We learned of some welcome news when Computerworld and the New York Times reported that Disney had reversed a decision to replace 35 American information technology (IT) workers with cheaper H-1B guestworkers at its ABC broadcasting offices in New York City and Burbank, CA. The news comes after a significant spotlight was shined on Disney’s recent replacement of 250 technology workers with H-1B guestworkers at Disney’s Theme Parks division. This is good news for the 35 workers who will keep their jobs for now, and at least in the short term, will not have to train their foreign guestworker replacements. However, this decision by Disney executives does nothing for the 250 workers who have already lost their jobs to workers they were forced to train and who will earn roughly $40,000 less for doing the same job. Nor does it help the approximately 225 Northeast Utilities workers, or the 400 at Southern California Edison (SCE), or the 600 at Xerox, or 900 at Cargill, or 100 at Fossil Group, or tens of thousands of workers who likely suffered a similar fate at hundreds of other places that have never been reported.

It appears that the media attention has shamed Disney into reversing its decision to force more of its American workers out in favor of cheaper guestworkers. Clearly, Disney’s own sense of social responsibility wasn’t enough to convince its executives to do the right thing in the first place. While the reversal of Disney’s layoffs is good news, it hardly makes us sanguine about the future of the H-1B visa program. The payoff for replacing American workers with indentured and underpaid H-1B guestworkers is simply too high: as much as a 49 percent wage savings in some cases. Relying solely on the media to shame firms is insufficient. Simply put, the government must immediately make changes to the program.

We would also like to emphasize two important points about the H-1B that have not been highlighted enough in the recent media coverage. First, the temporary foreign workers employed by the firms hired to replace American workers are blameless in all of these situations, as one American IT worker who was recently replaced by an H-1B at SCE attested to in a recent interview. The blame should be placed squarely on the corporate profiteering that leaves Americans out of a job and foreign workers vastly underpaid for the work they are hired to do. The H-1B workers are simply seeking to advance their careers and to make better lives for themselves in the United States, and are often placed in working situations where they are vulnerable and can be easily exploited.

Read more

This piece was originally published in the New York Times “Room for Debate” section on May 12, 2015.

The true costs of goods and services is a secondary issue to stagnant and exploitative wages: The cost of certain goods might go up, but more people would be able to afford them with better compensation. The current price of low-cost goods and services in the United States is low-income, exploited workers living in poverty. But the country as a whole isn’t broke, only its workers are — while corporations and C.E.O.s are richer than ever.

The value of the federal minimum wage has declined 24 percent since 1968. If we re-established the relationship between the minimum wage and the overall median wage to its 1968 level, we would raise wages for 35 million people, a full quarter of the workforce.

The situation is even worse for those earning tips, such as nail salon workers. Their pay is set at $2.13 an hour by the federal government. If tips don’t supplement these workers’ paycheck to the regular minimum, they have to ask their employers for the difference. (And good luck with that.)

But low and stagnant wages are not the result of benign, abstract economic forces. They reflect conscious policy choices by lawmakers influenced by powerful corporate lobby groups like the Chamber of Commerce and the National Restaurant Association.

Read more

Corporate lobbyists have convinced legislators of both parties that America needs more guest workers in high-tech jobs. Leading the charge in Congress to do their bidding is Utah Sen. Orrin Hatch, who has introduced legislation to double or triple the number of non-immigrant tech workers who can be hired annually on H-1B visas. But his proposal won’t fix the H-1B program’s flaws, which allow American and foreign workers alike to be exploited and underpaid.

Continue reading the rest of this op-ed at the Salt Lake Tribune.

The National Retail Federation (NRF), a lobbying organization for department store corporations, sporting goods and  grocery chains,  and other large retailers, is opposed to the Department of Labor’s update of the rules governing the right of salaried workers to overtime pay. The reasons the NRF gives are somewhat contradictory and are sometimes surprising. But they boil down to this: the retail lobby doesn’t think businesses should have to pay for the overtime hours most of their employees work.

