Arizona is one of 18 states hiking the minimum wage on New Year’s Day, with the increases ranging up to $1 an hour in Maine, according to the Economic Policy Institute, which favors wage hikes. The federal minimum wage of $7.25 an hour has not increased since 2009, the research group noted.
Arizona Republic | December 28, 2017
Left-leaning think tank Economic Policy Institute estimates that the increases will benefit 4.5 million workers. In the absence of Congress raising the wage floor, states and cities are tasking themselves with paying the lowest rung of workers a bit more. “Increasing the minimum wage is a crucial tool to help stop growing wage inequality, particularly for women and people of color who disproportionately hold minimum wage jobs,” according to EPI economic analyst Janelle Jones.
Yahoo News | December 28, 2017
Ten states that passed minimum wage hikes will see those go into effect at the start of 2018, with some 3.9 million workers affected, according to a report by a left-leaning think tank. California’s $0.50 increase to $11 an hour will have the broadest impact, raising the pay of more than 2 million workers, the Economic Policy Institute said in a report released earlier this month. Maine’s $1 bump to $10 an hour is the highest increase.
Reuters | December 28, 2017
“I think it is simply a statement of fact that Secretary Acosta and the people in the political side of the Labor Department who pushed that rule, which was a wonderful Christmas present to the National Restaurant Association, didn’t want the public to understand what kind of transfer we’re talking about,” David Weil, the WHD chief from 2014-2017, told me. Weil called an outside analysis from the Economic Policy Institute finding that the new regulation would transfer $5.8 billion a year from workers to employers a “very reasonable and conservative estimate.”
Bloomberg BNA | December 27, 2017
In 2015 and 2016, $2 billion came back to workers in 39 states, in the form of recovered wages. But many advocates say that falls far short of solving a problem that costs up to $50 billion a year. “Workers continue to lose staggering amounts in wages every year,” said Celine McNicholas, one of the authors of a report from the Economic Policy Institute, a left-leaning think tank. That underpayment, which advocates call wage theft, also has ripple effects through the larger economy by keeping money out of the hands of consumers. “Low-wage workers are particularly susceptible to wage theft. Those are the same folks who would be likely to spend that income,” McNicholas said. (whole story)
CBS News Moneywatch | December 27, 2017
The left-leaning Economic Policy Institute think tank estimated in a report last week that the 18 states that will boost their respective minimum wages in 2018 will effectively require employers to distribute more than $5 billion in additional pay to 4.5 million workers. (EPI cited throughout)
U.S. News and World Report | December 27, 2017
Employers are “trying to hide the fact that it’s a huge windfall to restaurant owners,” said Heidi Shierholz, senior economist and director of policy for the Economic Policy Institute, a left-leaning think tank based in Washington, D.C. Ms. Shierholz, who served as chief economist for the Labor Department during the Obama administration, pointed to previous studies that have shown employers frequently pocket tips illegally. “It opens up a new avenue for wage theft,” she said. This month, she estimated the proposed rule would allow employers to pocket $5.8 billion in tips — about 16 percent of all those earned by tipped workers in 2016, according to her analysis of reported tips on tax returns.
Pittsburgh Post Gazette | December 26, 2017
Starting in 2018, 18 states will increase their minimum wage. EPI says that will provide over $5 billion in additional wages to 4.5 million workers, with increases ranging from $0.35 in Michigan to $1.00 in Maine. This is a trend to watch, because minimum wage increases can help boost average earnings data at the margin. And since low-income earners have a high propensity to consume – translated from econo-speak, they spend more of each dollar they earn – high floors can also matter for consumer spending. More on that here.
Bloomberg | December 26, 2017
The left-leaning Economic Policy Institute estimates that the new rule would allow employers to seize about $5.8 billion in tips a year, taking an average of about $1,000 of every server’s income. Whether that money winds up in the back of the house or the owners’ back pockets will depend entirely on the owner’s integrity.
