Martin Luther King called for leaders with ‘sound integrity’
Two weeks ago, the 117th Congress was sworn in. In two days, Joseph R. Biden Jr. will take the oath of office and become the 46th president of the United States. Between these two pivotal moments, with our nation’s leaders entering office during turbulent times, it is fitting to reflect on what Rev. Dr. Martin Luther King Jr.—a leader among leaders, whose legacy we celebrate today—had to say about leadership.
The U.S. economy could use some ‘overheating’: Biden’s relief and recovery plan meets the scale of the economic crisis
Recent proposals for large-scale fiscal relief and recovery from the economic effects of COVID-19 have drawn criticism that they could lead to “overheating” of the U.S. economy. These criticisms should be ignored. Proposals under discussion—including Biden’s economic plan introduced tonight—are highly unlikely to lead to any durable uptick in inflation or interest rates (the normal indicators of “overheating”) and even if they did, these higher interest rates and inflation would be a welcome sign of economic healing, not something to worry about.
Unemployment claims increase as COVID-19 surges
Another 1.2 million people applied for Unemployment Insurance (UI) benefits last week, including 965,000 people who applied for regular state UI and 284,000 who applied for Pandemic Unemployment Assistance (PUA). The 1.2 million who applied for UI last week was an increase of 304,000 from the prior week. The increase was due in part to data volatility during a messy time for UI data—the holidays, the President delaying signing the relief bill until the day after the pandemic programs expired—but the 181,000 rise in seasonally adjusted regular state claims suggests layoffs are increasing as the COVID-19 pandemic surges.
Last week was the 43rd straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were still greater than the worst week of the Great Recession.)
Most states provide just 26 weeks of regular benefits, so many workers are exhausting their regular state UI benefits. In the most recent data, however, continuing claims for regular state UI rose by 199,000, meaning new continuing claims were outpacing exhaustions. After an individual exhausts regular state benefits, they can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 24 weeks of regular state UI (the December COVID-19 relief bill increased the number of weeks of PEUC eligibility by 11, from 13 to 24).
Twenty states raised their minimum wages on New Year’s Day: Federal action is still needed
On January 1, minimum wages went up in 20 states. The increases range from an $0.08 inflation adjustment in Minnesota to a $1.50 per hour raise in New Mexico, the equivalent of an annual increase ranging from $166 to $3,120 for a full-time, full-year minimum wage worker. The updates can be viewed in EPI’s interactive Minimum Wage Tracker and in Figure A and Table 1 below.
In prior years, we have estimated the number of workers who would directly benefit from these increases, as well as the total dollar amount and average wage increase for affected workers in each state. Unfortunately, current circumstances make it difficult to accurately produce estimates of this year’s increases. The COVID-19 pandemic has devastated labor markets throughout the country, with a large share of the job losses occurring in low-wage sectors, such as leisure and hospitality, where minimum wage hikes typically affect large shares of workers. Because conditions in these industries are so different from what they were in the period reflected in our model’s underlying data, we cannot use it to make estimations about effects happening right at this moment.
Even so, we know that minimum wage increases are as crucial as ever in the current context—to protect low-wage workers from exploitation and continue toward the goal of a living wage for all workers. From a macroeconomic perspective, it’s smart policy: Low-wage households—who disproportionately benefit from increases to the minimum wage—are highly likely to quickly spend the extra dollars they receive, boosting consumer demand as we move into recovery.
The Trump administration finalizes rule attacking federal workers’ right to union representation in workplace discrimination cases
In his final weeks in office, the Trump administration continues to attack federal workers’ right to union representation. Last week, the Equal Employment Opportunity Commission (EEOC) voted to finalize a rule that prohibits union representatives from using official time—which is paid work time representatives use for union activities—to represent their coworkers in equal employment opportunity (EEO) matters, overturning almost 50 years of precedent. By prohibiting union representatives from using official time during EEO matters, the final rule effectively limits the right of federal workers to choose their representative in the EEO complaint process.
The rule also creates enormous cost burdens for federal workers who want to file a workplace discrimination complaint. By prohibiting the use of official time in discrimination complaints, federal workers are faced with the choice of hiring a private attorney or asking an inexperienced coworker to be their representative on their own free time. The cost of an attorney will be too costly for many vulnerable federal workers, and between the choices of hiring an attorney, asking an inexperienced coworker to be a representative, or not filing at all, many will forgo exercising their rights.
This is only one of many ways the Trump administration has attacked federal workers’ unions. During his first year, President Trump issued three executive orders eroding the collective bargaining rights of federal workers. These orders shortened the time frame expected to complete bargaining and directed agencies not to bargain over certain topics, limited the use of official time for collective bargaining activities, and weakened due process protections for federal workers subject to discipline. In October 2019, Trump signed an executive order revoking an executive order issued by former President Obama that gave employees of federal contractors the right of first refusal for employment on a new contract when a federal service contract changes hand.