In March 2014, President Obama directed the Secretary of Labor to update the rules intended to exclude high-level employees like executives and professionals from overtime protections. The rules are currently so out of date that they define even workers earning below-poverty salaries as exempt, even though the pay of true executives and professionals like lawyers and CPAs has been soaring for decades. To fix this problem, the Labor Department is reportedly considering raising the threshold for exemption from $23,660 a year to $42,000 or more. Some advocates are calling for a threshold as high as $70,000 a year, which would protect the same share of the salaried workforce as was covered in 1975.

If the threshold is raised to $42,000, the NRF predicts significant changes in retail employment: while some employers will raise salaries for employees near the threshold to guarantee that they continue to be excluded from overtime protection, many salaried employees (some of whom work 60-70 hours a week for no extra pay) will have their hours reduced and as a result, 76,000 new jobs will be created averaging 30 hours per week. Altogether, half of the retail workforce that is currently excluded from coverage will be guaranteed coverage by the law’s overtime protections. That all sounds pretty good to me.

Read more

Stung by the sudden derailment in the House of Representatives of their rush to pass the Trans-Pacific Partnership (TPP), the Washington establishment has wasted no time in warning us of the terrifying menace of a rising China, should the trade deal not be put back on track next week.

Echoing previous remarks by the president, House Speaker John Boehner warned “we’re allowing and inviting China to go right on setting the rules of the world economy.” Pro-TPP Democratic Congressman Jim Hines (D-Conn.) said that Friday’s vote, “told the world that we prefer that China set the rules and values that govern trade in the Pacific.”

These remarks are both fatuous and revealing of how weak the case for the TPP is, even among its own promoters.

As a matter of obvious fact, the rules of the world economy within which the Chinese have been taking the United States to the economic cleaners were not set in China. They were set in Washington, DC by our own American policymakers and fixers who in one way or another were, and still are, are in the pay of multinational corporate investors.

Under Ronald Reagan, the two Bushes, Bill Clinton and now Barack Obama the United States government designed and imposed the global model of  “free trade” which promoted the shift of investment from the United States to parts of the world where labor is cheap, the environment is unprotected, and the public interest is even more up for sale than it is here.

Read more

Proponents of Trade Promotion Authority (aka fast-track trade negotiating authority), which the House of Representatives will likely vote on soon, have made an unequivocal promise that future trade agreements like the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) will explicitly exclude any provisions that would require a change to U.S. immigration law, regulations, policy, or practices. Many members of Congress in both parties have expressed concern that trade agreements might limit America’s ability to set immigration policy. Republican congressmen Paul Ryan and Robert Goodlatte have responded by explicitly assuring members of their party that there will be no immigration provisions in any trade bill.

U.S. Trade Representative Michael Froman has stated in an interrogatory with Sen. Chuck Grassley (R-Iowa) and via letter that nothing is being negotiated in the TPP that “would require any modification to U.S. immigration law or policy or any changes to the U.S. visa system.”

Furthermore, just a few weeks ago, the Senate Finance Committee released a statement titled “TPA Drives High-Quality Trade Agreements, Not Immigration Law: The Administration Has No Authority Under TPA or Any Pending Trade Agreement to Unilaterally Change U.S. Immigration Laws,” and the committee’s May 12 report on the Fast Track bill that was eventually passed by the full Senate contained this relevant language:

For many years, Congress has made it abundantly clear that international trade agreements should not change, nor require any change, to U.S. immigration law and practice…

The Committee continues to believe that it is not appropriate to negotiate in a trade agreement any provision that would (1) require changes to U.S. immigration law, regulations, policy, or practice; (2) accord immigration-related benefits to parties to trade agreements; (3) commit the United States to keep unchanged, with respect to nationals of parties to trade agreements, one or more existing provisions of U.S. immigration law, policy, or practice; or (4) expand to additional countries immigration-related commitments already made by the United States in earlier trade agreements.

Read more

The House is expected to vote this week on fast track authority to negotiate two massive trade deals, including the proposed Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (T-TIP). The Wall Street Journal noted on Sunday that “the decade’s old argument that major trade agreements boost both exports and jobs at home is losing its political punch, even in some of the country’s most export-heavy Congressional Districts.” One reason is that counting exports is less than half the story. While it’s true that exports support domestic jobs, imports reduce demand for domestic output and cost jobs.

