Yesterday, the National Labor Relations Board (NLRB) filed its brief in NLRB v. Murphy Oil, which will be argued in the Supreme Court in October. The case will determine whether mandatory arbitration agreements with individual workers that prevent them from pursuing work-related claims collectively are prohibited by the National Labor Relations Act (NLRA). The brief makes clear what is at stake for workers if the Supreme Court were to rule against the NLRB in this matter.

The NLRA guarantees workers the right to stand together for “mutual aid and protection” when seeking to improve their wages and working conditions. Employer interference with this right is prohibited. However, increasingly, employers are requiring workers to sign arbitration agreements that force them to waive their rights to collective actions, and handle workplace disputes as individuals. In practice, that means that even if many workers faced the same type of dispute at work, each individual employee must hire their own lawyer, and must resolve their disputes out of court, behind closed doors, with only their employer and a private arbitrator. The NLRB has found these forced arbitration agreements interfere with workers’ right to engage in concerted activity for their mutual aid and protection, in violation of the NLRA.

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The conventional wisdom on corporate taxes holds that while the U.S. statutory rate of 35 percent is among the highest of our peer countries, widespread loopholes in the corporate tax system mean that the rate actually paid by U.S. corporations is far lower, and actually firmly in line with these international peers. And this is one of the times where the conventional wisdom is actually correct. Because of a lack of data, it’s hard to put an exact number on it, but it’s clear that the actual rate faced by U.S. corporations is far lower than the headline 35 percent rate.

But recently, some have been trying to refute this conventional wisdom by brandishing a recent Congressional Budget Office (CBO) report. Summary Table 1 in the report has led some to believe that even the effective rates that U.S. corporations actually face are high among peer countries. But as we describe in our recent paper, once you dig into the details of the measures that CBO is reporting, this isn’t actually the case. And in fact, their findings simply bolster conventional wisdom. See EPI’s analysis of the CBO report:

Does a recent CBO report contradict our findings about U.S. effective rates? No—and here’s why.

CBO recently released an updated report comparing corporate income taxes across G-20 countries (CBO 2017). Uncareful readers might be led into thinking that the CBO report overturns the empirical evidence cited above that indicates that corporate taxes actually paid by American companies are not notably high relative to international peers. But a careful read shows that the CBO report does not contradict this other evidence.

The headline findings of the CBO study claim that the United States has the highest statutory corporate tax rate, the third-highest average corporate tax rate, and the fourth-highest effective marginal corporate tax rate. However, when we dig into the study, we are able to show that the latter two claims are simply not true. We’ll take each of the CBO estimates in turn and show why they do not contradict the evidence presented in Figure C.

The statutory tax rate. As we have already noted, it is absolutely true that the United States has one of the highest statutory rates, but widespread loopholes make this rate irrelevant to the broader question of what corporations are actually paying in corporate income taxes.Read more

In January, Montgomery County, Maryland County Executive Isiah Leggett vetoed an ordinance passed by the county council that would match the minimum wage in the District of Columbia, raising the county minimum to $15 by 2020. Leggett then commissioned the consulting firm PFM to analyze the likely economic effects. The firm just released their study and their findings are so implausible that they border on the absurd. The study essentially concludes that raising the minimum wage in Montgomery County—even a small amount—would be the most devastating economic shock the county has experienced in a generation, more damaging than the Great Recession. To say that the study has methodological problems would be a gross understatement. No county official, business owner, worker, or resident in Montgomery County—and certainly not editorial boards of local newspapers—should give any credence to this report.

The report posits that the proposed $3.50 minimum wage hike over 5 years will lead to massive losses in jobs, income, and county revenues. Ostensibly wanting to present both the costs and benefits, the authors do also note that “increased wages are associated with improved mental health, reduced hunger, and decreased stress for workers and their families.” Admittedly, I have only skimmed the full 145 page report, but one only needs to read the initial section on job impacts to see how flawed this “study” is. The alleged large negative outcomes for incomes and county revenues all stem from the jobs findings, so there really isn’t need to read much further.

The report’s methodology for how they calculate expected impacts on employment is completely divorced from any actual research. First, the authors go through a long discussion of other localities that have enacted higher minimum wages—such as the District of Columbia, Los Angeles, and San Jose, among others— which they refer to as “comparison jurisdictions,” implying that the impacts of minimum wage hikes in these locations might provide guidance for how a higher minimum wages might affect Montgomery County. Ironically, they note that in virtually all these “comparison jurisdictions,” studies that analyzed the resulting or likely employment effects of the local minimum wage showed that any impact on jobs was negligible. Nevertheless, the authors assert that Montgomery County is not a “twin” of any of these places, thus none of these chosen comparisons should serve as a guide.

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Yesterday, I took an in-depth look at the latest wage data for select percentiles. Today, I’m going to provide a brief look at the latest wage data by educational group for the first half (FH) of 2017 compared to FH2016 and FH2007, before the Great Recession began.[1] While FH data are, by definition, more volatile than full year data, data for this year so far indicate a mild reversal of trend from what I found in The State of American Wages 2016.

