SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
minimum wage
Harris Urged to Back $17 Minimum Wage During Debate With Trump
"This would make a major difference for the affordability crisis so many face," said Rep. Ro Khanna.
Sep 10, 2024
Congressman Ro Khanna expressed hope on Tuesday that Vice President Kamala Harris' pledge to "fight to raise the minimum wage" on her newly released list of policy proposals would not be her last word on the matter, and urged her to speak out more specifically by backing a $17 minimum wage at the first presidential debate between her and Republican nominee Donald Trump.
Khanna (D-Calif.) said the Democratic nominee must send a clear message to many "voters who are living paycheck to paycheck in swing states," by showing that she is committed to improving their day-to-day lives with concrete economic policies.
Attaching a dollar amount to her promise to raise the minimum wage would show voters that she aims to "make a major difference for the affordability crisis so many face," said Khanna.
Several battleground states, including Pennsylvania, Wisconsin, and North Carolina, have minimum wages that match the federal minimum pay—$7.25 per hour—which hasn't been updated in 15 years.
Harris backed a $15 federal minimum wage when she ran for president in 2020, eight years after fast food workers launched the Fight for $15 national campaign.
But last year, Sen. Bernie Sanders (I-Vt.) and Rep. Bobby Scott (D-Va.) proposed raising the federal floor for wages to $17 per hour within five years, with Sanders saying, "A job should lift you out of poverty, not keep you in it."
According to the Massachusetts Institute of Technology's Living Wage Calculator, even people in states with relatively low costs of living would need to earn significantly more than $15 per hour to enjoy a decent standard of living.
In both Mississippi and Alabama, for example, one adult with no children would need to earn more than $19 per hour to make a living wage. Two working adults raising one child would need to make $17.89 each, but they would need to make more than $21 each per hour if they had a second child.
"Raising our federal minimum wage from $7.25 to $17 is not radical," said Liz Shuler, president of the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), last year.
At HuffPost on Tuesday, Dave Jamieson noted that providing specifics about her plans to raise the wage floor would further clarify for swing state voters how Harris differs from her GOP opponent on this issue, as Trump has "never had a coherent vision for the minimum wage" and "has contradicted himself so often on the issue that The Washington Post's fact-checking operation once created a 'guide to all of Donald Trump's flip-flops on the minimum wage.'"
While campaigning for president in 2016, Trump said at various points that he did not support any federal minimum wage, that raising it would be a "big, big problem," and that that he was "looking at" raising it.
One Fair Wage (OFW), which has campaigned on ending the subminimum wage of just $2.13 for tipped workers, applauded Harris for her support for that policy, saying it offers a clear contrast to Trump and could appeal to 14 million service workers, including millions in swing states, who could sway the election.
"While both campaigns have called for the elimination of taxes on tips, this policy alone would only benefit about one-third of tipped workers," said the group. "Most workers wouldn't see any real relief, as their earnings are too low for them to benefit from a tax cut. That's why the Harris-Walz campaign's commitment to ending the subminimum wage stands out—it acknowledges that eliminating taxes on tips is not enough, and that workers need a true wage increase by ending the $2.13/hr subminimum wage for tipped workers, allowing them to earn a full minimum wage with tips on top."
"By taking this bold stance, the Harris-Walz campaign is aligning itself with a growing movement of workers and advocates fighting to create an economy where everyone can thrive," said OFW.
Saru Jayaraman, president of the organization, added that the policy would "lift millions of people out of poverty, close racial and gender pay gaps, and provide a foundation for economic security that all working people deserve."
"Raising wages resonates with millions of Americans who have been left behind by the current system, and the Harris-Walz campaign's commitment to this issue will not only energize voters but set the stage for a fairer, more equitable economy," she added.
Last week, Sanders toldRolling Stone that in the last eight weeks of the campaign, he hopes Harris will "expose Trump for the fraud that he is" and "develop an agenda for working-class people and trade unionists that will be very much in contrast with Trump."
"Raising the minimum wage to a living wage," said Sanders, "will improve wages for many millions of lower-income Americans."
Keep ReadingShow Less
US Workers Are So Much Better Off Today Than 4 Years Ago—It's Not Even Close
Here are some of the economic facts.
Sep 06, 2024
This is not a tough one. First and foremost, workers are better off today because they overwhelmingly have jobs if they want them. They also are getting higher pay, even after adjusting for inflation. And they tell us they are much more satisfied at their jobs.
When President Biden took office, the unemployment rate was 6.4 percent. It is currently 4.3 percent. For most of his presidency the unemployment rate has been below 4.0 percent, a stretch of low unemployment not seen in more than half a century.
