To: All 2016 candidates

Section 1: Labor market institutions, labor standards, and business practices

Several of these policies concern the anti-worker business practices, eroded labor standards, and weakened labor market institutions that have reduced workers’ individual and collective power to bargain for higher wages in recent decades. To raise America’s pay, policymakers should:

Raise the minimum wage

In 2015, the inflation-adjusted minimum wage is about 25 percent below what it was in 1968—even though productivity has doubled and the education and skills of those in the bottom fifth have greatly improved. Moving the minimum wage to $12 by 2020 would benefit about a third of the workforce directly and indirectly.

Update overtime rules 

Accomplished

Strengthen collective bargaining rights

The single largest factor suppressing wage growth for middle-wage workers over the last few decades has been the erosion of collective bargaining, which has affected both union and nonunion workers alike. Making it easier for willing workers to form unions, increasing penalties for corporate violations of labor laws, and halting and reversing the spread of so-called right-to-work laws will help give workers the leverage they need to bargain for better wages and benefits and set high labor standards for all workers.

Regularize undocumented workers

Undocumented workers are vulnerable to exploitation by unscrupulous employers. Consequently, they earn lower wages than workers who have greater access to legal protections and are able to switch jobs more readily. Executive actions to regularize undocumented workers, such as those the Obama administration is pursuing, or comprehensive immigration reform that provides a path to citizenship, are polices that will enable these workers to earn higher wages. Regularizing undocumented workers will not only lift their wages, but will also lift wages of those in the same fields of work.

Provide earned sick leave and paid family leave

The United States has failed to adopt new labor standards that respond to emerging needs. In particular, we need updated standards to assist workers and their families in achieving a better balance between work and family. Providing earned sick leave and paid family leave would help to raise workers’ pay—and would give them more economic security.

End discriminatory practices that contribute to race and gender inequalities

Generating broader-based wage growth must also include efforts to close race and gender inequities that have been ever-present in our labor market. We need consistently strong enforcement of antidiscrimination laws in the hiring, promotion, and pay of women and minority workers. This includes greater transparency in the ways these decisions are made and ensuring that the processes available for workers to pursue any violation of their rights are effective.

Support strong enforcement of labor standards

The enforcement of labor standards in the United States is so weak that hundreds of thousands of employers routinely fail to pay minimum wage or overtime, fail to protect employees from workplace hazards, fail to pay payroll taxes or worker’s compensation premiums, or fail to provide family and medical leave. Wage theft alone costs employees tens of billions of dollars a year, and lack of worker’s compensation coverage, unemployment insurance coverage, or Social Security coverage can cost them billions more. More enforcement and tougher penalties are needed to deter these violations, and access to the courts must be available to injured workers. Employers’ growing use of forced arbitration—where employees, as a condition of employment, give up their right to sue in the public courts and are shunted into secret, private proceedings that can both be more costly and provide poorer remedies—must be stopped and reversed. As government enforcement resources decline, it is vital that workers have effective remedies in state and federal courts for labor standards violations.

Section 2: Full employment

A necessary condition for ending wage suppression is economic policy that ensures every worker who wants a job can find one. The reason for this is simple. In the absence of full employment, employers do not need to offer significant wage increases to attract and retain employees, as the number of willing workers is far greater than the number of available jobs. To restore full employment and raise America’s pay, policymakers should:

Prioritize very low rates of unemployment when making monetary policy

Federal Reserve Board policymakers are now considering when and how much to raise interest rates. In essence, a decision to raise interest rates is a decision to slow the economy and weaken job and wage growth. Given that wages have stagnated and that many communities have yet to adequately benefit from the recovery, it is imperative that monetary policymakers keep their foot off the brakes and allow the recovery to proceed as quickly as possible. Policymakers should not seek to slow the economy until growth of nominal wages (wages unadjusted for inflation) is running comfortably above 3.5 percent (which is consistent with ongoing productivity growth of 1.5 percent and a target inflation rate of 2 percent).

Enact targeted employment programs and undertake public investments in infrastructure to create jobs

To obtain full employment for all, we need policies that can direct jobs to particular areas that suffer from high unemployment even when the national labor market is largely healthy. These policies can include public and nonprofit employment programs that create jobs by meeting unmet needs. Additionally, undertaking a sustained (for at least a decade) program of public investment can create jobs, raise our productivity, and spur economic growth.

