The Real Costs of Right-to-Work

 

Max Rust of the Chicago Sun-Times has produced a concise overview of right-to-work laws and their impact on states and workers. In short, the picture is not pretty. In right-to-work states, wages are lower, infant mortality rates are higher, fewer people have health insurance, and the average level of education is lower. Several states, mostly in the South and Southwest, have had these laws in place since the 1940s. More recently, Indiana, Michigan, and Wisconsin have passed such laws.

Right-to-work laws hurt the ability of workers engage in collective bargaining. Yes, they do give a few people the freedom to avoid union dues. Many others, however, have seen hourly wages in these states go down over recent decades. Unions are far from perfect. In fact, today’s Chicago Sun-Times also features a great investigative article on the family of a local Teamsters’ official. Even so, unions enable workers to bargain for better wages and working conditions. If unions are so bad, why do corporations and billionaires participate in groups like the U.S. Chamber of Commerce, the Club for Growth, and ALEC? If the richest people in American can collaborate to protect their interests, shouldn’t working class and middle class Americans have the same right?

Good News on Jobs and Unhappy Workers

 

USA Today’s Susan Page recently interviewed Secretary of Labor Thomas Perez. She asked Perez about a paradox in the current economic recovery: unemployment is down with little increase in wages. Perez said that there is still “slack” in the market, which would mean that unemployment would have to go even lower to drive increased wages. He also discussed a White House Summit on Workers, which will take place on October 7, 2015. This sounds like good news, but what results will it bring? Perez captured the general mood of American workers this way: “They’re hard and falling behind.” Page cast this as a “disparity between the wealthy and the middle of the workforce.” I would respectfully disagree. From the Occupy protests to the ongoing Fight for 15, low wage working people are voicing their frustration and demanding justice in a way that the middle class is not. That said, most American (I’d guess 70-80%) are feeling anxiety and a lack of security. President Obama put it best when he said, “America needs a raise.”

Obama Gives America a Raise

 

During his last State of the Union Address, President Obama declared that “America needs a raise.” Yesterday, he acted on those words. The president announced that salaried employees (5 million Americans) making as much as $50,400 would be eligible for overtime. As Laura Clawson of Daily Kos puts it, employers will no longer be able to use exempt status (salaried employees) to keep from paying overtime. This move by the Obama Administration (if it’s not overturned by a court challenge) will either give employees more money or more time off. The 40 hour week will again become meaningful to millions of Americans.  It’s a good day for working people.

 

P.S.  President Obama is featured in The Huffington Post on his overtime reform.  The president express great confidence that he is doing the right thing for American workers:  “That’s how America should do business. In this country, a hard day’s work deserves a fair day’s pay. That’s at the heart of what it means to be middle class in America.”  I agree, but would add that what the president is doing will also help the working class and the working poor, who are often victims of wage theft.  We all deserve a fair day’s pay.

“Going for Total Control”

 

Today’s Chicago Sun-Times reports that Sam Zell has donated $4 million to a PAC that supports the agenda of Governor Bruce Rauner.  Columnist Mark Brown sees this donation as part of a movement that he describes this way: “Rich people, no longer satisfied with the privileges of being rich, are going for complete control.”  This isn’t simply a matter of politics.  Much of Governor Rauner’s agenda targets union employees.  Brown quotes Zell as saying, “The 1 percent work harder.”  That may be true, but in a time when most American face flat wages and poverty is growing, it’s hard to see how the hard working 1% are helping the rest of us.  Working people need to decide if they support making people like Zell even richer or if they want to have a society where children from the middle class and the working class will have opportunities to be successful.  Rich people have always had disproportionate control.  Are we moving to a point where their voice is the only one that matters?

HR Managers Recognize the Need for a Minimum Wage

 

According to a national poll of HR managers, the minimum wage needs to be increased. 58% thought the minimum wage should be increased. However, the level of increase varied from $8 to $15. Incredibly, 9% actually said there should be no minimum wage.

