State and local enforcers standing up to protect workers: Misclassifying workers ‘a pattern of deceit’
Series: The New Labor Law Enforcers
State attorneys general, district attorneys, and localities like cities are increasingly key players in protecting workers’ rights. This new series by Terri Gerstein provides snapshots of enforcement and other actions to protect workers’ rights by these new and emerging labor law enforcers at the state and local level. Gerstein is an EPI senior fellow and director of the state and local enforcement project at the Harvard Labor and Worklife Program, who has chronicled the growing influence of these new enforcers.
Recent cases brought by state and local enforcers include a host of violations: construction companies engaging in “a pattern of deceit” to misclassify and underpay workers; unsafe working conditions at Amazon; failure to provide paid sick leave; and the chronic problem of employers misusing interns and not paying for their work.
Here’s an snapshot of some enforcement actions across the country:
Up to 390,000 federal contractors will benefit from a $15 minimum wage starting in January
Below, EPI economist Ben Zipperer responds to the U.S. Department of Labor’s final rule requiring federal contractors to pay a minimum wage of $15 per hour starting January 30, 2022. Zipperer estimates the rule will benefit up to 390,000 federal contractors, half of whom are Black or Hispanic.
States are choosing employers over workers by using COVID relief funds to pay off unemployment insurance debt: Policymakers shouldn’t be afraid to increase taxes on employers to improve unemployment insurance
Because the COVID-19 pandemic and ensuing recession led to skyrocketing unemployment rates in early 2020, 23 states were forced to take out federal loans to continue paying out unemployment insurance (UI) benefits. While interest was initially waived on these loans, these debts started to collect interest after Labor Day of 2021. In recent months, many states have chosen to use federal fiscal relief funds given to state and local governments by the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 and the 2021 American Rescue Plan (ARP) to pay off accumulated UI trust fund debt.
This blog will detail why this is a poor use of federal recovery funds. Our main arguments are:
- Paying off UI trust fund debt accumulated in the past with fiscal relief funds means that these funds are not being used to support current investment or employment,
- Several key areas of state and local government investment have been deprived of funding for over a decade—using ARP relief funds to make up for this past investment deficit would spread the benefits of the fiscal aid much more broadly.
- State and local government employment remains steeply depressed from the COVID-19 economic shock. Restoring these jobs—and the full value of services these workers provided—should be a much higher priority for these governments than paying off UI debt.
- Paying down accumulated trust fund debts should be done by collecting more revenues from the employer payroll taxes earmarked for the UI system. These taxes have been kept far too low for too long and the result has been a dysfunctional UI system in many states.
The Post Office at a crossroads
Politics and special interests, not economic constraints, are what’s keeping the U.S. Postal Service from becoming a hub for affordable banking and other valuable community services in the 21st century. But we’ll need a new regulatory structure and new leadership to move forward.
USPS has a public service mandate to provide a similar level of service to communities across the country regardless of local economic conditions. In addition to daily mail delivery to far-flung locations, the Postal Service maintains post offices even in low-income urban neighborhoods and small towns that lack other basic services. The Postal Service is able to fulfill its mission while keeping postage rates low due to economies of scale.
Once the fixed costs of post offices and delivery are covered, the additional cost of new services is often minimal. If it weren’t prevented from doing so, the Postal Service could take advantage of underused capacity and build on Americans’ trust in the Postal Service to offer new services to the public while bringing needed revenue to the agency. But first we need to jettison a regulatory framework that protects private-sector rivals at the expense of consumers.
Fiscal policy and inflation: A look at the American Rescue Plan’s impact and what it means for the Build Back Better Act
Inflation has jumped up beyond what many expected earlier in this year. While there are plenty of good reasons to think it will begin decelerating by early 2022 and settle into more normal ranges rather than continuing to spiral upward, it has already proven more stubborn than many (well, at least I) expected.
This raises two key questions: Does rising inflation mean critics of the American Rescue Plan (ARP) have been vindicated, as is often claimed lately? And does this mean that the Build Back Better Act (BBBA) currently being debate should be shelved and/or radically trimmed down in size?
The respective answers to these questions are “mostly not” and “absolutely not.”
Quits hit record high in Job Openings and Labor Turnover Survey with little change in job openings and hires
Below, EPI senior economist Elise Gould offers her initial insights on today’s release of the Job Openings and Labor Turnover Survey (JOLTS) for September. Read the full Twitter thread here.
After falling sharply in August with the significant rise in COVID caseloads, the job openings rate continued to soften in September. pic.twitter.com/bxk8IWouD8
— Elise Gould (@eliselgould) November 12, 2021
The Build Back Better Act will support 2.3 million jobs per year in its first five years
The Build Back Better Act, while still not a done deal, now has a path toward passage in the House of Representatives, with a vote expected mid-November. The political wrangling to reach this moment has been tortuous. But the promise of the pending bill that could transform millions of lives—with meaningful investments in child care, long-term care, and universal pre-K, among others—is critical for a thriving modern economy that will boost productivity and deliver relief to strained family budgets.
Here, we update a previous analysis to reflect the latest state of the legislation and assess its potential impact on U.S. labor markets. Overall, we estimate that the Build Back Better Act (BBBA) will provide support for 2.3 million jobs per year in its first five years, shown in detail in Table 1, below. Add to this an estimated 772,000 jobs per year supported by the bipartisan infrastructure deal, also referred to as the Infrastructure Investment and Jobs Act, passed last Friday in the House, and you get more than 3 million jobs supported per year.
October inflation spike is not driven by economic overheating
Below, EPI director of research Josh Bivens offers his insights on today’s release of the Consumer Price Index (CPI) for October, which showed a 6.2% rise compared with a year ago. As Bivens explains, the inflation spike we’ve seen in 2021 is not driven by macroeconomic overheating. Instead, this spike is largely driven by COVID-related factors: a reallocation of spending away from face-to-face services and toward goods combined with supply-chain bottlenecks. Read the full Twitter thread.
Core inflation up less, at 4.6% y-o-y, but, still a large number. And yet the main determinants of this rise still look to me to not include macroeconomic overheating. 2
— Josh Bivens (@joshbivens_DC) November 10, 2021
Alabama is making a costly mistake on COVID-19 recovery funds. Here’s a better path forward.
When the Alabama legislature gathered for a special session in September, it made a short-sighted and costly mistake. Lawmakers chose to allocate $400 million in American Rescue Plan Act (ARPA) money—about 20% of Alabama’s federal COVID-19 relief funds—to help finance a $1.3 billion prison construction plan.
Alabama prisons are decrepit, dangerous, and massively overcrowded to such an extent that the U.S. Department of Justice (DOJ) has sued the state over the unconstitutional conditions. Raiding funds designed to help people and communities recover from pandemic-related economic distress will do nothing to make Alabama more humane and inclusive, particularly when Black Alabamians are three times more likely to be incarcerated than white Alabamians due to discriminatory practices in policing and incarceration.
The state has a better path to build a more sensible criminal justice system and avert a potential federal takeover. New buildings to house the same old problems won’t get us there. Real change will require meaningful changes to sentencing and reentry policies.
Solid job growth in October as the recent surge in the pandemic recedes
Below, EPI economists offer their initial insights on the October jobs report released this morning. After disappointing job growth numbers in August and September, a solid 531,000 jobs were added in October.