Reduce our trade deficit by stopping destructive currency manipulation

Many of our major trading partners engage in intentional currency manipulation—buying up dollar-denominated assets on global financial markets simply to depress the value of their own currency. This depressed currency value makes imports cheaper in the U.S. market and U.S. exports more expensive. This results in a larger trade deficit and slower job growth. Eliminating currency manipulation could reduce the U.S. global trade deficit by between $200 billion and $500 billion each year, which could increase overall U.S. GDP by between $288 billion and $720 billion and create between 2.3 million and 5.8 million U.S. jobs. Congress and the president should reject any trade treaties that do not have enforceable provisions to combat currency manipulation.

Section 3: The top 1 percent

A final piece of the puzzle for raising wages for the vast majority is to restrain the growth of top 1 percent incomes. The major forces behind the doubling of the top 1 percent’s income share since 1979 have been the expansion of the finance sector (and escalating pay in that sector) and the remarkable growth of executive pay. Economic research indicates that the increased incomes in finance and for executives do not reflect a corresponding increase in their efficiency. Rather, they are simply a zero-sum redistribution away from the rest of the economy and toward finance and corporate managers. Restraining the growth of such income will not adversely affect the size of our economy. It will instead allow the vast majority to claim a larger share of economic growth. To raise wages for the vast majority, policymakers should:

Use the tax code to restrain top 1 percent incomes

Tax preferences for executive pay can be eliminated or their use tied to the executive’s firm giving wage increases equal to productivity growth. Others have recommended tying corporate tax rates to the ratio of executive pay to median worker pay, as well as changes to corporate governance procedures. Additionally, imposing a financial transactions tax can steer investments toward productive uses and away from speculation and restrain unproductive financial activity and pay. Finally, higher top marginal tax rates can reduce the incentive for financial-sector professionals and corporate managers to rig markets or suppress wage growth to make more income flow their way.

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Right now, Washington, D.C., is considering a ballot measure to raise the minimum wage to $15 by July 2020.

EPI research shows that 114,000 workers will see their wages increase if D.C. raises its minimum wage to $15.

• 98 percent of impacted workers are 20 years old or older
• 53 percent of impacted workers are women
• 47 percent of impacted workers are African American

In the absence of congressional action to raise the minimum wage, it is incumbent on states and local communities to increase the wages of low-wage workers.
One of the strengths of this ballot measure is that it eliminates the subminimum wage for tipped workers such as waiters and bartenders. This wage has been frozen at $2.13 federally since 1991. EPI research shows that tipped workers are twice as likely to live in poverty as non-tipped workers.

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Statement from EPI Vice President Ross Eisenbrey:

“The U.S. Department of Labor’s new rule increasing the number of salaried workers entitled to overtime pay will protect millions of Americans from overwork and make sure they get paid their fair share when they work more than 40 hours in a week. It will raise wages and create hundreds of thousands of jobs, as employers shift hours from overworked and underpaid managers to hourly employees who badly need more work and more income.

“Most Americans don’t even know that being salaried isn’t reason enough to be denied overtime pay. This new rule makes it clear that whether you’re salaried or hourly, blue collar or white collar, even if your boss calls you a manager or a team leader, if you’re not paid at least $910 per week, you have to be paid time-and-a-half for each hour you work beyond 40 in a week.

“It’s exciting to see government working for working people and their families. The rule will give millions of workers more free time and it will put billions of dollars into the wallets of struggling middle class workers who need every penny they earn. Congratulations to President Obama, and the Department of Labor and its own hard-working employees, for a job well done.”

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Today, May 5, stand in solidarity with Verizon workers who are on strike—fighting for fair pay and benefits.

Despite making $39 billion in profits over the last three years and paying an effective tax rate of negative 2.5 percent from 2008 to 2013, Verizon—a wealthy multinational corporation—has been looking for ways to further enrich its executives and stockholders at the expense of its workers.

Verizon has already offshored 5,000 jobs to the Philippines, Mexico, the Dominican Republic, and elsewhere. It is pushing to outsource more work to low-wage contractors—threatening the job security of current employees.