The economy President-elect Biden is inheriting: 26.8 million workers—15.8% of the workforce—are being directly hurt by the coronavirus crisis
We now have a full year of jobs data for 2020. This is an important moment to take stock of where things stand in the labor market.
The official unemployment rate was 6.7% in December, and the official number of unemployed workers was 10.7 million, according to the Bureau of Labor Statistics (BLS). These official numbers are a vast undercount of the number of workers being harmed by the weak labor market, however. In fact, 26.8 million workers—15.8% of the workforce—are either unemployed, otherwise out of work due to the pandemic, or employed but experiencing a drop in hours and pay. Here are the missing factors:
- Some workers are being misclassified as “employed, not at work” instead of unemployed. BLS has discussed at length that there have been many workers who have been misclassified as “employed, not at work” during this pandemic who should be classified as “temporarily unemployed.” In December, there were 1.0 million such workers, a substantial increase from November. (Wonky aside: Some of these workers may not have had the option of being classified as “temporarily unemployed,” meaning they weren’t technically misclassified, but all of them were out of work because of the virus.) Accounting for these workers, the unemployment rate would be 7.3%.
How to organize in the anti-union South
Amy Waters, RN, CPN, at Mission Hospital in Asheville, NC, detailed her story of a successful union drive as a member of National Nurses United at EPI’s panel discussion, “Rebuilding Collective Bargaining Back Better.”
“We are now the first private hospital in North Carolina with a union and we are the largest newly formed union in the South, since, I believe, the 1970s,” says Waters.
Teaching at the intersection of social-justice activism and education
Jesse Hagopian, teacher and co-adviser of the Black Student Union at Garfield High School in Seattle, WA, spoke about the intersection of social-justice unionism and the Black Lives Matter at School movement at EPI’s book event, “Strike for the Common Good: Fighting for the Future of Public Education.”
“I think the fundamental problem with our education system is this fundamental problem we have with all of our systems and institutions in this country, and that is that they’re a product of an economic and political structure that is built on profit, racism, oppression, and inequality—namely capitalism,” says Hagopian.
What to watch on jobs day: Little to no improvement in December and huge losses over 2020
Jobs day on Friday will not only give us a read on the labor market for December, but it will also give us a sense of the devastating economy of 2020 and the economy President-elect Biden is walking into. Overall job growth for December will likely continue to trend toward zero, with some chance of employment actually falling. At the same time, rising COVID-19 caseloads, hospitalizations, and deaths means our health and economic woes are far from over. President-elect Biden is inheriting an exceedingly troubled economy with millions of families just trying to stay afloat. Over the Trump administration’s term, more jobs were lost than gained—there are 541,000 fewer jobs in the U.S. economy than when he took office in January 2016. And not only does President-elect Biden enter his first term in a disastrous economy, he also inherits a litany of anti-worker policy decisions from his predecessor who squandered the labor market strength he inherited.
The figure below provides a decent picture of the employment situation over the last year. In January and February, we saw solid job growth with gains of 214,000 and 251,000, respectively. After COVID-19 hit, federal legislation expanded unemployment insurance, increasing both eligibility and weekly payments, making it financially viable for millions of workers to safely stay home while public health officials assessed the situation. However, businesses that were shuttered in the interest of public health received insufficient federal economic support to keep paying their workers even as they remained safely at home. The U.S. economy experienced losses in March and April of 1.4 million and 20.8 million jobs, respectively, losses the likes of which we hadn’t experienced in modern history. Millions were on temporary layoff and once states started opening back up, some of those were rehired. We saw a significant bounce back in May and June with 2.7 million and 4.9 million jobs added, respectively. Unfortunately, over the succeeding five months, job growth has rapidly slowed as federal relief expired and the virus surged: 1.8 million in July down to 1.5 million in August then 711,000, 610,000, and a paltry 245,000 in November. December looks to continue the trend with low (or even negative) job growth expected.
First UI claims of 2021 are still higher than the worst of the Great Recession
There was an armed insurrection at the U.S. Capitol yesterday in which the police were complicit in a way that has everything to do with structural racism. Structural racism has also meant that Black and Latinx working people are experiencing a disproportionate health and economic impact of the COVID-19 pandemic. The UI data released this morning show a labor market in turmoil as COVID-19 surges.
Another 948,000 people applied for Unemployment Insurance (UI) benefits last week, including 787,000 people who applied for regular state UI and 161,000 who applied for Pandemic Unemployment Assistance (PUA). The 948,000 who applied for UI last week was a decrease of 152,000 from the prior week. That drop was driven almost entirely by a drop in PUA claims, undoubtedly due to uncertainty over whether PUA would be extended, as Trump delayed signing the relief bill during that week. Now that the program has been extended (more on that below), I expect PUA claims to rise again in coming weeks.
Last week was the 42nd straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were greater than the second-worst week of the Great Recession.)