Last Friday, the United Auto Workers (UAW) scored a historic win in the South after a decade-long campaign to organize a Volkswagen plant in Tennessee. The UAW is hoping momentum from the Volkswagen vote as well as last year’s successful strike at the “Big Three” automakers will help them win representation at a Mercedes-Benz plant in Alabama next month.

Meanwhile, this week the Biden administration announced four long-awaited protections for workers that have been EPI policy priorities:  

On Monday, the Centers for Medicare and Medicaid Services for the first time issued a final rule requiring nursing homes to provide minimum hours of nursing care per resident (3.48 hours) and to have a registered nurse available around the clock. In addition to protecting residents, the rule will improve the lives of underpaid and overworked nursing home workers and reduce staff turnover that exceeds 50% annually.

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The U.S. Department of Labor issued a final rule today making changes to the regulations about who is eligible for overtime pay. Here’s why this matters:

How the overtime threshold works

Overtime pay protections are included in the Fair Labor Standards Act (FLSA) to ensure that most workers who put in more than 40 hours a week get paid 1.5 times their regular pay for the extra hours they work. Almost all hourly workers are automatically eligible for overtime pay. But workers who are paid on a salary basis are only automatically eligible for overtime pay if they earn below a certain salary. Above that level, employers can claim that workers are “exempt” from overtime pay protection if their job duties are considered executive, administrative, or professional (EAP)—essentially managers or highly credentialed professionals.

The current overtime salary threshold is too low to protect many workers

The pay threshold determining which salaried workers are automatically eligible for overtime pay has been eroded both by not being updated using a proper methodology, and by inflation. Currently, workers earning $684 per week (the equivalent of $35,568 per year for a full-time, full-year employee) can be forced to work 60-70 hours a week for no more pay than if they worked 40 hours. The extra 20-30 hours are completely free to the employer, allowing employers to exploit workers with no consequences.

The Department of Labor’s new final rule will phase in the updated salary threshold in two steps over the next eight months, and automatically update it every three years thereafter.

• Effective on July 1, 2024, the salary threshold will be raised to $844 per week.
  • This is the equivalent of $43,888 per year for a full-time, full-year worker.
  • In 2019, the Department updated the salary threshold to a level that was inappropriately low. Further, that threshold has eroded substantially in the last 4+ years as wages and prices have risen over that period, leaving roughly one million workers without overtime protections who would have received those protections under the methodology of even that inappropriately weak rule. This first step essentially adjusts the salary threshold set in the 2019 rule for inflation.
• Effective on January 1, 2025, the salary threshold will be raised to $1,128 per week.
  • This is the equivalent of $58,656 per year for a full-time, full-year worker.
  • This level appropriately sets the threshold at the 35th percentile of weekly wages for full-time, salaried workers in the lowest-wage Census region, currently the South.
• The salary threshold will automatically update every three years thereafter, based on the methodology laid out in the rule, to ensure that the strength of the rule does not erode over time as prices and wages rise.

The final rule will benefit 4.3 million workers

• 2.4 million of these workers (56%) are women
• 1.0 million of these workers (24%) are workers of color
• The largest numbers of impacted workers are in professional and business services, health care and social services, and financial activities.
• The 4.3 million represents 3.0% of workers subject to the FLSA.

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The labor market recovery from the pandemic recession has been tremendous and low-wage workers have been key recipients of those gains, with dramatically fast real wage growth between 2019 and 2023 as we found in our recent report. These gains were due in part to several large spending bills passed during the pandemic—including the vital American Rescue Plan—which provided relief to workers and their families to help them weather the recession and fed the surge in employment. After losing their jobs in record numbers during the initial shock of the pandemic, low-wage workers found better job opportunities and experienced unusually strong leverage to see fast wage growth as employers scrambled to hire workers in the recovery.

At the same time, 29 states and the District of Columbia raised their minimum wages between 2019 and 2023—either through legislation, ballot referendums, or indexing to inflation. We found that these state minimum wage increases also boosted low-end wage growth: 10th-percentile wages grew about 50% faster in states with minimum wage increases compared with states without any change in their minimum wage (see Figure A). It is also the case that low-wage workers experienced relatively fast wage growth in all states, regardless of changes to their minimum wage.

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U.S. employers have tremendous power over worker conduct. Under federal law, employers can require workers to attend “captive audience” meetings—and force employees to listen to political, religious, or anti-union employer views—on work time.

Fortunately, a growing number of states are now seeking to address the threat of political and religious coercion in the workplace. This month, Washington state Governor Jay Inslee signed the Employee Free Choice Act into law, making Washington the seventh state to protect workers’ rights to opt out of captive audience meetings. The Illinois legislature is now considering whether to send similar legislation to Governor J.B. Pritzker before month’s end. Washington and Illinois are among the 18 states that have so far introduced or enacted bills to protect workers from offensive or unwanted political and religious speech unrelated to job tasks or performance.

Importantly, these bills do not limit employer rights to express opinions, or even to invite employees to political or religious meetings during work time. Instead, this legislation is designed to prohibit employers from threatening, disciplining, firing, or retaliating against workers who choose to not attend mandatory workplace meetings focused on communicating opinions on political or religious matters.  