The story looks even better if we look at the percentage of people who have jobs, since many people are not counted as being unemployed if they don’t even look for work because of a weak labor market.
In January of 2021, the share of people in their prime working years (ages 25 to 54) who had jobs was 76.4 percent. In the most recent data, it stood at 80.9 percent, 4.6 percentage points higher.
This is not just an issue of millions more people being able to get jobs. When the labor market is as strong as it has been, workers can have their choice of jobs. They can leave jobs where the pay is low, the workplace is unsafe, or the boss is a jerk.
The United States is the only wealthy country where workers have seen substantial wage growth since the pandemic. In most countries wages have fallen behind inflation.
Workers switched jobs in record numbers in the years 2021-2023. Tens of millions of people quit their jobs and moved on to better ones. One result was that workers reported the highest rate of job satisfaction on record. This is a big deal, since most workers spend a large share of their waking hours on the job.
The tight labor market also gave workers the power to resist employers’ demands that they return to the office when the worst of the pandemic was over. As a result, the number of people who report being able to work from home has increased by 19 million from the pre-pandemic level.
This shift has been largely ignored by the media, but these workers are saving hundreds of hours a year in commuting time and saving thousands on transportation and other commuting-related expenses. It’s true that the option to work from home is mostly available to higher paid workers, but 19 million people is nearly one-eighth of the workforce, not some tiny elite.
If working from home was a benefit that mostly went to higher paid workers, the pay increases disproportionately went to those at the bottom, reversing the pattern that had been in place for more than four decades. An analysis from the Economic Policy Institute found that wages for workers in the bottom ten percent of the wage distribution increased by 13.4 percent from before the pandemic, after adjusting for inflation.
Wages for workers in the middle increased by 3.0 percent over this period, also after adjusting for inflation. This is not great, but it is better than what we saw over most of the prior four decades, when wages were often stagnant or falling.
And this wage growth occurred in spite of a worldwide pandemic that whacked growth and caused inflation everywhere. The United States is the only wealthy country where workers have seen substantial wage growth since the pandemic. In most countries wages have fallen behind inflation.
It is also important to realize the world-leading recovery was not something that just happened. It was not inevitable that the economy would bounce back quickly from the pandemic shutdowns. There was very rapid job growth in the summer of 2020, as most of the shutdowns ended. But job growth slowed considerably in the fall. In the last three months of the Trump administration, we were creating jobs at the rate of just 140,000 a month. At that pace it would have taken us more than five and a half years to get back the jobs lost in the recession.
The Biden administration’s recovery package got back these jobs in less than a year and a half. The rapid job growth has continued so that we now have 6.4 million more jobs than we did before the pandemic. With the economy still growing at a good clip and inflation back to its pre-pandemic pace, for workers the future is bright.
Keep ReadingShow Less
Don’t Take Rideshare Companies at Their Word When It Comes to Worker Pay
A new study found that after the industry-backed Prop 22, rideshare drivers take home $7.12 per hour in median net hourly earnings before tips—a fraction of California’s $16 minimum wage.
Sep 02, 2024
The rise of Uber and Lyft to ubiquity over the last decade has been astonishing—over 3 billion trips were taken using the platforms in 2023. Throughout that meteoric expansion to nearly every inch of the globe, the companies have waved away concerns that the drivers keeping the platforms going are being underpaid for their labor.
Anecdotal cases of drivers working grueling hours for a pittance abound, but Uber and Lyft have been able to shrug them off through a combination of industry-funded studies and wage secrecy. However, a few independent analyses have managed to puncture the narrative that the gig economy pays well.
A new study from the U.C. Berkeley Labor Center is one of the strongest examples of that so far. Researchers analyzed 52,370 trips by 1,088 drivers on six rideshare and delivery apps across five major metro areas and found that they earned well below the minimum wage in all five.
The gig companies are promoting Proposition 22-like policies in other states. Our research demonstrates clearly that such policies can be expected to leave drivers with sub-minimum earnings.
The study is particularly notable for the results it extracted about California, where in 2020 gig companies poured tens of millions into Proposition 22, legislation which allowed the industry to continue to classify their workers as independent contractors rather than employees.
The companies promised that exempting drivers and delivery workers would preserve the “flexibility” of gig work while ensuring that they would make over the minimum wage.
Four years later, that promise seems broken. Rideshare passenger drivers, the study found, take home $7.12 per hour in median net hourly earnings before tips—a fraction of California’s $16 minimum wage. When you account for the employee benefits and taxes that drivers have to pay for themselves, the number is even lower.
