Media clips
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Lawrence Mishel, the president of the Economic Policy Institute, responded to my email asking for his take on Piketty:
“We’d take the perspective that this phenomenon is related to the suppression of wage growth so that policies which generate broad-based wage growth are an antidote. The political economy is such that the political power to enact those taxes also requires a mobilized citizenry and institutional power, such as a robust labor movement.”
The New York Times January 29, 2014 -
Many owners who supported a wage hike say they don’t believe their workers can live on minimum wage and already pay them more. About 95% of respondents agreed that $7.25 is not a living wage and only 7% said they pay any of their workers that hourly rate or the minimum set by their state, which can be higher.
But more than 20% said they pay some employees between $7.25 and $10.10 an hour. That means if a federal wage hike is passed, these small business owners would have to raise wages for employees in that range.
There are currently 1.6 million workers who earn the federal minimum wage, according to the Congressional Research Service. And the liberal-leaning Economic Policy Institute estimates that an additional 17 million make between $7.25 and $10.10 and would see wages increase as well.
CNNMoney January 29, 2014 -
It’s about time to raise the minimum wage, at least according to 600 economists.
The group, which includes seven Nobel laureates, attached their name to a letter released earlier this month by the Economic Policy Institute urging lawmakers to raise the minimum wage to $10.10 an hour. In the two weeks since the left-leaning think tank first published the letter, the list of signatories has grown from 75 to more than 600.
President Obama is expected to push for an increase in the minimum wage during his State of the Union address Tuesday. In his speech last year, Obama called on Congress to boost the federal minimum wage from $7.25 an hour to $9 an hour. Senate Democrats proposed increasing the minimum wage to $10.10 — a measure Obama later said he backed — but the bill is still stalled in Congress.
The Huffington Post January 29, 2014 -
The simple economic theory of wage formation would argue that workers must be getting increasingly unproductive. That is, if you’ve studied this corner of economics, you may recall the assertion that your hourly wage is equal to your “marginal product,” meaning the dollar value your work adds to the firm’s output. Now, this theory applies to the average worker, so it entertains differences in real wage trends across the wage scale, explaining them by referring to differences in the marginal product of the losers versus the winners.
But there are a lot of problems with the theory. First, even at the average, in recent years real compensation has grown more slowly than productivity. This dynamic, by the way, is behind the historically large decline in labor’s share of national income, a trend that is wholly inconsistent with conventional marginal product theory (which assumes constant income shares for labor and capital or profits).
Second, as the Economic Policy Institute recently pointed out — and it has carefully tracked the “real” wage story for decades — even in the lowest fifth of the wage scale, workers have become more highly educated. The institute’s analysis reveals that since the late 1960s, the share of low-wage workers with at least some college has increased from 17 percent to 46 percent.
The New York Times January 29, 2014 -
Labor advocates are agitating for a boost to that lower wage, but they’re facing off against a more influential restaurant lobby, which paints a pretty bleak picture of the impact a wage hike would have on its industry. According to the National Restaurant Association, an increase in the subminimum wage would raise menu prices and cause restaurants to cut service jobs. Plus, the group says a pay raise couldn’t come at a worse time as businesses struggle to recover from the recession.
But there is evidence—from states that don’t have a separate, lower wage for tip-earning workers—that the restaurant owners are wrong to make such a dire and definitive case.
Seven states—Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington—don’t have a tipped wage at all: The minimum wage is the minimum wage for everyone. (Nineteen states follow the federal subminimum wage, and the rest are somewhere in between).
“You can … look anecdotally to the experiences of California and Washington and Oregon, where the restaurant industry is doing very well, even though those states don’t even have a tipped minimum wage,” said David Cooper, an economic analyst at the left-leaning Economic Policy Institute.
National Journal January 29, 2014 -
The unemployment rate drastically understates the weakness of job opportunities, because it does not include “missing workers,” who are neither employed nor looking for work because of scarce job openings, according to the liberal-leaning Economic Policy Institute in Washington, D.C.
McClatchy January 29, 2014 -
“Using the deficit for something like unemployment insurance—that’s a multiplier—is a good thing,” says Josh Bivens, the director of research and policy at the Economic Policy Institute. “They’re shock absorbers, not bad things.” Unemployment benefits tend to get spent right away on needs like groceries, for example.
Mother Jones January 29, 2014 -
Ellison personally handed the president a letter on the matter last month. Just last week, at an event hosted by the left-leaning Economic Policy Institute, he publicly questioned Jason Furman, the chairman of Obama’s Council of Economic Advisers, on whether Obama planned to issue the order. Ellison later criticized Furman for what he felt was an evasive answer.
The Huffington Post January 29, 2014 -
During tonight’s State of the Union address, President Barack Obama will announce an executive order to raise the minimum wage to $10.10 an hour for federally contracted workers, according to a White House statement.
Economists at the leftist Economic Policy Institute estimate “1 in 5 employees working for private firms for the benefit of the federal government are likely working for poverty wages.” The move comes as the president has continued to push Congress to raise the minimum wage for all workers, which has met resistance from Republican leaders.
Guests:
Ross Eisenbrey, Vice President, Economic Policy Institute (a think tank focused on low- and middle-income workers);
NPR January 29, 2014 -
The increase directly and indirectly could raise pay for up to 28 million workers, according to estimates from the liberal Economic Policy Institute.
The legislation has received backing from 75 economists, but its passage remains a political long shot.
CNNMoney January 29, 2014