5-4 majority, held that an employer may lawfully require its employees to agree, as a condition of employment, to resolve all workplace disputes on an individual basis in arbitration. Siding with employers and the Trump administration, the Court’s decision paves the way for the majority of workers in this country to be forced to sign away their right to pursue workplace disputes on a collective or class basis. Available data suggests that, unless Congress acts, more than 80 percent of workplaces will subject their workers to mandatory arbitration with class and collective action waivers within six years.

Mandatory arbitration clauses rob workers of their right to take their employer to court for all types of employment-related claims, forcing workers into a process that overwhelmingly favors employers. Class and collective action waivers go one step further, forcing workers to manage this process alone, even though these issues are rarely confined to one single worker.

Workers depend on collective and class actions to enforce many workplace rights. Employment class actions have helped to combat race and sex discrimination and are fundamental to the enforcement of wage and hour standards. Without the ability to aggregate claims, it is very difficult, if not impossible, for workers to find legal representation in these matters. This is particularly true for low-wage workers, whose cases are unlikely to involve large enough awards to attract attorneys to invest time in the case. Class and collective action suits allow workers to pool their claims, making it possible for an attorney to earn enough to make the case worth pursuing.

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For the first time in nearly a decade, Democrats will hold the majority in the House when Congress convenes in January. The results of yesterday’s election are encouraging and represent historic progress—with a record number of women winning seats in the house, including key victories by diverse candidates across faiths and ethnicities. And importantly, Democrats won the popular vote in the House by a 9.2 percent margin despite today’s 3.7 percent unemployment rate, which should have provide great advantage to the incumbent party.

It is nevertheless important to note that with Republicans in control of the Senate and the White House, it is unlikely that policies that promote a just economy for working people will become law. Still, House Democrats have the opportunity to advance long overdue reforms. It is critical that they focus on an agenda that serves our nation’s workers. This must include House Democrats working to raise workers’ wages, restore workers’ access to justice on the job, and promote workers’ right to collectively bargain.

Workers deserve a fair minimum wage. At $7.25 per hour, the federal minimum wage is now more than 25 percent below where it was in real terms half a century ago. House Democrats must advance legislation to raise the federal minimum wage to $15 per hour by 2024, indexing it to the national median wage thereafter, and phasing out the tipped minimum wage and other subminimum wages. Given inflation expectations, $15 in 2024 would be around $13.00 in 2018 dollars, an appropriate level for the federal floor. The Raise the Wage Act introduced this Congress included all of these reforms. The House must work to pass similar legislation in the new Congress.

Workers should not be forced to sign away their rights as a condition of employment. The use of mandatory arbitration and collective and class action waivers—under which workers are forced to handle workplace disputes as individuals through arbitration, rather than being able to resolve these matters together in court—makes it more difficult for workers to enforce their rights. These agreements bar access to the courts for all types of employment-related claims, including those based on the Fair Labor Standards Act, Title VII of the Civil Rights Act, and the Family Medical Leave Act. This means that a worker who is not paid fairly, discriminated against, or sexually harassed, is forced into a process that overwhelmingly favors the employer—and forced to manage this process alone, even though these issues are rarely confined to one single worker. Congress must act to ban mandatory arbitration agreements and class and collective action waivers. The Restoring Justice for Workers Act introduced this Congress includes all of these reforms. The House should work to pass this important reform in the new Congress.

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In yesterday’s election, voters in Missouri and Arkansas gave overwhelming approval to ballot measures that will raise their state’s minimum wage over the next several years, lifting pay for a combined 1 million workers. In Missouri, 62 percent of voters elected to raise the state minimum wage from its current $7.85 to $12 an hour in 2023. In Arkansas, 68 percent of voters supported a measure that will raise the state minimum wage to $11 per hour in 2021 from its current value of $8.50.

The increase in Arkansas will raise pay for an estimated 300,000 workers (about a quarter of the state’s wage-earning workforce). The Missouri increase will lift pay for 677,000 workers (also about a quarter of wage-earners in the state.) In both cases, the majority of workers who will get a raise are women, most work full time, and they come from families with modest incomes. Analyses of the measures estimate that the raise in Arkansas will put over $400 million into the pockets of low-wage workers there over the course of the increases. In Missouri, low-wage workers will receive nearly $870 million in additional wages over the course of the measure’s implementation.

