Sunday, September 8, 2013

NYT: Raise Minimum Wage And Labor Protections

Fast food workers have been engaged in strikes and walkouts to demand higher pay and the right to unionize. Despite big profits at fast food chains and increased labor productivity, the minimum wage is $7.25 an hour, lower than wages adjusted for inflation than those of 50 years ago. In an editorial, the New York Times called for an increase in the minimum wage plus pro-labor policies to ensure that workers also benefit from increased profits:

On its own...growth will not raise wages. What’s missing are policies to ensure that a large and growing share of rising labor productivity flows to workers in the form of wages and salaries, rather than to executives and shareholders. Start with an adequate minimum wage. Provide increased protections for workers to unionize, in order to strengthen their bargaining power. Provide protections for undocumented workers that would limit exploitation. Add to the mix regulations to prevent financial bubbles, thereby protecting jobs and wages from ruinous busts. Adopt expansionary fiscal and monetary policies in troubled times to sustain jobs and wages.

Low-wage workers would also benefit from executive-branch orders to ensure fair pay for employees of federal contractors. All workers need stronger enforcement of labor law so they are not routinely misclassified in ways that deny wages, overtime and benefits. They also need a tax system that is more progressive to shield wage earners from unduly burdensome tax increases or government cutbacks.

They need, in brief, pro-labor policies that have been overlooked for decades, with devastating results: from 1979 to 2012, typical workers saw wage increases of just 5 percent, despite productivity growth of nearly 75 percent, while wage gains for low-wage workers were flat or declined.

Recent experience has been even worse. In the decade from 2002 to 2012, wages have stagnated or declined for the entire bottom 70 percent of the wage ladder. The marchers had it right 50 years ago. The fast-food strikers have it right today. Washington has it wrong.

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