St. Louis Post Dispatch | December 24, 2017
More broadly, while economic evidence suggests that cutting taxes on corporations does lead to some trickle-down benefits for workers, it also suggests that the sums are smaller than the White House has projected and would likely take some time to show up in paychecks. “These raises have zero economic connection with the tax cuts,” said Josh Bivens, an economist at the Economic Policy Institute, a left-of-center think tank. “We know this because the theory linking cuts to wage gains requires other mechanisms to fire first—mainly the rise in capital investment and productivity growth,” which would “permanently reset salaries at higher levels, not get firms to bestow one-time bonuses.” Businesses would need to use their additional funds to invest in machinery, equipment, and research and development, making their workers more productive, and then paying those workers for that additional productivity, in other words. Of course, these companies could claim they are issuing payouts now in anticipation of that chain of events, but the real process would take some time. (Josh quoted throughout)
The Atlantic | December 22, 2017
How big of a deal is this? Maddeningly, the Labor Department didn’t estimate the economic impact, as it is required to do (and a legal challenge on those grounds could well stop this). The department said that it lacked the data to compute how much money would be involved, though it did calculate that there are “up to 1,298,231 tipped workers in 206,770 full-service restaurants, and 40,095 drinking places” around the country. The left-leaning Economic Policy Institute helpfully crunched some numbers; it estimates, loosely, that restaurant owners could pocket $5.8 billion a year under the proposed change, or 16% of the estimated $36.4 billion in tips. The group did not estimate how much of the tips would get redistributed from servers to kitchen workers, but the amount of the transfer would likely be significant in an industry notable for low pay, long hours and existing problems with wage theft.
Los Angeles Times | December 21, 2017
“What the last few decades have shown us is that corporations are quicker to pull the trigger on layoffs, less likely to pay workers as much and less likely to contribute taxes,” said Josh Bivens, research director at the Economic Policy Institute, a left-leaning think tank. “I don’t think they got mean overnight. But changes in external conditions — globalization and the assault on unions — meant that they could claim a bigger piece of the pie.”
The Washington Post | December 18, 2017
TIP-POOL ESTIMATE SINKS: The left-leaning Economic Policy Institute revised downward its estimate of the economic impact of a tip-pooling rule change on Thursday. The group estimates $5.8 billion in workers tips will be lost to employers rather than its original estimate of $6.1 billion. The change comes from taking into account “more protective state laws” against tip crediting in Montana and Washington. DOL has yet to publish a quantitative analysis of the proposed rule change, which would allow employers to redistribute tips to back-of-house employees. Read the report here.
Politico | December 18, 2017
Trump’s Labor Department Says Employees Don’t Own Their Tips
Truthout/Michael Arria
Trump’s tip-pooling move would give more power to businesses in an industry where wage theft is already rampant. The Economic Policy Institute (EPI) recently released a report that assessed minimum wage violations in the 10 most populous US states. The EPI found that 2.4 million workers are reportedly paid less than the minimum wage in their state. This amounts to about $8 billion in stolen wages every year and, if these states’ numbers are in line with the rest of the country, the national number is probably around $15 billion. According to some studies, one in five workers is already having their tips stolen. This reality is set to get worse with Trump’s Labor Department making decisions and a powerful industry group guiding policy.
Truthout | December 18, 2017
“Consider a common employment arrangement in which a staffing agency hires a worker and assigns her to work at another firm. The staffing agency determines some of the worker’s terms of employment (such as her hiring and wages), but the other firm directs her daily tasks and sets her schedule and hours,” Marni von Wilpert, of the left-leaning Economic Policy Institute, explained in a blog post.
CBS Moneywatch | December 18, 2017
However, there is no guarantee employers would redistribute pooled tips and critics say economic models show they will likely pocket them instead. “We estimate that under this rule, employers would pocket $6.1 billion in tips earned by tipped workers each year,” according to a new analysis from nonpartisan think tank the Economic Policy Institute. This equates to 17% of the estimated $36.4 billion in tips earned by tipped workers annually. “The big lie is that it will lead to restaurants sharing these tips with back of house,” Heidi Shierholz, senior economist and director policy at the Economic Policy Institute said. “The biggest effect of it will be employers being able to control tips and take a big chunk of them as long as they pay the minimum wage.” The proposal would require staff to make minimum wage but allow tips to be pooled beyond that.
Market Watch | December 14, 2017
Critics of the Trump administration’s proposed rule say that it goes further than just allowing employers to include nontipped workers in the tip pool. They say employers could do whatever they want with the tips—they could keep a portion for restaurant improvements or share them with salaried managers. On Dec. 12, Sen. Jeff Merkley, D-Ore., and Rep. Keith Ellison, D-Minn., joined worker advocates in a press conference on Capitol Hill to protest the rule. The Economic Policy Institute has tweeted against the proposed rule.