In voting to raise their state minimum wages, voters in Arkansas and Missouri are making long-overdue corrections to policy failures that political leaders in those states, and at the federal level, should have fixed a long time ago. Raising the minimum wage in Arkansas to $11 by 2021 and $12 by 2023 in Missouri will bring the minimum wage in those states, in both cases, roughly back to where the federal minimum wage was in 1968, when it equaled roughly $10 an hour in today’s dollars. According to the Congressional Budget Office’s (CBO’s) projections for inflation, $11 in 2021 is $9.98 in 2017 dollars, $12 in 2023 is $10.40 in 2017 dollars.

Updating key labor standards, like the minimum wage, is critical if policymakers want to do something about the enormous stagnation in wages that has plagued the country for decades. The recent modest uptick in wage growth is not nearly enough to undo the damage that has been done over the past 70 years. Since the mid-1970s, as the U.S. economy has grown and productivity has risen, hourly pay has barely budged after adjusting for inflation. Since 1973, average labor productivity has grown 77 percent; yet hourly compensation for the typical U.S. worker—and this includes both wages and benefits, such as payments for healthcare premiums and retirement accounts—has grown only 12.4 percent. For low-wage workers, the trends are even worse.

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It’s been widely reported that going into this year’s elections, Republicans aren’t running on their signature tax law from last year—the Tax Cuts and Jobs Act (TCJA). It’s not difficult to see why. The TCJA is increasingly unpopular, and a recent GOP internal poll shows that respondents say the law benefits “large corporations and rich Americans” over “middle class families.”

Republicans shouldn’t find this so surprising—since the law they wrote was a massive giveaway to the rich and big corporations. And voters do not appear fooled by a PR campaign earlier this year where corporate allies tried to trick workers into believing that any bonus they received in 2017 was due to the TCJA.

The claims of immediate benefits to workers by those corporate allies should never have been taken so seriously by the media. The theory justifying claims that corporate rate cuts should trickle down to typical workers always required that a long chain of economic events to occur first. We’ve long pointed out that nearly every single link in this chain is likely to break down. The first link in this chain concerns firms’ investment; anyone trying to discern if the corporate rate cuts are having their promised effects for workers should be watching investment like a hawk.

The story here doesn’t look any better for proponents of the TCJA than it did in September. The quarterly growth rate in business investment cratered in the third quarter of the year, growing at a 0.8 percent annualized rate. The administration’s favorite data point, the year-over-year increase in real, private nonresidential fixed investment, slowed from 7.1 percent in the 2nd quarter of 2018 to 6.4 percent in the 3rd quarter. Charted below, the data still doesn’t show the clear boost to the trend of investment that would indicate a positive effect coming from the TCJA.

Figure A

No evidence that the TCJA has increased investment: Year-over-year change in real, nonresidential fixed investment, 2003Q1-2018Q3

date	NRFI
2003Q1	-2.3%
2003Q2	1.6%
2003Q3	4.0%
2003Q4	6.8%
2004Q1	5.2%
2004Q2	4.9%
2004Q3	5.7%
2004Q4	6.5%
2005Q1	9.2%
2005Q2	8.2%
2005Q3	7.4%
2005Q4	6.1%
2006Q1	8.0%
2006Q2	8.2%
2006Q3	7.8%
2006Q4	8.1%
2007Q1	6.5%
2007Q2	7.0%
2007Q3	6.8%
2007Q4	7.3%
2008Q1	5.8%
2008Q2	3.8%
2008Q3	0.2%
2008Q4	-7.0%
2009Q1	-14.4%
2009Q2	-17.1%
2009Q3	-16.1%
2009Q4	-10.3%
2010Q1	-2.3%
2010Q2	4.1%
2010Q3	7.5%
2010Q4	8.9%
2011Q1	8.0%
2011Q2	7.3%
2011Q3	9.3%
2011Q4	10.0%
2012Q1	12.9%
2012Q2	12.6%
2012Q3	7.2%
2012Q4	5.6%
2013Q1	4.3%
2013Q2	2.3%
2013Q3	4.4%
2013Q4	5.4%
2014Q1	5.4%
2014Q2	7.6%
2014Q3	8.0%
2014Q4	6.4%
2015Q1	4.5%
2015Q2	2.7%
2015Q3	0.8%
2015Q4	-0.7%
2016Q1	-0.5%
2016Q2	-0.1%
2016Q3	0.8%
2016Q4	1.8%
2017Q1	4.4%
2017Q2	5.3%
2017Q3	5.0%
2017Q4	6.3%
2018Q1	6.7%
2018Q2	7.1%
2018Q3	6.4%

 

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The data underlying the figure.

