Policy Watch: Spring Regulatory Agenda puts corporations first
President Trump’s spring regulatory agenda throws out hard-fought protections for workers
The administration released its spring regulatory agenda this week. Its proposals to rescind regulations that protect workers’ safety, paychecks, and retirement savings reflect an ambitious agenda that consistently puts corporate interests first. The administration’s proposals to reopen rules protecting workers from exposure to beryllium, making it easier for OSHA to track injury and illness on the job, as well as the overtime and conflict of interest (fiduciary) rules, put workers’ pay, retirement security, and safety at the bottom of their list of priorities.
The administration’s proposal also includes changes to the current regulations on “tip pooling. The National Restaurant Association, who praised this move, has lobbied for years to loosen these restrictions and give employers more control over workers’ tips. While there are few details in this proposal at the moment, it’s worth noting that the restaurant industry, where tipping is prevalent, is rife with labor violations. In a recent EPI study on wage theft, more than 14 percent of food and drink service workers reported being paid less than the minimum wage, while 6 percent of other leisure and hospitality workers reported the same. And nearly half of workers reporting wage theft in the ten most populous states worked in service occupations. Under these circumstances, a policy action that could hand even more authority over a worker’s tips to their bosses would not be a step in the right direction.
Young workers face a tougher labor market even as the economy inches towards full employment
Over the last several years, the economy has moved steadily (if more slowly than we would have wanted) towards full employment. Payroll employment growth in excess of working-age population growth is a positive sign of a growing economy, but unrecovered labor force participation and below-target wage growth are clear signs of remaining economic slack—signaling that we haven’t yet reached genuine full employment.
Last week, Valerie Wilson and I put the black unemployment rate in perspective. Today, I want to talk about the plight of young workers in our economy. The overall unemployment rate between July 2016 and June 2017 (we look at data over a full calendar year to allow large enough sample sizes to compare subgroups within the labor force) was 4.7 percent. But this rate masks important differences within the population. Young workers, ages 16-24 years old, had an unemployment rate more than twice as high as prime-age (25-54 year old) workers (9.8 percent versus 4.0 percent) and nearly three times as high as older (55-64 year old) workers (3.3 percent). While young workers typically have much higher unemployment rates, tight labor markets could induce employers to turn to younger workers and push their unemployment rate down disproportionately in coming years. And like all workers, young workers need tighter overall labor markets to see their wages grow.
The UN Global Compact and labor migration: What can we expect?
The Global Compact on Migration (GCM) is an agreement that is being negotiated through the United Nations (UN) by its Member States to establish a new regime for cooperation on international migration. One of the major goals of the GCM is to expand labor migration and labor mobility channels for migrants seeking work in countries other than their own. But what could that look like in practice?
Migrant workers and international labor migration
There are approximately 244 million international migrants around the globe, accounting for approximately 3 percent of the world’s population. The UN’s International Labour Organization (ILO) estimated that 150 million or two-thirds of all international migrants were in the labor forces of the countries to which they moved in 2013, suggesting that many, if not most, migrants cross national borders for economic reasons.
Source: Figure is adapted from Figure 2.1 in ILO global estimates on migrant workers, Results and methodology, Special focus on migrant domestic workers
Policy Watch: Cuts to DOL budget, attacks on joint employer standard
Congress returned from the July 4th recess this week, and Senate Republicans debuted yet another proposal in the ongoing attempt to repeal and replace the Affordable Care Act. The latest proposal still includes the severe cuts to Medicaid found in earlier drafts, so millions of Americans will lose health care coverage if this week’s version of the Republican plan becomes law. Meanwhile, the House Appropriations Committee released a fiscal year 2018 Labor, Health and Human Services, Education (LHHS) funding bill that would cut funding for the Department of Labor (DOL) by $1.3 billion. This measure also includes several non-funding-related requirements (often called “riders”) that would block or weaken labor protections. The House Committee on Education and the Workforce held a hearing attacking the concept of joint employer liability under various worker protection laws. And, the Senate Committee on Health, Education, Labor and Pensions (HELP) held a consolidated hearing on President Trump’s nominees to the National Labor Relations Board (NLRB) and to DOL.