Society for Human Resources | December 14, 2017
Democracy Journal/Thea Lee and Hunter Blair
Democracy Journal | December 14, 2017
The rule was proposed by the Department of Labor on Dec. 5 and, at face value, seems like a fairly straightforward way to enable tip-sharing. Restaurants would be able to pool tips, so they could be split among servers, dish-washers, and cooks. But, as written, the rule doesn’t require that employers distribute those pooled tips to workers at all. In fact, according to a report by the Economic Policy Institute, the rule would allow employers to legally pocket those tips. (EPI cited throughout)
Bustle | December 13, 2017
The Economic Policy Institute, a progressive research nonprofit, released a report Tuesday arguing the proposal would allow employers to legally pocket tips at an estimated $6.1 billion annually. The National Employment Law Project released a statement the same day claiming the rule would allow for wage theft in tipped industries.
Inside Sources | December 13, 2017
Using W-2 data and economic logic, the Economic Policy Institute estimated in a report issued Tuesday that the rule will lead employers to steal about $6.1 billion in workers tips a year.
The Hill | December 13, 2017
$6.1 billion
President Trump’s Department of Labor has proposed a rule that would allow restaurants to take the tips from servers and redistribute them among un-tipped staff such as dishwashers. But it doesn’t require that those tips be redistributed among un-tipped staff — so legally, as long as the tipped employees are paid minimum wage, the restaurants can just keep the confiscated money. The Economic Policy Institute estimates that under the new rule, employers would pocket about $6.1 billion in employees’ tips annually, or some 16.9 percent of all annual tips. [Economic Policy Institute]
FiveThirtyEight | December 13, 2017
DEMOCRATS RALLY AGAINST TIP-POOLING: Democratic congressmen and worker advocates will protest the Trump administration’s plan to overturn a rule against tip-pooling today on Capitol Hill. Sen. Jeff Merkley (D-Ore.) and Rep. Keith Ellison (D-Minn.) will appear at a press briefing alongside representatives from the Restaurant Opportunities Center, the Economic Policy Institute, and NELP. Forty-six Democratic lawmakers signed a letter Monday calling on the DOL to extended the comment period on the tip rule change. Over 200 organizations also signed a separate letter asking for a 30-day extension.
Politico | December 13, 2017
“Under the administration’s proposed rule, as long as tipped workers earn minimum wage, employers could legally pocket those tips,” said analysts with the Economic Policy Institute. “We estimate that under this rule, employers would pocket $6.1 billion in tips earned by tipped workers each year.” (EPI cited throughout)
The Washington Examiner | December 13, 2017
The Obama administration change banned tip-pooling even for businesses that pay the federal minimum wage, and the Trump administrations now wants to eliminate the Obama administration rule and allow employers once again to pool tips only for workers who are paid the tipped minimum wage. According to the Economic Policy Institute (EPI), employers could keep between $563 million and $14.2 billion in tips annually. The EPI’s best estimate is a loss to tipped workers of $6.1 billion. (EPI cited throughout)
Wall St. 24/7 | December 13, 2017
Does rising income inequality reduce economic growth? EPI’s Josh Bivens takes another crack at this hypothesis today, starting with some (uncontroversial) evidence that the rich save more than the non-rich:
Mother Jones | December 13, 2017
Earlier this month, the Trump administration announced a proposed new rule that would allow bosses to legally steal their workers’ tips. A new analysis published Tuesday by the Economic Policy Institute found the rule would lead to employers pocketing $6.1 billion in workers’ tips—or 16.9% of the estimated $36.4 billion in tips earned annually by tipped workers—without any legal assurance that workers would see their money again.
St. Louis Post Dispatch | December 13, 2017
This ingrained feeling is supported by the data: the Economic Policy Institute analyzed the wage gap between black women and white women, and found that black women are in fact working harder to get less. “Black women work more hours than white women, and have increased work hours by 18.4% since 1979, and continue to increase their annual hours and weeks worked per year,” the study showed. Despite the increase of hours work each year, black women are paid only 63% of what white men make, and 17% less than what their white women counterparts bring home.
Fast Company | December 8, 2017
About 56 percent of private-sector nonunion employees, or more than 60 million workers, are subject to forced-arbitration agreements, according to research from the Economic Policy Institute, a left-leaning think tank.
The Washington Post | December 7, 2017