The table below shows real average hourly wages in FH2017 dollars for the five main educational groupings and annualized changes over the last year and since FH2007. It is particularly striking that the wages for workers with less than a high school degree or just a high school degree rose faster over the last year than any other group at 1.9 percent and 1.7 percent, respectively. This phenomenon is likely related to the disproportionate increases among lower wage workers. I pointed out earlier this week the likely relationship between strong wage growth at the 10th percentile and the significant number of state-level minimum wage increases that took effect at the beginning of the year.

Table 1

Average hourly wages by education, FH2007–FH2017 (FH2017 dollars)

	Less than high school	High school	Some college	College	Advanced degree
All
FH2007	$13.53	$17.72	$20.03	$31.04	$39.28
FH2016	$13.30	$17.53	$19.50	$32.46	$41.45
FH2017	$13.55	$17.83	$19.41	$32.40	$41.58
Annualized percent change
2016-2017	1.9%	1.7%	-0.4%	-0.2%	0.3%
2007-2017	0.0%	0.1%	-0.3%	0.4%	0.6%

 

Source: EPI analysis of Current Population Survey Outgoing Rotation Group microdata

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From the latest wage data, we also see that average wages for workers with some college or a bachelor’s degree fell over the last year. Because of the opposing trends in high school and college wages, the gap between those two groups fell, mildly offsetting the increases we saw between 2015 and 2016. The slight decline in average wages for college graduates is particularly striking as the unemployment rate for that group averaged 2.9 percent over the last year. While not definitive, this is a sign that there is no shortage of credentialed workers in the economy today. If there were, employers would have to offer higher wages to attract and retain the workers they want. It remains to be seen whether this trend will continue through the remainder of the year.

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Agriculture has long been the poster child for an industry dependent on low-wage migrant workers. Today, about two-thirds of the hired workers employed on crop farms were born in Mexico, and most of these Mexican-born workers are not authorized to be employed in the United States. The total number of unauthorized migrants has fallen, while the number of unauthorized migrants who are employed in the U.S. labor market has been stable at about eight million, and the share of Mexican-born farm workers has also been stable. The lack of unauthorized newcomers makes agriculture a bellwether of how industries that rely on newcomers from abroad are adjusting to the slowdown in unauthorized migration. In agriculture, employers are responding in a number of ways. One of their main strategies has been to increase the use of the H-2A guestworker program to hire farm workers from abroad for seasonal jobs; this poses key challenges that have yet to be fully explored.

How farmers are adjusting to fewer new unauthorized migrant workers: 4-S strategies

Farmers are adjusting to the lack of new unauthorized migrant workers and higher labor costs with some or all of what are called “4-S” strategies: satisfy, stretch, substitute, and supplement. First, by satisfying current workers with new incentives, employers may be able to retain them longer. The second strategy is to stretch the current workforce with mechanical aids that increase worker productivity, which can include using conveyor belts that reduce the need to carry harvested produce as far, making them more productive and harvesting jobs more appealing to older workers and women. The third strategy is substitution or replacing workers with machines. Five of the most important field crops covered by government support programs—corn, soybeans, wheat, cotton, and rice—have largely been mechanized. Fresh fruits and vegetables, on the other hand, have defied mechanization because many are fragile and require gentler human hands, and machines that shake apples or pears from trees damage a higher share of the fruit than hand harvesters.

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Approximately 4,000 workers at a Nissan manufacturing plant in Mississippi will be voting on August 3 and 4 whether to join the United Autoworkers (UAW). The Nissan plant in Canton is located in a suburb of Jackson, the Mississippi state capital. For decades, the working poor in and around Jackson have faced significant problems stemming from systematic, persistent poverty. Over 30 percent of the people living in Jackson, and 26 percent of the people living in Canton, are living in poverty. But the struggles that many Mississippians face are not insurmountable, unchangeable problems. Rather, they are the result of deliberate policy choices made just down the road from the Nissan plant at the state’s capitol, on issues such as health, education, and jobs.

When it comes to health, Mississippi has the highest death rates in the country from preventable causes such as heart disease, diabetes, and stroke, but has one of the lowest rates in the country of residents who receive health insurance through their jobs. There is an immense need for better access to health care in Mississippi, and the Medicaid expansion available to Mississippi under the Affordable Care Act would give an additional 300,000 people coverage. But Governor Phil Bryant (R) deliberately chose not to expand Medicaid access for his citizens.

When it comes to education, many workers at the Nissan plant send their children to the Jackson and Canton public school districts, which were both graded as failing by the state’s Department of Education. To address underperforming schools, the state legislature established the Mississippi Adequate Education Program (MAEP), which requires the state to determine the amount of funding necessary to ensure schools districts have the basic funds needed to equip students to perform at least a “C” level. But each year, the state legislature has deliberately chosen to underfund the MAEP, totaling over $1.7 billion in education underfunding since 2008.