Source: EPI analysis of data from table 1.1.6 from the National Income and Product Accounts (NIPA) from the Bureau of Economic Analysis (BEA).

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November 1 is Latina Equal Pay Day, the day that marks how long into 2018 a Latina would have to work in order to be paid the same wages her white male counterpart was paid last year. That’s just over 10 months longer, meaning that Latina workers had to work all of 2017 and then this far—to November 1!—into 2018 to get paid the same as white non-Hispanic men did in 2017. Put another way, a Latina would have to be in the workforce for 55 years to earn what a non-Hispanic white man would earn after 30 years in the workforce. Unfortunately, Hispanic women are subject to a double pay gap—an ethnic pay gap and a gender pay gap.

The date November 1 is based on the finding that Hispanic women workers are paid 54 cents on the white non-Hispanic male dollar, using the 2016 March Current Population Survey for median annual earnings for full-time, year-round workers. We get similar results when we look at hourly wages for all workers (not just full-time workers) using the monthly Current Population Survey Outgoing Rotation Group for 2017—which show Hispanic women workers being paid 58 cents on the white male dollar.

This gap narrows—but not dramatically—when we control for education, years of experience, and location by regression-adjusting the differences between workers. Using this method, we find that, on average, Latina workers are paid only 66 cents on the dollar relative to white non-Hispanic men.

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Megyn Kelly is out at NBC after an uproar over her comments in defense of blackface Halloween costumes during an episode of her television show last week. NBC has canceled “Megyn Kelly Today” and Kelly will be negotiating an exit from her contract. Speculation that Kelly would get a full payout for her three-year, $69 million contract drew a bitter response from people on Twitter. “Congrats to Megyn Kelly for getting $69 million for thinking blackface is fine,” one person tweeted.

Kelly’s unfathomable severance package isn’t the only thing separating her from regular working people. She actually may have a say in her noncompete clause. According to The Hollywood Reporter, her legal representation is “attempting to keep her noncompete clause as short as possible. Six months is the standard in the television news industry.”

Nearly one in five U.S. workers are bound by noncompete agreements, which block them from working for a competitor for a set period of time if they leave their current job. That’s nearly 30 million people who have essentially lost their full right to leave their jobs. And it’s not just highly paid workers who are required to sign them—14.3 percent of workers without a four-year college degree and 13.5 percent of workers earning up to $40,000 a year have noncompetes.

Noncompetes are a big problem. If you are a typical worker and you are not in a union, one of the most important points of leverage you have to negotiate for a raise or fight back against abuse is the fact that you can quit and work somewhere else. A noncompete agreement weakens your power: you have to stay with your employer because you can’t seek or accept a better-paying job with a competitor.

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The Commerce Department released data today on the growth in gross domestic product (GDP—the widest measure of economic activity) in the 3rd quarter of 2018. It showed growth at a 3.5 percent rate in this quarter, down slightly from 4.2 percent growth in the second quarter of 2018. For comparison, in the run-up to the 2016 presidential elections, economic growth had barely averaged 2 percent since recovery from the Great Recession began in mid-2009.

White House economic adviser Larry Kudlow refers to this recent pick-up in growth as the “boom” of 2018. While Kudlow is always hyperbolic and almost always wrong, especially about “booms” (he pronounced in December 2007—the last month before the Great Recession—that “there’s no recession coming. The pessimistas were wrong. It’s not going to happen…. The Bush boom is alive and well.”), it remains worth asking: what is the basis of the faster growth so far in in 2018?

The answer is simple: a pronounced swing from fiscal austerity to fiscal stimulus, enacted by a Republican Congress that decided to help, rather than hurt, the economic recovery once it was being helmed by a Republican president. Yes, that sounds like a harsh and partisan judgement, but it’s the only rational reading of recent years’ evidence.

In the run-up to the 2016 elections, we documented clearly that that recovery from the Great Recession had been intentionally throttled by a historically large dose of austerity; specifically, historically slow growth in public spending. The main actors in imposing that austerity were Republicans in Congress, with some assists from Republican governors and state legislatures (think Sam Brownback from Kansas and Scott Walker from Wisconsin). The quick federal pivot to stimulus once the White House changed hands in 2017 makes the political roots of all this pretty clear.

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