Last week, fast food workers across the nation went on strike to demand higher wages, more regular schedules, and the right to collectively bargain. These fast food workers are a part of the restaurant industry, which Heidi Shierholz recently investigated and found to be characterized by low wages, few benefits, and high rates of poverty. But how does the experience of workers in the restaurant industry compare to its CEOs?

In 2013, CEOs of top restaurant chains in the United States made an average of $10.9 million, which is 721 times more than the minimum wage workers they employ. Restaurant are a part of the wider Leisure and Hospitality sector, which is also characterized by high rates of CEO pay and low rates of worker pay. In fact, CEOs at Leisure and Hospitality companies made, on average, 370 times the pay of a “typical” worker in that sector in 2013—making Leisure and Hospitality the worst sector in terms of disparity between CEO and worker pay. This ratio is far above the average CEO-to-worker pay ratio at all top companies, which in 2013 was 295.9-to-1. It’s also much higher than the next most disparate industry, Information, which has a CEO-to-worker pay ratio of 180-to-1, and the one after that, Trade, Transportation, and Utilities, which has a ratio of 178-to-1.

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For 12 months, McClatchy reporters have been carefully digging into a pit of corruption, gathering payroll records in 28 states and interviewing hundreds of workers and business owners about an epidemic of tax cheating, wage theft, and exploitation in the construction industry. The extraordinary report of their investigation was published Thursday, and it’s hair-raising. More than one-third of the employees working on federally-funded projects in Texas and Florida, overseen by public housing authorities and monitored by the U.S. Department of Labor, were improperly classified as independent contractors. The contractors misclassified them in order to escape paying worker’s compensation premiums, unemployment insurance taxes, and FICA taxes, to avoid complying with immigration document requirements, and to avoid liability for labor law violations. In just Florida, Texas, and North Carolina, McClatchy estimates that half a million workers were misclassified, and that the state and federal governments were cheated out of approximately $2 billion in taxes as result.

The stories make the damage this does to the labor market utterly clear. Construction wages were lower in 2012 than they were in 1980, despite rising productivity and huge profits in the industry. Even skilled tradesmen like plumbers and electricians earned 12 to 14 percent less than thirty years ago. Labor law offers no protection to independent contractors, who are not entitled to the minimum wage, overtime pay, or the right to join a union and bargain collectively. Exploited workers—many of them undocumented immigrants who live in fear of deportation—work without adequate safety protections, sometimes receive far less than the pay they were promised, and are deprived of the safety net’s protections if they lose their jobs, are injured or disabled, or reach retirement age. They often live in slum conditions, even while working on luxurious and glitzy new housing.

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Despite fears from some inflation hawks, the fact is that the weak labor market of the last seven years has put enormous downward pressure on wages, and there has been no significant pickup in nominal wage growth in recent years. As shown in the figure below, wage growth is far below the 3.5 percent rate consistent with the Federal Reserve Board’s inflation target of 2 percent. It’s clear that Fed policymakers should abandon notions of slowing the economy. (For a longer analysis of what to watch for in upcoming months on wage growth, see this explainer.)

What is more than obvious is that employers just don’t have to offer big wage increases to get and keep the workers they need, when hiring rates and net job creation remain far slower than what’s needed to generate healthy labor market outcomes. The result is that over the last year slow nominal wage growth, and inflation-adjusted wage stagnation (or even outright declines), have continued.

Fast-food workers across the country are on strike today, as a way of demanding higher wages and calling attention to the extremely low wages of low-wage workers. As Elise Gould shows in her recent paper, Why America’s Workers Need Faster Wage Growth—And What We Can Do About It, the wages of low-wage workers (the 10^th percentile of wage earners) declined by five percent over the 1979-2013 period, despite a generation of productivity gains (64.9 percent).

Low-wage workers in the United States also fare very poorly by international standards, as the OECD’s recent Employment Outlook report reminds us. In the United States, according to the OECD, 25.3 percent of workers had “low-pay”—earning less than two-thirds of the median wage—which was the highest incidence of low-pay work among the twenty-six countries surveyed and far higher than the OECD average of 16.3 percent. In fact, as the figure below shows, low-wage workers fare worse in the United States than any other OECD nation. Low-wage workers earned just 46.7 percent of that of the median worker—far beneath the OECD average of 59.9 percent in 2012. To catch up to the OECD average, U.S. low wage workers would need a 28 percent wage boost.

