We keep on fighting, that's what. We've won some very important victories in the past few months, in particular on the minimum wage. We've won at the ballot box, where voters and/or legislators--including in a number of red states -- opted to raise the minimum wage within their borders, and we've won in the corporate world, where major corporations have opted to raise the minimum wage they pay their employees. Ikea thought raising its minimum wage worked out so nice, they did it twice -- within six months.
Just last week, in a big win for one of our most important unions (SEIU), 35,000 home health care workers in Massachusetts got a raise. New York State's wage board, appointed by Gov. Andrew Cuomo, said this week that hourly wages for employees of fast-food chains need to be raised "substantially, maybe even to $15." Buffalo Mayor Byron Brown, who serves as the board's chair, added that there was agreement on making fast-food employers assign "more regular" numbers of hours per week to each worker, "so that workers have predictability, so that they can plan, so that they can pay their bills."
This is by no means a done deal, but Cuomo has the authority, through his labor commissioner, to act on the board's recommendations unilaterally, bypassing the Republican-controlled State Senate. Thus, upwards of 200,000 people--the number of fast-food employees in the state -- could benefit, and Cuomo made clear when appointing the board that he wanted to take action on this front.
As the New York board mentioned, hours as well as scheduling more broadly are tremendously important issues for many workers. And we are seeing some badly needed improvements here. One day after the publication of a New York Times article that focused on Jannette Navarro, a single mother of a four-year-old juggling child care and a work schedule that could change, literally, at the last minute, Starbucks--Ms. Navarro's employer -- changed its scheduling policies, improving the lives of 130,000 American workers. Likewise, last week Victoria's Secret made a similar change not long after the publication of an embarrassing article at BuzzFeed about their workers dealing with last-minute alterations to their schedules. As Laura Clawson at Daily Kos noted, this type of change is "a move that is, in its way, as big as raising wages."
If you don't think these changes really add up to much, take a look at the most recent data from Bloomberg:
Average hourly earnings in industries paying less than $12.50 an hour a year ago rose 3.2 percent in the 12 months through April, about 1 percentage point more than wage growth for the job market as a whole, according to Goldman Sachs Group Inc.
This development may be the start of a long-awaited catch-up for lower-wage workers, who suffered disproportionately during the recession and recovery. It is being driven in part by state governments raising their minimum wages, and also through voluntary decisions by companies to raise employees' pay.
Lower-wage workers catching up to the rest of the economy is an incredibly important development in terms of both making improvements on the income inequality front and for the long-term health of the economy, because low-wage workers are likely to spend virtually everything they earn, given the need to make ends meet. Increasing consumption feeds into a virtuous cycle that leads to more job and wage growth.
Also, if 3.2 percent annual growth in hourly wages for low-wage workers--and the around two percent average overall growth in both hourly wages and in actual paychecks, i.e., weekly earnings, doesn't sound so great by historical standards, it really is quite impressive when we consider that year-over-year inflation (i.e., inflation over the previous 12 months) is actually zero, and has been at or below zero every month this year.
The key is whether workers' increased pay actually translates into increased purchasing power. Three or even two percent wage growth in a zero inflation environment is better than four percent wage growth when inflation is running at three percent, for example, as it did, on average throughout the 1990s and 2000s. This is what we mean by real wage growth, i.e., wage growth above inflation.
The most recent data shows that, from May 2014 to May 2015, average real hourly wages for production and non-supervisory employees grew 2.6 percent, and average real weekly earnings grew by 2.5 percent. The overall average numbers showed 2.2 percent growth in hourly wages and 2.3 percent growth in weekly earnings. In other words, non-management wages and paychecks grew by more than did those of management, another sign that we are making progress on the income inequality front.
To be sure, real wage growth for the average American worker has been, well, pitiful over the past few decades. Below are the numbers through 2014:
Equally galling is the fact that as labor productivity has continually improved, wage growth has not. Whereas hourly compensation for non-management employees increased proportionally with gains in productivity from 1948 to 1973, in the next three decades the two became uncoupled, as productivity increased by 74 percent and hourly compensation by a paltry nine percent.
Who knows if the improving figures from the past 12 months are the start of reversing these trends? Either way, we must keep pushing for increases to the minimum wage, and for the enactment of more policies -- such as the president's announcement that everyone making less than $50,400 per year will be eligible for overtime pay (1.5 times their normal hourly wage), thus making around five million more Americans eligible -- that will increase wages for those struggling to get by.
It is important to acknowledge that we are making an impact, that we have had some successes. Let's learn both from those successes -- the gains won from employers through public pressure and the gains won thanks to those we've elected to office -- as well as from the setbacks working Americans have suffered in places like Scott Walker's Wisconsin. Most importantly, we simply must keep fighting.