Statement | Wages, Incomes, and Wealth

The WAGE Act will help strengthen worker protections, raise wages, and improve working conditions

On Sept. 16, 2015, Sen. Patty Murray (D-Wash.) and Rep. Robert C. “Bobby” Scott (D-Va.) introduced the Workplace Action for a Growing Economy (WAGE) Act, legislation to strengthen protections for workers who want to raise wages and improve workplace conditions. The WAGE Act would amend the National Labor Relations Act to help ensure workers are able to have a voice in the workplace and would crack down on employers who break the law when workers exercise their basic right to collective action. In a press conference announcing the legislation, Murray and Scott were joined by AFL-CIO President Richard Trumka and Ross Eisenbrey, Vice President of the Economic Policy Institute.

Statement from Ross Eisenbrey:

Working Americans—factory workers and insurance clerks, adjunct professors and restaurant workers alike—are having a hard time even making ends meet, let alone getting ahead or saving for their retirement. Their pay, adjusted for inflation, has long been flat. Why is that?

It’s not because the economy hasn’t been growing. And it’s not because companies are struggling—profits are at all-time highs.

Wages haven’t stagnated for the vast majority because growth in productivity (or income and wealth creation) collapsed. Productivity has risen substantially in recent decades, and national income and wealth have too. Each worker creates, on average, 72 percent more income per hour than in 1973, but hourly compensation for the typical worker increased only 9 percent.

Where did all that income go, if not to workers? It’s gone into the pockets of extraordinarily highly paid managers and owners of capital. Corporations have done everything they can to hold down labor costs, by freezing wages and cutting benefits. And over the past 15 years the problem has gotten worse.

There are many reasons workers aren’t getting the share of national income they got 40 years ago, but they all boil down to one thing: The bargaining power of America’s workers is far weaker than it used to be. The loss of unions and collective bargaining coverage, high rates of unemployment and underemployment, and the offshoring of U.S. production have left workers powerless to demand and receive their fair share of national income. The loss of union strength is by far the most important single factor.

Rebuilding our collective bargaining system is an extremely important task for regenerating robust wage growth and restoring our democracy. The erosion of collective bargaining has been the major cause of wage stagnation for middle-class workers (wages have been stagnant for both blue-collar and white-collar workers for the last dozen years) and has been an important force in driving up overall inequality. It has affected union and non-union workers alike, because collective bargaining sets wage standards in industries and occupations. Union representation also provides the main vehicle for working Americans to have a voice in legislative and political matters, helping to offset the power of money in politics.

The Workplace Action for a Growing Economy (WAGE) Act—introduced today by Sen. Patty Murray (D-Wash.) and Rep. Robert C. “Bobby” Scott (D-Va.)—takes the first steps toward rebuilding our collective bargaining system. It does this by ensuring union and non-union workers alike have a voice in the workplace and by taking action against employers who act illegally when workers exercise their fundamental right to take collective action.

When, for example, non-union employees at a recycling plant complain about their pay or safety, their employer will face a very different calculus about the potential costs and benefits of illegally firing them once the WAGE Act is enacted. Today, even if the terminated employees know to complain to the National Labor Relations Board (NLRB), it might be years before they get their jobs back (during which time the victims of this illegal retaliation might have no income at all), and the employer will get off without any fine or penalty. The firm’s worst-case scenario is only to pay partial backpay years later—even less if the NLRB settles the case, as it usually does. Many firms evade even that.

Under the WAGE Act, firing employees who assert their right to act together for better wages or working conditions would be punished. The firm would owe triple backpay to the employees, who wouldn’t have to rely on the NLRB for a remedy (although they could); they’d have the right to sue the employer in court and get a swift order to be put back to work with no loss of wages or benefits. In addition, the employer would face a $50,000 fine, and a $100,000 fine if it was a second offense.

This would be a huge change. Today, you pay a bigger fine for fishing or hunting out of season than you do for illegally firing employees, an act that can put terrible stress on them and their families, ruin their health, and wreck their financial security.

For wages and working conditions to improve, it has to be safe for employees to make demands of their employers. The WAGE Act will do much to accomplish this.


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