The last several decades have been hard on working men and women in the United States. The decline of unions (which now represent just a little more than one sixteenth of private sector workers), job loss to Mexico, China, and other low wage countries, and a series of bad court decisions weakening the rights to effectively bargain a contract have left working Americans nearly defenseless, as wages stagnate or fall and traditional pension coverage disappears. The results are ugly: since 2000, 70 percent of Americans have seen no gain in wages, and wages have fallen for the bottom 40 percent. Traditional pensions are disappearing, to the point that less than 18 percent of workers still have this crucial benefit.

Despite that grim background, there is cause for hope, and three events this past week brought a big smile to my face and lifted my spirits. The biggest lift came from two court decisions in California and Oregon (I’m a lawyer, I can’t help it!), where a U.S. Court of Appeals struck down one of corporate America’s longest-running and most outrageous schemes to cheat workers and scam the government. FedEx, a giant in package delivery industry, has avoided payroll taxes, prevented union organizing, and escaped the laws that give workers meal breaks, overtime pay, sick leave, and family leave by entering into sham contracts with its 27,000 drivers in which it declares them to be independent contractors. Employees have employment rights, but independent contractors don’t.

An employer has to pay Social Security and Medicare taxes for employees, as well as unemployment insurance taxes and worker’s compensation premiums—but not for independent contractors. So FedEx, while maintaining control over the minutest aspects of their working lives, called its drivers contractors—shifting all of the costs and risks off of FedEx and onto its employees. As described by Judge William Fletcher, FedEx “contracts with drivers to deliver packages to its customers. The drivers must wear FedEx uniforms, drive FedEx-approved vehicles, and groom themselves according to FedEx’s appearance standards. FedEx tells its drivers what packages to deliver, on what days, and at what times. Although drivers may operate multiple delivery routes and hire third parties to help perform work on those routes, they may do so only with FedEx’s consent.”

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I am not as optimistic about my future as my peers tell pollsters they are. Relative to the two previous generations, Millennials have higher levels of student debt, poverty, and unemployment, and lower levels of personal income and wealth. All of this has been covered in depth by the media, but what doesn’t get nearly enough attention given its importance is how poorly the American labor market is performing for my generation.

At EPI, we talk a lot about how weak labor markets hurts workers and their families (something that even The Onion has picked up on). Heidi Shierholz has documented the impact that labor market policies have on workers in various sectors, like domestic workers, and Josh Bivens and I wrote a paper showing how the weak labor market is the main challenge for middle class families in the aftermath of the Great Recession. But it can be hard to understand how the labor market relates to readers my age. With this post, I’m going to try to make the case for why young people should care about what’s going on in the labor market, and why it makes sense for them work to make it better.

A weak labor market hurts the living standards of young people in two immediate ways. First, it disproportionately affects young people’s job opportunities. This is true in good and bad times: unemployment for younger workers is almost always about twice the overall unemployment rate. As of July 2014, the unemployment rate for young workers was 13.6 percent, while unemployment for workers ages 25-54 was 5.2 percent (relative to 10.5 percent and 3.7 percent in 2007, the last time we experienced a “strong” labor market). One of the reasons for this is obvious: young people are inexperienced relative to their older counterparts. In a time of labor market weakness, older, more experienced workers who are newly unemployed will apply to jobs they may be overqualified for, leaving young people to compete with not just their peers but also a larger pool of more experienced candidates. So even while the Great Recession officially ended in 2009, young people are currently facing one extremely competitive labor market.

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In writing my paper on the most recent wage trends released today, I came across an interesting finding: Wages at the bottom of the wage distribution were the only ones that didn’t fall between the first half of 2013 and first half of 2014. The figure below shows the change in real (inflation-adjusted) wages over this time at different points in the wage distribution. What is obvious from the figure is that wages have fallen for nearly every group. If I showed you the same trends by education, as I do in the paper (see Figure O), you’d see an even starker story: Wages over the past year have fallen for all education groups, including those with college or advanced degrees.

So, why didn’t the 10^th percentile wage fall like all others? What is so special about that wage that sits below 90 percent and above 10 percent of workers (i.e., is not generally earned by particularly privileged workers)? Simple—several states raised their minimum wage over that period.

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