Draining worker protection and training resources from the FY18 DOL and NLRB budgets
The LHHS funding bill from Appropriations Subcommittee Republicans would further reduce funding for agencies that are already stretched thin. Occupational Safety and Health Administration funding would be nearly $12 million less than even President Trump’s draconian budget request earlier this year (and about 4 percent less than the current budget). The Wage and Hour Division would face a roughly 6 percent cut. In other areas, the bill takes a hatchet to job training programs and other services, particularly the Workforce Innovation and Opportunity Act programs at the Employment and Training Administration. There’s also a whopping 9 percent cut ($25 million) to the National Labor Relations Board. The Bureau of Labor Statistics, crucial for providing much-needed data on the workforce, would suffer a 5 percent cut.
Missouri’s new preemption law cheats 38,000 workers out of a raise
Minimum wage workers in St. Louis just had a taste of what life might be like with a raise, only to have it taken back by the Missouri state legislature. St. Louis is part of a growing number of cities across the country seeking to raise their own minimum wage by city ordinance.
In 2015, the City of St. Louis passed an ordinance establishing a minimum wage for the city that was higher than Missouri’s minimum wage. In the bill’s preamble, the City’s leaders explained the need for a wage increase for the its poorest workers:
WHEREAS, the defining issues of our time include the increase in income inequality, the growing gap between rich and poor, and the obstacles preventing people from rising into the middle class; and . . .
WHEREAS, low-wage workers in the St. Louis region struggle to meet their most basic needs and to provide their children a stable foundation, a safe dwelling, and an opportunity to obtain a high-quality education; and . . .
WHEREAS, minimum wage laws promote the general welfare, health, and prosperity of the City of St. Louis by ensuring that workers can better support and care for their families and fully participate in the community[.]
In 2015, Missouri’s state minimum wage was pegged at $7.65 per hour, and by passing its local ordinance, St. Louis raised it to $8.25 for employees working within the city limits. Because of that ordinance, St. Louis’ minimum wage rose to $9.00 in 2016, and $10.00 on January 1, 2017. Meanwhile, the state’s minimum wage barely budged to $7.70 during that same time period.
State lawmakers in Missouri just undercut wages for 38,000 workers in St. Louis
Last week, Missouri’s governor announced that he will let a preemption law take effect, prohibiting cities from requiring a minimum wage higher than the state’s—nullifying the city of St. Louis’s minimum wage ordinance and effectively lowering the city’s minimum wage from $10 down to $7.70. With this law, lawmakers have potentially undone raises for roughly 31,000 workers in St. Louis who received a raise when the city’s ordinance took effect in May, and likely stopped scheduled raises for those same 31,000 workers plus another 7,000 workers, for a total of 38,000 workers who would have gotten a pay increase when the city’s minimum wage was scheduled to rise to $11 an hour in January. (Minimum wage increases typically also lead to raises for workers slightly above the new minimum wage. The estimates here do not include these “spillover” effects.)
In 2015, the St. Louis city council and mayor approved a minimum wage ordinance, which would have gradually raise the city’s minimum wage to $11 per hour by January 2018. A protracted legal dispute delayed implementation of the ordinance until this past spring, but on May 5th, the ordinance finally took effect, raising the city minimum wage to $10 per hour. Now the city’s minimum wage will lose effect on August 28th, and the wage floor for workers in the city will fall back to the state minimum wage of $7.70.
It is impossible to know how many of the 31,000 St. Louis workers who were directly affected when the city’s minimum wage rose from to $10.00 will now see their pay cut, but some may. Workers can only hope that their employers will not roll back their raises. For some, that raise may have been the key difference in affording a new apartment rental, car payment, or similar long-term financial commitment. In any case, anyone starting out in the St. Louis workforce, or any low-wage worker considering changing jobs, is likely to find that most opportunities pay less than they would have had the ordinance remained in effect.
Healthcare’s biggest losers, part two: How the Senate’s TrumpCare bill can increase your state taxes
This blog post references the version of the Better Care Reconciliation Act introduced in June 2017. EPI will update the analysis if newer versions of the bill are significantly different.
In anticipation of cuts in federal spending, we often fail to consider the extent to which state governments will be obliged to pick up the slack when the cuts include grants-in-aid to the states. This concern applies with particular intensity to the largest item in most state government budgets: the Medicaid program. The Republican Senate initiative to “repeal-and-replace ObamaCare” with the so-called “Better Care Reconciliation Act (BCRA)” makes significant reductions in federal grants to state governments for Medicaid.
The Congressional Budget Office estimates that by 2036, these cuts will rise to 35 percent of spending under current law. It should be noted that current-law spending levels in the future accommodate expected increases in health care costs. Under the BCRA, future Medicaid spending might be higher than current-year spending, but it would still fall well-short of what would be necessary to absorb those future increases in health care costs. That is why the BCRA is said to cut “current services” spending, a concept that reflects projected increases in health care costs and Medicaid beneficiaries.