Further, Verizon is attempting to cut employees’ benefits, including freezing pensions at 30 years of service.

At a time when CEOs are paid 300 times more than the typical worker, it is unreasonable that Verizon is attempting to slash the job and retirement security of its East Coast workers.

Verizon workers are striking to preserve strong union jobs for themselves and those who come after them. It is an important strike that will set the terms of the relationship between the CWA and Verizon for years to come and one that has implications for all workers. It is thus important for us to stand in solidarity with Verizon strikers.

To: Congress

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Over the last several decades, employers have moved away from pension-based retirement plans toward the 401(k) savings model. Participation in these do-it-yourself retirement savings plans is highly unequal across income groups because the system is stacked against those who can least afford to contribute and to bear investment risks. Lower-income workers get skimpier matching contributions from employers and often receive little or no tax benefit, but still face a penalty if they need to tap their savings early.

According to new research by the Economic Policy Institute, nearly nine in 10 families in the top income fifth had retirement account savings, compared with fewer than one in 10 families in the bottom income fifth (see the first figure below).

Additionally, families in the top income fifth accounted for 63 percent of total income, but 74 percent of total savings in retirement accounts (see the second figure below) illustrating the degree to which 401(k)s favor those with higher incomes.

This disparity across income groups highlights a serious policy failure that is exacerbating income inequality as well as the existing retirement security crisis with two-thirds of seniors relying on Social Security for a majority of their income.

The policy solution to the retirement security crisis is to protect and expand Social Security for millions of Americans, not cut our only universal guaranteed source of retirement income.

October 2015

To: Rachel Maddow and MSNBC

On Friday, November 6, MSNBC will host a Democratic presidential forum moderated by Rachel Maddow, and we want to hear the candidates’ plans to generate robust wage growth and ensure that America’s prosperity is broadly shared.

Join Demos and EPI in calling on Rachel Maddow and MSNBC to make raising wages the central theme of the presidential forum.

October 2015

To: Rachel Maddow and MSNBC

On Friday, November 6, MSNBC will host a Democratic presidential forum moderated by Rachel Maddow, and we want to hear the candidates’ plans to generate robust wage growth and ensure that America’s prosperity is broadly shared.

Join EPI and Demos in calling on Rachel Maddow and MSNBC to make raising wages the central theme of the presidential forum.

August 2015

Big corporations are trying to stop millions of Americans from getting a raise.

That’s because the National Retail Federation, the National Association of Home Builders, and other corporate lobbyists are trying to run out the clock. Their first step: get the Department of Labor to extend the public comment period by 90 more days. If these corporate lobbyists succeed, they’ll stop the new overtime pay rules from taking effect before the holidays—and possibly delay implementation indefinitely.

Tell the Department of Labor: Don’t delay overtime pay one day more.

August 2015

Big corporations are trying to stop millions of Americans from getting a raise.

That’s because the National Retail Federation, the National Association of Home Builders, and other corporate lobbyists are trying to run out the clock. Their first step: get the Department of Labor to extend the public comment period by 90 more days. If these corporate lobbyists succeed, they’ll stop the new overtime pay rules from taking effect before the holidays — and possibly delay implementation indefinitely.

Join the Economic Policy Institute, Democracy for America, and Robert Reich to tell the Department of Labor: Don’t delay overtime pay one day more.

Thank you for joining the fight against income inequality.

Robert Reich
Former Secretary of Labor

May 2015

To: U.S. Department of Labor

Right now in America, salaried workers earning $23,660 per year, or just $455 per week, can be denied overtime pay, even when made to work 60 or 70 hours a week. In the coming days, the Department of Labor is expected to introduce a proposed rule change to allow millions more workers to become eligible for overtime.

The Economic Policy Institute is strongly urging the DOL to increase the overtime salary threshold to at least $50,000, which would make 6.1 million additional American workers eligible to receive overtime pay.

Any significant increase will be a victory for American workers but will likely be met with outrage by many in the business community. Even prior to the DOL’s release of the new rules, the National Retail Federation is opposing the rule change and misrepresenting the positive impacts it would have on millions of salaried workers and their families.

Tell the DOL to take a strong stance on overtime and help 6.1 million workers or more. Together we can take on Big Business and increase the pay of millions of American workers.