What surprises me about this poll is that HR managers haven’t done more to address this problem. Maybe it shows that their opinion doesn’t matter to executives, whose first goal seems to protect their own compensation. As I’ve written in the past, many of my clients who make middle class incomes report not receiving a raise or only incremental raises over the last 6 years. The working poor and middle class are being squeezed like a toothpaste tube that is nearly empty. What will the investor class and the executive class do when there is nothing left in the tube?

More Jobs or More Good Jobs?

 

Aljazeera America’s Inside Story Team analyzed the recent “good news” about job growth in the U.S. The numbers are positive, but there are still big problems. Many of the new jobs are in low wage sectors, such as service and retail. Is Aljazeera just being a buzz kill, looking for bad news? Not at all. Job growth over the past few years has been highest for lower wage workers. Just as bad, many middle class Americans have seen low or no raises from year to year. I’ve had several clients whose bosses have told them some version of “be happy you have a job.” Until wages go up for the lower and middle class, the American economy will struggle. Worse still, millions of working Americans will live with a constant dread of insecurity and a feeling that they are never getting ahead. The news about unemployment is good, but for many it does not address the real problem: America needs a raise.

Putting Money in the Bank

I often write about the problems working people are having with income and benefits. For many people, it’s hard to save for the future. According to the Huffington Post, the super-rich are also having a problem: Finding a place to put their money. The top one-thousandth percent of income earners in the U.S. is getting richer and richer. To save even more of their wealth, they’re working hard to find ways to keep it off shore. Meanwhile, low wage workers can’t survive without government benefits that are paid for by the middle class. The system needs to change.

Thom Hartmann on the Fall of the Middle Class

I was listening to Thom Hartmann’s talk show a couple of days ago and heard some frightening news.  Since 2008, 800,000 Americans have fallen out of the middle class.  Hartmann added to this woeful statistic recent discoveries about McDonald’s and Walmart.  McDonald’s gives its workers advice on how to limit their diets and how to access social services.  Similarly, Walmart was called out for holding a food drive for its low wage employees.  In both cases, taxes of the middle class are a type of corporate welfare because they keep employees of Walmart and McDonald’s sheltered, fed, and medically secure.  Hartmann looks at these trends and sees one outcome: the death of the middle class.

Can the Middle Class Survive?

Timothy Eagan of the New York Times has written a great editorial on the current declining state of the middle class.  Corporations get tax breaks from the government.  Then they do whatever they can to drive down wages.  Eagan looks at the case of Boeing, which received an $8.7 billion tax break and then asked its unions to make concessions.  The Machinists Union said, “No.”  Now Boeing is threatening to leave the state for one where wages are lower  (“Right to Work for Less State”).

Is Boeing in trouble?  Eagan writes:  “Boeing is on a roll, its stock at a record high despite the troubled rollout of its 787 Dreamliner, and the pay of its C.E.O. boosted 20 percent to a package totaling $27.5 million last year.”   If Boeing can give its leader such a raise, why doesn’t it want to compensate the people that build its planes?  That’s the magic question, and the answer is that executives and boards of directors do not care about their workers or the health of the national economy.  All they know is that they want more and more, which means working people have to make less and less.

A New Trend in Charter Schools

Laura Clawson of Daily Kos is one of my favorite writers because she finds the stories others miss.  Usually she focuses on labor.  Today she looks at a new type of charter school that caters to predominantly white students whose families are not in poverty.   While these schools are still technically public schools, they charge fees that shut out lower income students.  As Clawson notes, such school will cherry pick higher performing students and drive down performance at traditional public schools.

I would like to know if this type of charter school pays it teachers better or offers better benefits.  Non-union charters traditionally pay at a lower level than public schools, and teachers have no union protection.  I would guess that a school looking to have elite students would have to invest in good teachers.  My solution to this question is easy:  Shut down the charters and put resources back into traditional public schools.  Put education and children ahead of profits.