More needs to be done but wages seem to be going up
Like many progressives, I was disappointed when the Senate failed to include an increase to the minimum wage in March. Unlike many progressives, it wasn’t a “make or break” moment for me because a, that amendment didn’t go far enough (raising the minimum wage to $15/hour by 2025 is too little, too late), b. it can still be done and maybe the bill will be better — like $22/hour sooner than 2025, and c. that’s not the only way to raise wages.
There were things that were included in the Covid Relief Bill that have helped people. (Side note: Another area where my progressive friends and I have different thoughts is on the stimulus payments. Before the Georgia runoff, Joe Biden said he would raise the payment to $2,000 — which he meant as the $600 check people got under Trump plus a $1,400 check they would get under Biden. Not a second check of $2,000, which would raise the total to $2,600. Sorry.)
The Covid Relief did give people an additional $1,400 but it also extended and expanded unemployment benefits. People using that program could get $300 a week until September. That has had a big role in raising wages across the nation. This may be anecdotal but a friend of mine has been working in Alabama (his company sent him there — no his wages haven’t changed) and he saw that companies that usually pay only the minimum wage or slightly more were paying more than $15/hour. These companies include McDonald’s and other fast-food places.
According to the New York Times:
Workers in retail, hospitality and other service industries bore the brunt of last year’s mass layoffs. But unlike low-wage workers in past recessions, whose earnings power eroded, many of those who held on to their jobs saw their wages rise even during the worst months of the pandemic.
Now, as the economy bounces back and employers need to find staff, workers have the kind of leverage that is more typical of a prolonged boom than the aftermath of a devastating recession. Average earnings for non-managers in leisure and hospitality hit $15 an hour in February for the first time on record; in April, they rose to $15.70, a more than 4.5 percent raise in just two months.
Even workers with less formal education, who have experienced the worst job losses and still face high unemployment rates, have seen pay accelerate this year as economies reopen and employers struggle to hire. That’s according to the Atlanta Fed gauge, which is calculated in a way that makes it less susceptible to at least some of the composition issues plaguing other wage measures. A separate, quarterly measure of overall compensation costs has also held up.
The data, while messy, match anecdotes. Reports of labor shortages in service jobs that are newly reopening abound, and surveys show businesses and consumers becoming more confident that employee earnings will increase. Job openings have been surging, and the rate at which workers are quitting suggests that they have some room to be choosy.
Many employers, particularly in hospitality, have blamed generous unemployment benefits — now set at an extra $300 per week — for encouraging workers to stay home and making it harder for them to hire.
Now the news isn’t all great. GOP governors in at least 20 states are going to stop taking money from the feds to give people that $300/week. They claim that rising wages will cause inflation, though that does not seem to be happening that way. I think workers have more leverage they have not had in a long time. They could very well be listening to Nancy Reagan when they get less than living wage job offers when she told people to, “Just say no.” (I know she was talking about drugs and that they cut funding for drug treatment but it works here.)
Is this enough? Of course not. While market forces have raised the wages for people around the United States, we have a lot of proof that the market isn’t at all interested in the well-being of its workers. People I know who work at Walmart tell me they get bonuses when they fire people (Walmart doesn’t care that turnover is costly). There’s a reason we have laws and regulations against child labor and forcing companies to provide workers with a safe place to work.
Since 1978, CEO compensation has increased by 940%. Think about that. CEO pay has gone up by 940%. Meanwhile, workers have seen their paychecks go up by 12%. That’s not right. It is folly to expect the market to do what is best for anyone but their shareholders and bottom line.
The government needs to raise the minimum wage. I think it should be $22/hour. Not four years from now but now.
If you want to see the U.S. minimum wage raised, please call your senators at 202–224–3121, your member of the House of Representatives at 202–225–3131 or the White House at 202–456–1111.