As I’ve written before, trade is a two-way street, and talking about exports without considering imports is like keeping score in a baseball game by counting only the runs scored by the home team. It might make you feel good, but it won’t tell you who’s winning the game. The Journal story included a table showing the ten congressional districts with the biggest gains in exports since 2006. The authors expressed surprise that only three of the ten members representing these districts have announced support for fast track (trade promotion authority, or TPA).

Looking at jobs supported and displaced by trade in these districts provides a very different picture, which helps explain why supporters of fast track are having trouble rounding up votes in the House. In a recent study, I estimated the number of jobs supported and displaced by China trade between 2001 and 2013. We used the results of this study to examine the impacts of China trade on jobs by congressional district between 2006 and 2013—the period covered in the Wall Street Journal story. The results for the top ten districts identified by the Journal are shown in the following table.

Read more

I testified last week in Harrisburg on a 410-page public pension “reform” bill (SB1) that neither I nor my fellow witnesses had read. Normally, we would have been able to rely on actuarial reports, but the actuaries weren’t given enough time to read the bill either. This didn’t stop 28 state senators from passing the bill on a party-line vote without even bothering to hold a hearing (the two I attended—one as a witness—were held by House committees after the Senate vote).

At the first hearing, supporters claimed the bill would help repair Pennsylvania’s credit rating and ensure intergenerational equity. You would never know that the bill actually delays paying down legacy costs. As a result, even the Manhattan Institute’s Richard Dreyfuss (the public pension scourge, not Jaws hero), couldn’t bring himself to support it.

Supporters also claim the bill “preserves current employee retirement benefits,” despite the fact that $13 billion of the projected $16 billion in cost savings comes from changes affecting current employees. At least one of these changes—removing a subsidy for lump sum distributions—might be a good idea in the abstract. But all cuts affecting mid-career workers will inevitably (and probably successfully) be challenged in court, as Dreyfuss pointed out.

Read more

Last week, I wrote about how high school graduates will face significant economic challenges when they graduate this spring. High school graduates almost always experience higher levels of unemployment and lower wages than their counterparts with a college degree, and their labor market difficulties were particularly exacerbated by the Great Recession. Despite officially ending in June 2009, the recession left millions unemployed for prolonged spells, with recent workforce entrants such as young high school grads being particularly vulnerable.

Underemployment is one of the major problems that young workers currently face. Approximately 19.5 percent of young high school graduates (those ages 17–20) are unemployed and about 37.0 percent are underemployed. For young college graduates (those ages 21–24) the unemployment rate is 7.2 percent and the underemployment rate is 14.9 percent. Our measure of underemployment is the U-6 measure from the BLS, which includes not only unemployed workers but also those who are part-time for economic reasons and those who are marginally attached to the labor force.

When we look at the underemployment data by race, we often see an even worse situation. As shown in the charts below, 23.0 percent of young black college graduates are currently underemployed, compared with 22.4 percent of young Hispanic college grads and 12.9 percent of white college grads. And as elevated as these rates are, the picture is bleakest for young high school graduates, who are majority of young workers.

Underemployment

Underemployment rate of young college graduates, by race and ethnicity, 2000–2015*

