What About The Jobs and Wages Cliff?

Isaiah J. Poole

One of the most maddening features of the current fiscal cliff/fiscal swindle debate is that the chattering class rarely acknowledges the people who have already fallen off the cliff: 5 million Americans who have been unemployed for more than 27 weeks. The roughly 7 million people who aren’t even counted as unemployed because even though they want a job they haven’t bothered looking for one. The high percentage of unemployed workers who had to settle for new jobs with a pay cut of 20 percent or more. The 2.7 million part-time workers who want a full-time job but can’t find one. And the millions of workers forced to sustain a family on a job that pays poverty-level wages.

An economic debate worthy of a nation that prides itself on its moral values and compassion would have these people, along with the elderly and others who are financially struggling, at the very center of the national discourse. Instead, whether it is the “chained CPI” debate on Social Security or such measures as the worker-disempowerment law that just passed in Michigan, it seems that political leaders in Washington are working overtime to make sure that workers have lower wages, and that retired people and those in poverty have even less financial security.

It is time to push for an agenda that puts an end to throwing working-class people and the economically struggling off a cliff of economic inequality and injustice.

A good start would be the agenda laid out by the National Employment Law Project in its report released Wednesday, “100 Days for America’s Workers.” It proposes a five-part plan that President Obama and Congress could, if it had the will to do so, enact during the first 100 days of his new administration. They fit the principle that the key to addressing the nation’s economic problems, including the federal budget deficit, is to first put people back to work at jobs that pay a living wage.

The plan’s elements are:

1. Renew federal unemployment insurance for the long-term jobless, which will ensure that 2 million people who have been unemployed for more than 26 weeks will not lose their primary source of subsistence income before they can find new jobs in a more robust economy. That is especially crucial at a time when many economists predict economic growth in the U.S. could be as low as 2 percent in 2013 without a major intervention by the federal government .

2. Protect home care workers on the job by requiring their employers to comply with federal minimum wage and overtime laws, which is what a regulation currently being developed by the Labor Department would accomplish. That would mean that more than 2.5 million home-care workers who are not covered by minimum-wage or overtime laws could see a boost in their paychecks. And, despite the cries of industry lobbyists trying to block the rule, enforcing minimum-wage and overtime laws for health care workers has not created problems in the 15 states and the District of Columbia where this is already the law.
3. Invest in creating good jobs, putting people to work on work that needs to be done. NELP notes that by spending $220 billion a year on a variety of essential infrastructure projects around the country, from schools to highways and public transportation networks, up to 5 million new jobs could be created. In other words, a job for every person who has been unemployed for at least 27 weeks. And, despite the cries of conservatives who insist we cannot afford the spending, there is in fact no better time to make this investment, when borrowing costs are virtually nil, inflation is low and labor costs are stable.

4. Raise the minimum wage. Here’s the ugly truth, according to the NELP report: “Roughly one-fourth of U.S. workers earn less than the federal poverty line for a family of four. And contrary to stereotypes, most low-wage workers are adults, not teens: 87.9 percent of workers who would benefit from raising the minimum wage are adults 20 years or older.” Congress should pass a law similar to the Fair Minimum Wage Act, which would raise the federal minimum wage to at least $10 an hour by 2015, restoring the purchasing power the minimum wage has lost since the late 1960s, and then indexing it to the cost of living so that future workers will not fall behind.

5. Strengthen enforcement of workplace and civil rights. That would mean ending such practices as “wage theft,” in which employers employ such tricks as classifying what should be an hourly job as a supervisory one to escape paying overtime. If the federal employment law enforcement agencies were properly staffed, they would be able to help wronged workers recover $112 million in back wages, NELP estimates.
These initiatives are not radical or new. “This is not a comprehensive policy agenda; it does not dig deep into a number of essential reforms,” NELP concedes in its report. But these do represent the kind of bedrock initiatives that we should be pushing forward on to ensure that we are putting people back to work as quickly as possible in jobs that pay decent wages. And they are practical policies that willing politicians can work together to implement in the first few weeks of 2013.
Cutting Security and health care benefits for seniors and the poor, and crippling the federal government’s ability to invest in the foundations of a new economy, are not the way to economic recovery. Turning unemployed and underemployed workers into spenders and taxpayers is the way. We need to demand that our elected officials make that choice.

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