May 1 is International Workers’ Day and, although it’s not an official holiday in the United States, it’s a good opportunity to reflect on the current struggles of labor in the U.S.
In spite of a booming economy, American wages have not kept pace. In fact, today’s real average wage has about the same purchasing power it did 40 years ago after accounting for inflation, according to the Pew Research Center.
And while the unemployment rate has reached its lowest levels in decades, many of those employed are still poor. According to the Bureau of Labor Statistics, there are 7.6 million “working poor,” defined as people who live below the poverty line despite being employed at least 27 weeks a year. Many of those jobs don’t pay much: one-third of all workers earn less than $12 an hour, and 42% earn less than $15.
Campaign for a $15 minimum wage
To combat this type of working poverty, labor advocates have been pushing for a minimum wage of $15, which has become law in a number of communities. On the state level, California will phase in the $15 minimum wage by 2022, while New Jersey and Maryland have recently passed laws that will gradually increase the minimum wage rate to $15 by 2024. The minimum wage in Massachusetts will reach $15 by 2023, and Illinois will phase in a $15 minimum wage by 2025.
The SeaTac area of Washington State was one of the first to approve a $15 minimum wage in 2013. Since then, Seattle; New York City; Washington, D.C.; Minneapolis and St. Paul, Minnesota; Flagstaff, Arizona; Montgomery County, Maryland; Shelby County, Tennessee, and more than 15 California cities have adopted a $15 minimum, with various phase-in dates. San Francisco’s minimum wage will rise to $15.59 by July 1.
Nationally, the Democrat-led Raise the Wage Act is being debated in the House. The bill would raise the federal minimum wage to $15 from its current level of $7.25 per hour, which hasn’t changed in nearly a decade.
Raising wages for tipped workers
Workers in the food service industry who receive customer tip still legally earn pay below minimum wage. Restaurant Opportunities Centers (ROC) United has been championing the elimination of these subminimum wages since 2013. Advocates say paying restaurant workers at least a minimum wage reduces wage theft and sexual harassment of workers who depend on customers’ tips to make a living.
To date, eight states (California, Nevada, Oregon, Washington, Minnesota, Montana, Alaska, and Michigan) and two cities, Washington, D.C., and Flagstaff, Arizona, all require the same minimum wage for workers, regardless of whether they receive tips or not.
Several more states are considering similar legislation. The federal Raise the Wage Act would also gradually eliminate the tipped minimum wage, which is currently set at $2.13.
However, such laws can be a hard sell. In Washington, D.C., voters passed an initiative last year that would have gradually raised the tipped minimum wage to match the regular minimum. But even though the measure passed with 55% support, the City Council repealed the law four months later.
Private companies join in
Analysts pinpointed the decline of unions as one reason for stagnant wages; without pressure from unions, companies may not be motivated to raise pay beyond incremental increases. A few companies, however, are getting ahead of the curve and raising their minimum wages before they are required to by law.
Starting last November, Amazon raised its minimum hourly wage to $15. Target has announced that it is raising its minimum wage to $15 by 2020, and Costco recently raised its hourly base wage to $15. Amazon CEO Jeff Bezos has challenged U.S. retail giants to follows suit.
The gig economy
While working a part-time contract may be touted as a way to make extra money in your spare time, many gig employees actually work full time — without a minimum hourly wage, benefits, or the right to organize under federal law. However, some of these workers are demanding more.
In December, New York City officials passed a law requiring a minimum pay rate for Uber, Lyft, Juno, and Via drivers, the first of its kind in the country. Ride-share companies now must pay New York City drivers around $17.22 per hour. And in March, ride-share drivers in Los Angeles went on a one-day strike to protest pay cuts.
The gender gap
Pay disparity between men and women has endured despite such federal legislation as the Equal Pay Act of 1963, which prohibits sex-based wage discrimination, and the Lilly Ledbetter Fair Pay Act of 2009 that expanded the time period for filing complaints under this act. A new federal law designed to fill in the gaps in these laws, the Paycheck Fairness Act, recently passed the House.
This bill would prohibit employers from asking candidates how much they made in previous jobs, ban employer rules that stop workers from talking about their salaries, and require employers to share salary data with the Equal Employment Opportunity Commission for more transparency. The bill moves on to the Senate next.
