To further prove her point, she brings up data from The Economic Policy Institute, which found “that public school teachers nationally make about 19 percent less than employees in commensurate professions, or about 81 cents on the dollar.” According to the data, the wage penalty has increased significantly, compared to only 6% in 1996.
One, Matt Stoller of the American Economic Liberties Project, predicted continuing higher inflation last December and said 60% of it is due to corporate thirst for ever-rising profits. Others, including the Economic Policy Institute, agree. They just differ on numbers.
Since 2009, when the federal minimum rose to $7.25 an hour, it’s lost more than one-fourth of its purchasing power. When factoring in inflation, today’s minimum wage hasn’t been worth this little since the 1950s, according to calculation from the Economic Policy Institute.
“Layoffs continue to be low in historical terms and high levels of quits signal workers seeking [and finding] better opportunities,” Elise Gould, senior economist at the Economic Policy Institute, said in a note on Tuesday.
Then comes the multiplier effect, which refers to the impact an investment will have on jobs and an economy. According to the Economic Policy Institute, for every 100 direct jobs created in semiconductor manufacturing, there are 192.2 indirect jobs created.
Researchers at the Economic Policy Institute recently noted that after adjusting for inflation data, the minimum wage sits at its lowest point in 66 years. Put another way, in 1956, the 75 cents per hour wage bought someone as much as $7.25 does today.
A 1% increase in pay would amount to an 8% decline in purchasing power, according to Heidi Shierholz, president of the Economic Policy Institute, who served as the Labor Department’s chief economist under President Barack Obama. And some economics research suggests inflation won’t ease in the near future.
As the cost of everything from fuel to food increases, the value of the dollar decreases. That means workers are seeing the purchasing power of their paychecks shrink. In fact, the value of the federal minimum wage is now at its lowest point since 1956, according to an analysis by the Economic Policy Institute (EPI).
“It’s a huge problem,” said Heidi Shierholz, president of the Economic Policy Institute, a left-leaning think tank. “Inadequate pay has been a huge reason teachers and support staff in state and local government have quit. In order to attract and retain workers they need, they will have to not just hire workers but raise pay.”
It’s also especially crucial for Black workers and those of several other marginalized demographics. According to the Economic Policy Institute, on average, Black workers are paid 73 cents on the white dollar. Black women make even less—64 cents for every white male dollar. Even with advanced degrees, Black people still see a significant wage gap compared to their white counterparts.
Low pay and poor working conditions are the norm for workers in long-term care, according to a report published Wednesday by the think tank Economic Policy Institute.
Researchers gathered data on employment levels, demographics, compensation, poverty rates and unionization of workers. The field is dominated by women, especially Black and immigrant women, the authors said.
Like workers of all education levels, college graduates experience considerable wage inequality depending on their race. White workers’ salaries, on average, outpace those of both Black and Hispanic workers at each level of educational attainment beyond high school. Black master’s degree holders earn just $0.28 more per hour than white bachelor’s degree holders, for instance, according to an analysis by the Economic Policy Institute.
The Economic Policy Institute, an independent nonprofit think tank that studies economic trends, looked at the pay of CEOs at the 350 largest companies in the U.S. each year by revenue. One finding: Compensation was $1.7 million in 1978 and rose 1,322% to $24.2 million by 2020.
But the reduction in supply was met with increased demand as Americans started purchasing durable goods to replace the services they used prior to the pandemic, said Josh Bivens, director of research at the Economic Policy Institute. “The pandemic put distortions on both the demand and supply side of the US economy,” Bivens said.
Daniel Costa, director of immigration law and policy research at the Economic Policy Institute in Washington, D.C., said that the U.S. government is failing to meet basic labor standards and provide basic rights to workers in the growing H-2A and H-2B visa programs. The H-2A visa program—the main focus of the hearing—is for seasonal jobs in agriculture, while the H-2B program is for seasonal jobs outside of agriculture.
“Although migrants coming to the United States through temporary work visa programs are legally authorized to work, they are among the most exploited laborers in the U.S. workforce because employer control of their visa status leaves many powerless to defend and uphold their rights,” Costa said. The flaws in the H-2 visa programs are systemic and structural, he said, listing abuses like charging workers exorbitant recruitment fees, keeping them in debt bondage, underpaying workers and allowing abuses to occur, as seen in the Operation Blooming Onion case.
As Josh Bivens of the Economic Policy Institute has pointed out, corporations are not just passing on cost increases to customers; they’re padding their profits as well. Profits account for over half of the recent increase in prices, well above the historical average of 11 percent.
And because that number has stayed stuck while prices keep rising, the Economic Policy Institute warned that the federal minimum wage now has less actual spending power than at any point in the last 66 years.
The federal minimum wage has not changed since 2009, and the Economic Policy Institute reported that the value of the minimum wage is worth 27 percent less than it was worth 13 years ago.
“A national $15 minimum wage would raise the incomes of tens of millions of workers, including servers in restaurants, grocery store employees and essential health care workers—as many as 2 million direct care workers who provide long-term services and supports would benefit from a $15 minimum wage in 2025,” a piece published by the Economic Policy Institute stated.
The median wage for child-care workers in 2021 was $13.22 an hour, or about $27,500 a year. Almost all are hourly workers, and the benefits are limited—according to an analysis by researchers at the the Economic Policy Institute, only one in five has access to employer-sponsored health insurance, and only one in 10 has a retirement plan. With high turnover and lean staff, administrators have been forced to ask educators to work extra hours.
Most large corporations want access to politicians, so they spread their contributions across political parties and people with “very different” ideological approaches, according to John Schmitt, a senior economist at the Economic Policy Institute.
“They’re not using their time sitting with legislators to change their minds about abortion,” Schmitt told me. “They’re using the time to change the regulatory structure that affects their industries or to influence where federal, state [or] local funds go.”
“The brief love affair with essential employees saw its greatest flourishing in April and May of 2020,” said Dave Kamper, senior state policy coordinator for the Economic Policy Institute. “Unemployment numbers had hit a staggering high, and the whole country was on the same page about the risks of Covid and the importance of compensating workers who had no choice but face exposure.”
“We don’t seem to have a demand-generation problem today. People (including businesses and governments) are spending robustly, so, we don’t need to pump up aggregate demand,” says Josh Bivens, research director at the Economic Policy Institute.
Based on the chart, $7.25 in July 2009 the month of the last time the minimum wage was increased would be about $9.97 in June 2022 dollars using seasonally adjusted CPI. So,the $7.25 minimum wage is worth about 27% below its purchasing power in July 2009, as seen in our calculation and an analysis from the Economic Policy Institute.
Zipperer said that the minimum wage has fallen by about 40% since the 1960s, “even though we’re a much richer country than we were over 50 years ago, and workers are more than twice as productive as they were 50 years ago.”
According to the Economic Policy Institute, minimum wage is indexed in 18 states and in Washington, D.C., meaning it is “automatically adjusted each year for increases in prices.” Economic analyst David Cooper says that by indexing minimum wage, the hourly salary never loses its value — and it’s written into law that the wage will rise by a certain amount depending on a specific formula, so politicians are not deciding the number.