People who became eligible for Medicaid after 2010 under President Obama’s stimulus bill and the Affordable Care Act (ACA)—over ten million people—will lose health insurance coverage, except insofar as state governments replace the lost funds with their own tax revenue, or with cuts to other programs. (A likely victim in the latter respect is the other large item in state government budgets: K-12 education, in the form of grants to local governments and school districts.)
An important analysis by Allison Valentine, Robin Rudowitz, Don Boyd, and Lucy Dadayan provides insight into the impact of the effort by Republicans in the House of Representatives’ effort to abolish ObamaCare.
Deregulation can kill you
When you hear politicians singing the virtues of deregulation, remember the Grenfell Tower fire. Last month, 80 people, including young mothers and children, died in an inferno that destroyed the 24-story Grenfell Tower apartment building in London. The undisputed cause of this completely avoidable tragedy can teach us important lessons about government regulation and deregulation.
The blaze that devastated the building occurred when a faulty refrigerator near a window ignited the apartment tower’s exterior cladding, a sheath of aluminum and flammable insulation that was recently added. The cladding panels used on Grenfell Tower, which sandwich a layer of polyethylene between two aluminum sheets, are combustible. In most countries, the company that manufactures the panels recommends that they not be used on buildings taller than about 33 feet, or two stories, the reach of a firetruck’s ladder.
In most countries, including the United States, combustible panels like those installed at Grenfell Towers would be illegal. U.S. fire codes require fire testing of the cladding, and as the New York Times reports, “no aluminum cladding made with pure polyethylene – the type used at Grenfell Tower—has ever passed the test.”
Why the UN Global Compact on Migration matters
In response to the large movements of refugees and migrants around the world, including the dramatic movement of over one million Syrians, Afghans, and Africans from various countries to Europe in 2015, world leaders at a UN Summit for Refugees and Migrants in September 2016 proposed two “global compacts” to improve the governance of international migration: a Global Compact for Safe, Orderly, and Regular Migration and a Global Compact on Refugees. The Global Compact on Refugees already has a normative framework, the 1951 Geneva Convention, which has been ratified by almost every nation, and a lead UN agency in the UNHCR that can assist Member States to improve protections and more equitably share the burden of hosting refugees.
While the Global Compact on Refugees is expected to offer support to countries that host large numbers of refugees by developing a Comprehensive Refugee Response Framework and to develop a plan of action to address refugee issues, the Global Compact on Safe, Regular, and Orderly Migration (also referred to as the Global Compact on Migration or GCM) has a broader challenge. The GCM must offer a framework for protecting the human rights of migrants and integrating them in the places to which they move—often for the purposes of finding employment—while also helping combat xenophobia, racism, and discrimination toward migrants.
On labor nominations, what a difference a president makes
Tomorrow, the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP) is set to consider President Trump’s nominees to the National Labor Relations Board (NLRB), as well as Trump’s pick for Deputy Secretary of Labor. Both the NLRB and the Department of Labor are critically important agencies for this nation’s workers. Senate Republicans were so concerned about President Obama’s nominees to the NLRB that they refused to allow a vote, leading to a showdown that culminated in then-Senate Majority Leader Reid threatening to use the “nuclear option” to change the Senate rules for confirmations. What a difference a president makes. Now, Senate Republicans have decided to rush the confirmation hearings by consolidating consideration of the NLRB nominees with a nominee to a senior post at the Department of Labor.
As an independent agency, the NLRB members do not report to the president, but rather, serve as neutral arbiters of our nation’s labor law (“umpires rather than advocates,” as Senator Lamar Alexander, the chair of the committee, likes to say). DOL, meanwhile, is a cabinet-level agency—and its leaders report directly to the president. The Deputy Secretary of Labor is a political position whose main role is not neutral interpretation of the law but rather to advance the administration’s policies. Considering these nominees alongside each other, given the incongruous nature of the positions and agencies they will serve, is an abdication of the committee’s responsibility to thoroughly review these nominations.
Rushing this process and consolidating what should be separate hearings on important nominations deprives senators of the opportunity to examine these nominations. Most importantly, it shortchanges U.S. workers who depend on these agencies and the officials who lead them to enforce their rights and protect their freedoms. We deserve a process that enables our representatives to meaningfully consider the nominations. At the very least, the HELP Committee should hold separate hearings on nominees who, if confirmed, would serve vastly different roles in vastly different agencies.