Date	White	Black
2000-01-01	7.6%	17.5%
2000-02-01	7.5%	17.8%
2000-03-01	7.8%	17.8%
2000-04-01	7.8%	17.0%
2000-05-01	7.9%	16.1%
2000-06-01	7.8%	16.6%
2000-07-01	7.7%	15.4%
2000-08-01	7.4%	14.6%
2000-09-01	7.3%	15.1%
2000-10-01	7.2%	15.3%
2000-11-01	7.0%	15.7%
2000-12-01	6.9%	15.4%
2001-01-01	6.8%	14.2%
2001-02-01	6.8%	12.2%
2001-03-01	6.9%	11.6%
2001-04-01	7.0%	11.6%
2001-05-01	6.9%	11.3%
2001-06-01	7.1%	12.0%
2001-07-01	7.1%	12.3%
2001-08-01	7.6%	13.3%
2001-09-01	8.1%	13.3%
2001-10-01	8.3%	14.0%
2001-11-01	8.5%	14.7%
2001-12-01	8.6%	15.9%
2002-01-01	8.8%	16.4%
2002-02-01	9.0%	17.6%
2002-03-01	8.9%	17.6%
2002-04-01	8.9%	18.3%
2002-05-01	9.0%	18.5%
2002-06-01	8.8%	18.2%
2002-07-01	8.9%	18.3%
2002-08-01	8.6%	17.5%
2002-09-01	8.6%	17.5%
2002-10-01	8.4%	17.3%
2002-11-01	8.4%	17.1%
2002-12-01	8.7%	15.7%
2003-01-01	9.0%	15.3%
2003-02-01	8.9%	14.9%
2003-03-01	9.2%	14.8%
2003-04-01	9.1%	14.3%
2003-05-01	9.3%	15.9%
2003-06-01	9.6%	15.2%
2003-07-01	10.0%	15.5%
2003-08-01	10.3%	15.5%
2003-09-01	10.2%	15.4%
2003-10-01	10.4%	15.1%
2003-11-01	10.5%	15.0%
2003-12-01	10.4%	15.1%
2004-01-01	10.3%	15.9%
2004-02-01	10.5%	16.9%
2004-03-01	10.5%	17.5%
2004-04-01	10.7%	17.4%
2004-05-01	10.5%	15.9%
2004-06-01	10.6%	15.4%
2004-07-01	10.3%	15.5%
2004-08-01	10.1%	14.6%
2004-09-01	10.0%	14.5%
2004-10-01	9.8%	15.9%
2004-11-01	9.8%	16.5%
2004-12-01	9.8%	16.7%
2005-01-01	9.8%	16.3%
2005-02-01	9.8%	15.5%
2005-03-01	9.7%	15.7%
2005-04-01	9.7%	15.8%
2005-05-01	9.9%	16.6%
2005-06-01	9.6%	16.5%
2005-07-01	9.5%	16.6%
2005-08-01	9.6%	17.5%
2005-09-01	9.7%	17.6%
2005-10-01	9.6%	16.5%
2005-11-01	9.6%	15.8%
2005-12-01	9.5%	15.5%
2006-01-01	9.4%	15.0%
2006-02-01	9.4%	15.2%
2006-03-01	9.3%	15.2%
2006-04-01	9.0%	14.5%
2006-05-01	8.8%	13.2%
2006-06-01	8.9%	13.8%
2006-07-01	8.9%	14.8%
2006-08-01	8.6%	14.6%
2006-09-01	8.5%	14.3%
2006-10-01	8.7%	13.7%
2006-11-01	8.5%	13.3%
2006-12-01	8.7%	13.2%
2007-01-01	8.7%	13.4%
2007-02-01	8.4%	13.2%
2007-03-01	8.2%	13.4%
2007-04-01	8.2%	14.6%
2007-05-01	8.3%	15.3%
2007-06-01	8.4%	15.2%
2007-07-01	8.5%	14.6%
2007-08-01	8.8%	13.6%
2007-09-01	9.1%	14.5%
2007-10-01	9.0%	15.1%
2007-11-01	9.2%	15.4%
2007-12-01	9.0%	16.2%
2008-01-01	8.9%	16.6%
2008-02-01	9.0%	17.0%
2008-03-01	9.1%	16.1%
2008-04-01	9.2%	15.5%
2008-05-01	9.4%	15.6%
2008-06-01	9.8%	15.6%
2008-07-01	9.9%	15.4%
2008-08-01	9.9%	16.5%
2008-09-01	10.0%	15.8%
2008-10-01	10.2%	14.9%
2008-11-01	10.3%	14.8%
2008-12-01	10.6%	14.7%
2009-01-01	11.1%	14.9%
2009-02-01	11.5%	16.0%
2009-03-01	12.2%	18.0%
2009-04-01	12.5%	19.5%
2009-05-01	12.8%	20.4%
2009-06-01	13.3%	20.7%
2009-07-01	13.6%	22.3%