The lesson for other states and cities considering similar exceptions to labor law for gig companies? Don’t take rideshare companies at their word when it comes to worker pay.
I discussed this report with one of its authors, Ken Jacobs, co-chair of the UC Berkeley Labor Center.
This conversation has been edited for length and clarity.
First of all, congratulations on this major report! Can you tell me a little about how you collected this trip data? What kind of roadblocks do rideshare companies put up to knowing how much workers get paid?
The data comes from a third party app called Gridwise. Drivers use it to track mileage and earnings. We analyzed data for over 1,000 drivers and more than 50,000 trips over a two week period in January 2022 in five metro areas: Los Angeles, San Francisco, Seattle, Chicago, and Boston.
The data allowed us to analyze how much drivers earned per hour and shift across the main passenger and delivery services. I have looked at lots of screenshots from the company apps. The companies don’t make it easy for drivers to calculate their net earnings.
This study split apart passenger and delivery drivers—were there any notable differences in the pay for those distinct groups?
The biggest difference was the share of income that comes through tips. Tips account for a little more than half of the gross income of delivery drivers, but only 10% for passenger drivers. Overall we found that the typical passenger driver earned the equivalent of a $5.97 an hour wage before tips in California, and $7.63 an hour after tips.
Delivery drivers earned about $5 an hour in California without tips and $11.43 an hour with tips. In the three metro’s outside of California, non-tip income—base pay, incentives and bonuses—barely covered expenses. Drivers were essentially working for tips.
Can you explain a little more about how gig companies and this study calculate pay differently, especially when it comes to time between trips and expenses?
When the gig companies talk about how much drivers earn they usually put out figures for gross pay per hour and they don’t include the time a driver is waiting for a request or returning after dropping off a passenger or delivery. That is work time! It is an essential part of the job.
A recent study looked at data from 5.3 million San Francisco rideshare trips to see what drivers did between trips—they found that drivers were mostly heading back to hub areas where they had a greater chance to find a passenger or were cruising while waiting to get the next ride. They were working. When the companies talk about expenses, they don’t include costs associated with any of those miles.
The Gridwise date allows us to account for drivers’ full time and miles for each shift. For expenses, we use the IRS mileage rate for the time period under study of 58.5 cents a mile. This reflects the full cost of owning and operating a vehicle.
Proposition 22, the initiative put on the California ballot by the gig companies, set an initial mileage rate of only 30 cents a mile. The companies justify this by saying that most drivers work very few hours. What they don’t tell you is that most trips are done by drivers who work 20 hours a week or more and for whom gig driving accounts for the greatest use of their vehicle.
We also account for the fact that gig companies do not pay the employer side of payroll taxes or provide other mandatory benefits to drivers.
Your report mentions that concentration in the rideshare and delivery industries may be contributing to low pay, could you tease that out for me?
There are two major gig passenger companies, and four for food and grocery delivery. That gives them significant power to set pay in the industry. They are also able employ what UC Irvine law professor Veena Dubal calls “algorithmic discrimination.” They can see what trips or deliveries drivers have been willing to take for how much money in the past, and can individualize what they offer each driver for the same ride. They do the same in setting what they charge passengers.
How did pay in California compare to the other metro areas you analyzed?
The typical passenger driver earned around $3 less an hour in California than in the other three metros before tips. If we include tips it was around $3.50 less.
For delivery drivers it was the other way around. The typical delivery driver earned $4.50 more an hour in California than the other three metros before tips; $3 more with tips.
What does that say about the ways that Prop 22 affected the industry?
Proposition 22 was sold to voters as setting a higher minimum wage for drivers. In the case of passenger drivers, it had very little effect. Delivery drivers were much more likely to receive Proposition 22 payments and did have higher earnings than their counterparts outside of California. In both cases driver earnings were still well below the state minimum wage. The gig companies are promoting Proposition 22-like policies in other states. Our research demonstrates clearly that such policies can be expected to leave drivers with sub-minimum earnings.
The California Supreme Court recently upheld Prop 22 against a constitutional challenge—how should we expect that situation to evolve?
With the court’s recent decision upholding Proposition 22, we can expect gig companies to continue to pay subminimum wage in the state. The courts did leave open the possibility for the legislature to grant collective bargaining rights to gig workers. Massachusetts will be voting on a gig worker collective bargaining initiative this November. The results of that vote may shape what happens next in California.
Keep ReadingShow Less
Most Popular