Tying minimum-wage increases to inflation, as 13 states do, will lift up low-wage workers and their families across the country
The original version of this post inadvertently left New Jersey off the list of states that will raise their minimum wage in response to inflation, it has since been updated.
13 states and the District of Columbia have policies that increase (or index) their state’s minimum wage based on inflation. Most of those indexed increases are based on the August-to-August change in the Consumer Price Index, which will be announced sometime in mid-September. With inflation higher than it has been in recent years, the indexed inflation increases in these states will be higher than usual as well. Still, these indexed increases are similar in size to other legislated minimum wage increases in recent years and they will help reduce the burden of rising prices for low-wage workers and their families.
The federal minimum wage has remained at $7.25/hour for the past fifteen years. Since then, its purchasing power or real value has dropped by 27% because of increases in the cost of living. As a result, the value of the minimum wage is the lowest since 1956. In response, thirty states, Washington D.C., and dozens of local governments have introduced their own minimum wages that are higher than the federal minimum wage. Workers in many of those states still experience the same problem – if the state doesn’t raise its minimum wage on a regular basis, its value will decline.
Jobs report doesn’t show signs of recession as labor market remains strong in August
Below, EPI economists offer their initial insights on the jobs report released this morning, which showed 315,000 jobs added in August.
From EPI senior economist, Elise Gould (@eliselgould):
Read the full Twitter thread here.
In August, most jobs were added in education and health services and professional and business services. While govt jobs increased by 7,000 in August, they remain 645,000 below pre-pandemic levels, a concerning phenomenon for those workers and the vital services they provide. pic.twitter.com/wMoqhfZhNg
— Elise Gould (@eliselgould) September 2, 2022
With the August increase, private sector employment is now 0.7% above pre-pandemic levels while state and local jobs remain stubbornly 3.2% below its February 2020 level with little improvement in recent months. pic.twitter.com/VS9ICLnRre
— Elise Gould (@eliselgould) September 2, 2022
The latest quarterly change (annualized) in average hourly earnings for all private-sector and production-nonsupervisory workers shows no signs of acceleration and demonstrates, once again, that wages in the labor market are pulling down (not pushing up) inflation. pic.twitter.com/dc1OcLulbi
— Elise Gould (@eliselgould) September 2, 2022
Troubling trend in Black unemployment, which rose 0.6 pps over the last two months to 6.4%. It’s a more volatile series, but labor force participation and EPOPs for Black workers have declined in each of the last three months as well. pic.twitter.com/YpVKSfijag
— Elise Gould (@eliselgould) September 2, 2022
The rise in Black unemployment and fall in participation and employment in August was experienced by both Black men and Black women.
The rise in Hispanic unemployment was accompanied by an increase in participation and employment for both Hispanic men and Hispanic women. pic.twitter.com/cqGR6WjUVm
— Elise Gould (@eliselgould) September 2, 2022
From EPI president, Heidi Shierholz (@hshierholz):
Read the full Twitter thread here.
We added 315,000 jobs in August. This is down substantially from the blistering average pace of 561,000 per month for the 12 months ending in February of this year, but remains solid. 2/
— Heidi Shierholz (@hshierholz) September 2, 2022
Wage growth dropped in August and has clearly not accelerated in 2022. 4/ pic.twitter.com/4QTO3gVadZ
— Heidi Shierholz (@hshierholz) September 2, 2022
Though today’s release underscores we’re almost surely not in a recession now, the fed may have already overshot and secured a recession in coming months. Regardless, they should slow the pace of rate increases substantially and be ready to go into neutral or even cut rates. 6/
— Heidi Shierholz (@hshierholz) September 2, 2022
The private sector has gained back all the jobs it lost in the covid recession, and more. State and local governments have gained back less than 60%. I’m a broken record on this, but we have to push state and local govts to use their ARPA funds to raise pay & hire workers. 8/
— Heidi Shierholz (@hshierholz) September 2, 2022
The overall numbers mask big disparities for different groups. Due to the impact of structural racism on the labor market, people of color have much higher unemp rates than white workers. For example, the unemp rate is currently 6.4% for Black workers, 3.2% for white workers. 10/
— Heidi Shierholz (@hshierholz) September 2, 2022
But it’s worth noting that all groups are seeing far faster recoveries *than they did following the Great Recession.* From the start of the Great Recession, it took more than 10 years for Black unemployment to get down to 6.4%, but this time around it took just over 2 years. 12/
— Heidi Shierholz (@hshierholz) September 2, 2022
Of course, a recession caused by the fed raising rates too aggressively would undo a great deal of the enormous gains that have occurred in the current recovery. 14/
— Heidi Shierholz (@hshierholz) September 2, 2022
Union approval hits highest point since 1965: Here’s why this isn’t surprising
It’s been nearly 60 years since approval for unions in the U.S. has been this high.
More than 70% of Americans now approve of labor unions. Those are the findings of a Gallup poll released this morning, and they shouldn’t be surprising.
Why? U.S. workers see unions as critical to fixing our nation’s broken workplace—where most workers have little power or agency at work.
The pandemic revealed much about work in this country. We saw countless examples of workers performing essential jobs—such as health care and food service. They were forced to work without appropriate health and safety gear and certainly without pay commensurate with the critical nature of the work they were doing.