And when it comes to jobs, Governor Bryant is making another deliberate policy choice that will harm working people in Mississippi: he opposes the Nissan workers’ drive to form a union. The governor has taken this position even though unions have consistently been shown to raise wages and benefits for workers, which would be a much-needed boost for communities with high poverty rates like Jackson and Canton.

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Earlier this year, I wrote about the state of American wages through 2016. Now, we have a chance to see what’s been happening to wages in 2017 by examining wages in the first half (FH) of the year. In the table below, I present EPI’s most up-to-date real (inflation-adjusted) hourly wage series from the Current Population Survey (CPS) across the wage distribution. I compare the most recent six months of wage data with FH2016, FH2007, and FH2000.[1] My conclusions about FH2017 data are fairly consistent with what I found when I analyzed the 2016 data compared to previous years. Preliminary findings from 2017 suggest more broadly based wage growth—with significant gains at the 10th percentile—associated with an economy approaching full employment as well as state-level increases in the minimum wage. That good news is tempered by the fact that the vast majority of workers are, in reality, only beginning to make up for lost ground, rather than getting ahead, and wage inequality is still far greater today than in 2007 or 2000.

Table 1

Hourly wages by wage percentile, FH2000–FH2017 (FH2017 dollars)

Wage by percentile
Year	10th	20th	30th	40th	50th	60th	70th	80th	90th	95th
FH2000	$8.98	$10.89	$12.85	$14.79	$17.25	$20.43	$24.22	$29.40	$38.45	$48.91
FH2007	$9.14	$11.15	$13.02	$15.31	$17.83	$21.11	$24.95	$30.76	$41.01	$53.24
FH2016	$9.39	$10.85	$12.99	$15.33	$17.99	$21.37	$25.61	$32.03	$44.32	$59.11
FH2017	$9.85	$11.12	$13.19	$15.46	$18.17	$21.74	$26.09	$33.00	$45.60	$59.95
Percent change
2000-2007	0.3%	0.3%	0.2%	0.5%	0.5%	0.5%	0.4%	0.6%	0.9%	1.2%
2007-2017	0.8%	0.0%	0.1%	0.1%	0.2%	0.3%	0.4%	0.7%	1.1%	1.2%
2016-2017	5.0%	2.4%	1.6%	0.9%	1.0%	1.7%	1.9%	3.0%	2.9%	1.4%
2000-2017	0.6%	0.1%	0.2%	0.3%	0.3%	0.4%	0.4%	0.7%	1.0%	1.2%

Note: The xth-percentile wage is the wage at which x% of wage earners earn less and (100-x)% earn more.

Source: EPI analysis of Current Population Survey microdata

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Real wage growth over the last year is broadly based and stronger than the wage growth we’ve seen for much of the economic recovery from the Great Recession. This type of growth is expected as we continue to inch towards full employment. When the unemployment rate falls even as more workers are drawn into the labor market, available workers of all types become scarcer and employers have to increase wages to attract and retain the workers they want. Lowered unemployment has, in the past, benefited low-wage workers more than middle-wage workers and middle-wage more than higher-wage workers. Though we’ve seen slow but steady improvement over the last several years, today’s labor market still exhibits a fair amount of slack with a weaker prime-age employment-to-population ratio that we’ve seen at other times of similar unemployment rates and nominal wage growth slower than target levels.

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July 31st is Black Women’s Equal Pay Day, the day that marks how long into 2017 an African American woman would have to work in order to be paid the same wages as her white male counterpart was paid last year. Black women are uniquely positioned to be subjected to both a racial pay gap and a gender pay gap. In fact, on average, black women workers are paid only 67 cents on the dollar relative to white non-Hispanic men, even after controlling for education, years of experience, and location.

Why does this wage gap exist for black women?

Pay inequity directly touches the lives of black women in at least three distinct ways. Since few black women are among the top 5 percent of earners in this country, they have experienced the relatively slow wage growth that characterizes growing class inequality along with the vast majority of other Americans. But in addition to this class inequality, they also experience lower pay due to gender and race bias.

In the last 37 years, gender wage gaps have unquestionably narrowed—due in part to men’s wages decreasing—while racial wage gaps have gotten worse. Despite the large gender disadvantage faced by all women, black women were near parity with white women in 1979. However in 2016, white women’s wages grew to 76 percent of white men’s, compared to 67 percent for black women relative to white men—a racial difference of 9 percentage points. The trend is going the wrong way—progress is slowing for black women.

Myth #1: If black women worked harder, they’d get the pay they deserve.

The truth: Black women work more hours than white women. They have increased work hours 18.4 percent since 1979, yet the wage gap relative to white men has grown.

Over the last several decades, both black and white workers have increased their number of annual hours in response to slow wage growth. While men typically work more hours than women, the data reveal that growth in work hours, for both whites and blacks, was heavily driven by the growth of work hours among women. The increase in annual hours is particularly striking for workers in the bottom 40 percent of the wage distribution, where it has been driven almost entirely by women.

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