4 ways to improve America’s labor market

A 30-year backlog of policies has created staggering income inequality. Here's how we can address them

Topics: 1 percent, Next New Deal, Occupy Wall Street, Unemployment, Business, Barack Obama, Labor Market, ,

4 ways to improve America's labor market (Credit: AP/Carolyn Kaster)
This originally appeared on Next New Deal.

Next New Deal Now that the election is over, our hope is that we can finally move beyond the vacuous invocations of an imaginary middle class where everyone is in the same boat. It’s time to get real about the concrete policies needed to take on the multiple inequalities that run deep through the U.S. labor market. And we’re not talking about the “skills mismatch,” another red herring routinely flung into this debate by both sides (including by President Obama as recently as the last week of the campaign).

What we’re talking about is a broad, multi-year agenda to give America’s workers a living wage and voice on the job and to take on the continuing exclusion of workers of color, immigrants, and women from good jobs. The media may have discovered inequality last year with the surprise emergence of Occupy Wall Street, but in truth, there is a 30-year backlog of policies to fix the extreme maldistribution of wages and opportunity in the labor market.

First, we have to make our core workplace standards much stronger – whether it’s in terms of wages, health and safety, or voice on the job. That means raising the minimum wage so that it’s a meaningful floor again (some good news: voters in Albuquerque, San Jose, and Long Beach raised theirs last week). It means updating health and safety regulations written in the 1970s. And it means restoring the right to organize, because at this point, virulent employer opposition and retaliation has rendered U.S. labor law obsolete. Fifty-eight percent of U.S. workers say they would like to be represented by a union, but only 11.8 percent actually are. This is what happens when one out of four workers is fired illegally for attempting to organize a union while employers face minimal penalties.

Second, we have to take on the profound reorganization of the American workplace. The poster child for precarious work is temp jobs – but subcontracting has had a much broader impact, as janitors, laundry workers, warehouse workers, security guards, food service workers, and millions of others have been outsourced to low-wage firms. A good model for a solution is California’s recent law making companies liable for minimum wage and overtime violations by their subcontractors, recognizing that end-user firms such as Walmart exert considerable control over working conditions down their supply chains.

Third, we have to double down on enforcement. A 2008 study of Chicago, Los Angeles, and New York found that 26 percent of low-wage workers were paid less than the minimum wage and 76 percent were underpaid or not paid at all for their overtime hours. Yet the number of federal wage and hour inspectors is still below 1980 levels, and it would take 131 years for OSHA investigators to inspect each workplace just once. Until employers face substantial costs to their bottom line (as is true in other bodies of law, such as environmental regulation and employment discrimination law), practices like wage theft, retaliation against workers trying to organize a union, and independent contractor misclassification will continue unabated.

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Fourth, we have to do a better job of leveraging the government’s capital. Public money touches millions of private-sector jobs, whether by purchasing goods and services for the government or by funding everything from schools and bridges to health care and social services. There are plenty of innovative models to ensure that this money results in good jobs, whether it’s responsible contracting policies (in California, Massachusetts, Connecticut, and Illinois), living wage laws (in more than 140 cities and counties), or accountable economic development policies (in Los Angeles, Pittsburgh, and New York City, among others).

Fifth, we have to explicitly break down systemic labor market exclusions of people of color, immigrants, women, the unemployed, and people with criminal records. For example, advocates are pushing the U.S. Department of Labor to finally end the exemption of home care workers from minimum wage and overtime protection, and cities across the country are passing “ban the box” policies to reduce hiring barriers for people with arrest or conviction records.

But we also have to challenge de facto exclusions. A good example is targeted hiring and training programs on publicly funded projects, which in our mind will be crucial to solving the escalating (and chronically under-reported) economic crisis in communities of color. A great example is Portland’s 2009 residential retrofitting program, which mandated living wages and local hiring from designated training programs. As of last year, the program’s workers earned median wages of $18 per hour; fully 84 percent were local residents, nearly half of them people of color. While unemployment is still at Depression-era levels in many black communities, we know what works to employ those still excluded from access to the labor market.

A final word on why we think these policies (and many others; see the long-form version here) are politically viable. In communities across the country, there is an undeniable thirst for justice on the job and investment in local communities. This is true not just for raising the minimum wage, which consistently polls in the 70-80 percent range, but also policies such as paid sick days, increased funding for elder care and child care, cracking down on wage theft, using taxpayer money to create living wage jobs, and restoring the right to organize.

(If you doubt support for organizing, consider the recent wave of strikes by Walmart workers, or New York’s taxi workers organizing for better pay even though they are independent contractors, or Palermo’s pizza workers in Wisconsin staying out on strike for three months and now pressuring Costco to boycott their employer.)

The real question is whether President Obama and Democrats in Congress understand that raising taxes on the top 2 percent is only the first step on a long road toward building a sustainable living wage economy in the U.S. Our hope lies in the growing recognition among progressives that it will take the pressure and power of social movements to convince him to walk that road with us.

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