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Below, EPI senior economist Elise Gould offers her insights on the jobs report released this morning, which showed 303,000 jobs added in March. Read the full thread here. 

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U.S. labor market strength in the recovery has been extraordinary because policymakers addressed the pandemic and subsequent recession at the scale of the problem. Unemployment has been at or below 4.0% for 27 months running, the longest such stretch since the late 1960s. Low-wage workers experienced an unprecedented surge in wage growth over the last four years, as shown in our new report.

These historically robust outcomes extended to Black and Hispanic workers. In 2023, the share of Black and Hispanic people ages 25-54 with a job hit an all-time high. Further, real wage growth among Black and Hispanic workers experienced a significant turnaround from the stagnant wage growth they suffered in much of the prior four decades.

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This piece was published in collaboration with the Albert Shanker Institute.

For some students and workers, hair is a trivial wardrobe decision, while for many Black and Brown people, their hairstyle can be a consequential element of class participation and a job offer. School dress codes and “business appropriate” dress often put high stakes and severe restrictions on how Black and Brown people can express their culture and identity through their hair.

Over the last several years, lawmakers in 24 states have sought to combat this problem by passing the “Creating a Respectful and Open World for Natural Hair” (CROWN) Act. The CROWN Act is a law that protects against discrimination based on hairstyle and texture in schools, workplaces, and beyond by extending the definition of racial expression to include wearing braids, locs, twists, and other culturally significant hair styles.

Yet the recent court case of Texas high school junior Darryl George reveals that even in states that have adopted versions of the CROWN Act, as Texas has, Black and Brown people can still face educational and career disadvantages for their hairstyles when discriminatory systems—in this case a school dress code—are validated by judicial interpretation that ignores the intent of the law.

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This piece was originally published in Democracy Journal. 

In the decades following World War II, the U.S. economy thrived. Economic growth was strong and the fruits of that growth were broadly shared. Not everything in the economy was perfect in the 1950s and ’60s—far from it. There were massive inequities by race and gender, marked by the exclusion of people of color and women from countless labor market opportunities. Nevertheless, a crucial dynamic was in place: As the economy grew, workers all across the wage distribution—low-wage, middle-wage, and high-wage—saw gains. Racial and gender gaps shrank. Growth was strong, and living standards improved across the board.

This positive dynamic was not a foregone conclusion. It was the result of “middle-out” policy choices that ensured that economic growth was both robust and broadly shared (though the term “middle-out” would not be coined until much later). Macroeconomic policymakers targeted sustained low unemployment, the federal minimum wage increased rapidly and regularly and was well enforced, the federal government actively safeguarded workers’ rights to unionization and collective bargaining, and regulations protected many other labor rights.

Starting in the late 1970s, however, policy began to shift in an ill-fated direction. As a neoliberal paradigm took hold and trickle-down economics secured its dominance among members of both parties as the proper way to manage the economy, policymakers went about dismantling the policy bulwarks that were the crucial foundation of robust, broadly shared growth. Macroeconomic policymakers began to tolerate excess unemployment, increases in the federal minimum wage became smaller and rarer, lawmakers failed to update labor law to keep up with relentless attacks on unionization and collective bargaining, and anti-worker deregulatory pushes succeeded again and again.

We all know what happened in those years. Workers lost ground dramatically. In the earlier era, from the postwar period through the late 1970s, productivity had grown 2.5% per year on average, while the typical worker’s compensation grew at an average of 2.4%. This parity led to life-changing improvements in living standards for working people from generation to generation. But as the policy regime shifted away from the middle-out economics of the New Deal to neoliberal economics, productivity growth slowed dramatically and compensation growth for typical workers absolutely tanked. From 1979 to 2022, productivity grew 1.2% per year on average—less than half the pace of the prior period—and the typical worker’s compensation grew by an average of just 0.3%. And—after improving in the earlier period—the Black-white wage gap widened.

In 2022, “production and nonsupervisory employees”—a Bureau of Labor Statistics designation covering some 80% of the workforce—earned an average of $57,300. If productivity and pay had not diverged since the late 1970s, and instead the average wage for this group had grown at the rate of productivity, a typical worker would have been making $82,000—a 43% bump that would equate to nearly $25,000 annually. That would be a life-changing amount of money for working families.

One of the core pillars of middle-out economics is empowering workers—giving them the tools they need to claim their fair share of economic growth. It’s worth emphasizing that there is no silver bullet here: There was a sweeping transformation to neoliberal economics, and we need another sweeping transformation to set us on a path of robust, broadly shared growth. In what follows, I detail some middle-out economic policies that will help close the productivity-pay gap, and what they would mean for working people.

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This is an excerpt from an op-ed that originally published in CNN. Read the full op-ed here.

The federal estate tax should be an effective tool to slightly level the playing field between those who inherit wealth and those who have to work for a living. It should also ensure that family dynasties who’ve amassed enormous fortunes pay their fair share in taxes.

But because policymakers have repeatedly doubled and tripled the immense sums that can be passed on before the tax kicks in, the estate tax today affects almost no one.

The estate tax exemption—the value of an estate that a mega-millionaire can own before facing taxes—has grown so much over the past quarter century that just eight of every 10,000 people who died in 2019 left behind an estate that was large enough to be subject to the tax, currently at 40%.

Read the full op-ed here.