Jobs openings ticked up in July while hires remained above pre-pandemic levels
Below, EPI senior economist Elise Gould offers her initial insights on today’s release of the Job Openings and Labor Turnover Survey (JOLTS) for July. Read the full Twitter thread here.
The July data show mild reductions in hires and quits while layoffs hold steady. Hires remain above pre-pandemic levels as the labor market continues to expand. Layoffs remain low in historical terms. Elevated quits mean workers seeking (and finding) better opportunities. pic.twitter.com/4DSSBXsfUI
— Elise Gould (@eliselgould) August 30, 2022
California’s FAST Recovery Act is a victory for fast food workers and a model for state labor policy
This week’s Senate passage of the California FAST Recovery Act, AB257, marks a historic breakthrough for workers and state labor policymaking with far-reaching national implications. As EPI and the National Employment Law Project noted in a statement endorsed by forty organizations earlier this year, AB257 “is important for workers across the country and for shaping the future of our national economy. The state of California has a long history of leading the way on workers’ rights and worker protections, including becoming the first state to pass a $15 minimum wage in 2016—a breakthrough that paved the way for states across the country to take similar action.”
AB257 was designed to address poverty wages and widespread worker rights violations that have resulted from extremely unequal bargaining power between fast food workers and employers across the industry. If signed into law by Governor Newsom, the legislation will give workers a seat at the policymaking table to engage as equals with franchisees, franchisors, and government agencies through a 10-member Fast Food Sector Council with authority to set statewide minimum wages and standards across the industry. Standards set by the new council will have a direct impact on over 550,000 California fast food workers, over 80% of whom are workers of color and two-thirds of whom are women.
Teachers’ unions reduce teacher stress. Anti-union laws significantly increase it.
Teaching, while rewarding, is one of the most stressful occupations in the U.S., and many teachers experience serious emotional and mental problems related to school stress. The COVID-19 pandemic exacerbated this phenomenon as teachers adapted to challenging working environments and navigated frequent technical difficulties in new online platforms, all while dealing with health concerns during in-person instruction.
Stress is the most common reason for leaving teaching early, and it is also associated with job absenteeism and poor teacher performance, negatively impacting student outcomes. As more schools face increased teacher turnover rates and intensified teacher shortages, it is essential to investigate what influences teachers’ job-related stress.
Abortion bans prove yet again there is no race-neutral policy
Earlier this summer, in a 6-3 decision, the Supreme Court finalized the proposed overturning of landmark cases Roe v. Wade and Planned Parenthood v. Casey which have protected the right to abortion in the U.S for decades. As a result, twenty-one states already have or are in the process of restricting abortion access completely. Other states will soon follow, resulting in the denial of abortion in over half the country. Though this decision was unsurprising, the blatant disregard by the Justices of the negative economic effects this decision will have on millions of women continues to be shocking.
Abortion bans negatively impact women’s economic well-being in various ways, from future earnings, college completion, and the broader issues of economic security and mobility. Though it’s clear this issue will negatively impact all women in this country, it is important to note that Black and Brown women are likely to face the negative economic consequences of this decision at a disproportionate rate.
State policy solutions for good home health care jobs—nearly half held by Black women in the South—should address the legacy of racism, sexism, and xenophobia in the workforce
Introduction
Home health care workers are part of the “care economy” that makes all other work possible.
These workers include nursing, psychiatric, and home health aides; personal and home care aides; and nursing assistants working in private households. They provide services and support for older adults, people with chronic illnesses, and people with disabilities allowing them to stay in their homes and communities, rather than nursing homes or other institutions. And the COVID-19 public health emergency further highlighted the importance of this workforce, who provide long-term care at a time when congregate settings are limited in their ability to support physical distancing or quarantining.
So why don’t we value these workers?
Jobs report doesn’t show signs of recession—yet—as labor market remains strong: The Fed should still be wary of raising interest rates much further
Below, EPI economists offer their initial insights on the jobs report released this morning, which showed 528,000 jobs added in July.
Rising inflation is a global problem: U.S. policy choices are not to blame
Key takeaways:
- An international comparison among OECD countries shows that rising inflation is a global phenomenon, not unique to the United States.
- This fact argues strongly that high inflation in the U.S. has not been driven by any unique American policy—not the American Rescue Plan and other generous fiscal relief during the pandemic recession and recovery nor anything else U.S.-centric.
- Some have argued that the global rise of inflation means that many countries— including the U.S.—overstimulated their economies and generated excess aggregate demand. But this explanation is not supported by the data. The countries with larger declines in unemployment over the past 18 months have not seen larger inflation spikes.
Consumer price data for June 2022 showed another month of rapid inflation, with overall inflation rising 9.1% year-over-year and core inflation (which doesn’t include volatile energy and food prices) rising by 5.9%. This level of inflation has obviously become a major political issue this year. But however this issue resonates politically, as an economic matter a common narrative that blames the Biden administration and its policy choices for causing the inflation is deeply misleading.
This is not simply a case for exonerating the Biden administration’s choices—how the recent inflationary outbreak is interpreted will have huge consequences for how policymakers respond. A loud chorus of economic analysts and influential policymakers continue highlighting the need for the Federal Reserve to continue raising interest rates sharply to slow growth to “rein in” inflation. This approach risks terrible consequences and threatens to cast aside the amazing policy achievement of a full jobs recovery from the pandemic recession.