2009-08-01	14.4%	24.1%
2009-09-01	14.8%	25.9%
2009-10-01	15.1%	26.1%
2009-11-01	15.5%	25.1%
2009-12-01	15.8%	25.9%
2010-01-01	16.0%	26.3%
2010-02-01	16.2%	25.8%
2010-03-01	16.1%	24.6%
2010-04-01	16.4%	25.3%
2010-05-01	16.6%	24.9%
2010-06-01	16.6%	26.6%
2010-07-01	16.7%	28.5%
2010-08-01	16.2%	28.9%
2010-09-01	16.5%	28.7%
2010-10-01	16.6%	29.2%
2010-11-01	16.7%	29.3%
2010-12-01	16.7%	30.0%
2011-01-01	17.0%	30.8%
2011-02-01	17.2%	30.7%
2011-03-01	17.5%	31.0%
2011-04-01	17.3%	28.8%
2011-05-01	17.1%	28.2%
2011-06-01	17.1%	28.4%
2011-07-01	17.6%	26.0%
2011-08-01	18.1%	24.6%
2011-09-01	18.0%	23.7%
2011-10-01	17.7%	23.5%
2011-11-01	17.6%	22.5%
2011-12-01	17.3%	21.3%
2012-01-01	17.2%	20.9%
2012-02-01	17.0%	21.1%
2012-03-01	16.7%	21.4%
2012-04-01	16.5%	22.4%
2012-05-01	16.5%	22.2%
2012-06-01	16.4%	20.3%
2012-07-01	16.3%	19.8%
2012-08-01	15.9%	20.6%
2012-09-01	15.8%	21.2%
2012-10-01	15.7%	20.6%
2012-11-01	15.3%	20.8%
2012-12-01	15.5%	20.8%
2013-01-01	15.6%	21.2%
2013-02-01	15.6%	22.9%
2013-03-01	15.6%	23.5%
2013-04-01	15.7%	23.0%
2013-05-01	15.8%	24.0%
2013-06-01	15.7%	25.2%
2013-07-01	15.5%	25.0%
2013-08-01	15.5%	26.4%
2013-09-01	15.7%	27.5%
2013-10-01	16.0%	28.2%
2013-11-01	16.2%	28.4%
2013-12-01	16.1%	29.0%
2014-01-01	16.1%	29.5%
2014-02-01	16.0%	28.2%
2014-03-01	15.8%	28.1%
2014-04-01	15.4%	27.8%
2014-05-01	15.0%	26.8%
2014-06-01	14.9%	26.2%
2014-07-01	14.6%	27.0%
2014-08-01	14.3%	25.3%
2014-09-01	13.9%	24.0%
2014-10-01	13.6%	23.4%
2014-11-01	13.4%	22.7%
2014-12-01	13.4%	22.2%
2015-01-01	13.1%	21.7%
2015-02-01	13.0%	23.7%
2015-03-01	12.9%	23.0%

 

ChartData Download data

The data below can be saved or copied directly into Excel.

The data underlying the figure.

* Data reflect 12-month moving averages; data for 2015 represent 12-month average from April 2014 to March 2015.

Note: Data are for college graduates age 21–24 who are not enrolled in further schooling. Shaded areas denote recessions. Race/ethnicity categories are mutually exclusive (i.e., white non-Hispanic and black non-Hispanic).  The Hispanic category is not included due to insufficient sample sizes over part of the series.

Source: EPI analysis of basic monthly Current Population Survey microdata

Share on Facebook Tweet this chart

Embed

Copy the code below to embed this chart on your website.

<iframe width="100%" height="460" src="https://www.epi.org?p=87819&view=embed&embed_template=charts_v2013_08_21&embed_date=20260611&onp=87823&utm_source=epi_press&utm_medium=chart_embed&utm_campaign=charts_v2" frameborder="0"></iframe>

Download image

Read more