President Raises Wages For Federal Contractors

Let’s begin by getting one thing straight:  a President issues Executive Orders in order to run the government.  This is his job as President under the Constitution.  There is nothing treasonous, illegal or impeachable about the practice.  In fact Barack Obama has issued far fewer Executive Orders than any President in recent times.

That said the President yesterday issued an Executive Order raising the minimum wage for workers under federal contracts.  It is now $10.10/hour instead of $7.25.  Raising the minimum wage does NOT cost jobs.  This frequent Republican objection has absolutely no basis in fact.  In fact by providing more income for low income workers the higher wages stimulate the economy creating more jobs.  When consumers, especially on the low end of the scale, have more money they tend to spend all of it.  The largest factor in our slow economy has the been the inability of consumers to spend because wages have been stagnant for thirty years unless you’re a CEO.

Where was all this wage rage when corporate executives and Wall Street banksters were increasing their incomes hundred folds?  It doesn’t seem to have cost us any CEO jobs.

From the White House:

Details of the Executive Order  

Ø  The Executive Order will raise the minimum wage to $10.10 effective for new contracts beginning January 1, 2015.   The higher wage will apply to new contracts and replacements for expiring contracts.  Boosting wages will lower turnover and absenteeism, and increase morale and productivity overall. Raising wages for those at the bottom will improve the quality and efficiency of services provided to the government.

Ø  Benefits hundreds of thousands of hardworking Americans. There are hundreds of thousands of people working under contracts with the federal government to provide services or construction who are currently making less than $10.10 an hour.  Some examples of the hardworking people who would see their wages go up under this Executive Order include nursing assistants providing care to our veterans at nursing homes, concessions workers in National Parks, people serving food to our troops, and individuals with disabilities working to maintain the grounds on military bases.

Ø  Includes an increase in the tipped minimum wage.  This executive order also includes provisions to make sure that tipped workers earn at least $10.10 overall, through a combination of tips and an employer contribution.  Employers are currently required to pay a minimum base wage of $2.13 per hour, a base that has remained unchanged for over twenty years, and if a worker’s tips do not add up to the minimum wage, the employer must make up the difference. Under the Executive Order, employers are required to ensure that tipped workers earn at least $10.10 an hour.  The Executive Order requires that employers pay a minimum base wage of $4.90 for new contracts and replacements for expiring contracts put out for bid after January 1, 2015.  That amount increases by 95 cents per year until it reaches 70 percent of the regular minimum wage, and if a worker’s tips do not add up to at least $10.10, the employer will be required to pay the difference.  

Ø  Covers individuals with disabilities.  Under current law, workers whose productivity is affected because of their disabilities may be paid less than the wage paid to others doing the same job under certain specialized certificate programs. Under this Executive Order, all individuals working under service or concessions contracts with the federal government will be covered by the same $10.10 per hour minimum wage protections.  

Ø  Improves value for the federal government and taxpayers.  One study showed that when Maryland passed its living wage law for companies contracting with the state, there was an increase in the number of contractors bidding and higher competition can help ensure better quality. The increase will take effect for new contracts and replacements for expiring contracts put out for bid after the effective date of the order, so contractors will have time to prepare and price their bids accordingly.

Continuing to Work With Congress, States and Localities to Help All Workers

The President is using his executive authority to lead by example, and will continue to work with Congress to raise the minimum wage for all Americans by passing the Harkin-Miller bill. The bill would raise the Federal minimum wage for working Americans in stages to $10.10 and index it to inflation thereafter, while also raising the minimum wage for tipped workers for the first time in over 20 years.  The President will also continue to support and encourage state, local and private sector efforts to increase wages and help more working families.  

§  Businesses like Costco have supported past increases to the minimum wage because it helps build a strong workforce and profitability over the long run. Low wages are also bad for business, as paying low wages lowers employee morale, encourages low productivity, and leads to frequent employee turnover-all of which impose costs.

§  Across the country, Americans are saying it’s time to raise the minimum wage. The President believes that it’s time for action, and people across the country agree. Since the President called for an increase in the minimum wage in last year’s State of the Union, five states have passed laws increasing their minimum wage. And many businesses, from small businesses to large corporations, see higher wages as the right way to boost productivity and reduce turnover and therefore boost their profitability.

§  Raising the minimum wage is good for government, good for business and workers and key to a stronger economy.  A range of economic studies show that modestly raising the minimum wage increases earnings and reduces poverty without jeopardizing employment.  Higher wages can also boost productivity, increase morale, reduce costs and improve efficiency.  

§  Raising the minimum wage will make sure no family of four with a full-time worker has to raise their children in poverty. It has been seven years since Congress last acted to increase the minimum wage and, adjusted for inflation, today the real value of minimum wage is roughly the same as what it was in the 1950s, despite the fact that the typical American family’s income has doubled since then. And right now a full-time minimum wage worker makes $14,500 a year, which leaves too many families struggling to make ends meet. Even after accounting for programs like the Earned Income Tax Credit, a family of four supported by a minimum wage worker still ends up living below the poverty line.

§  Indexing the minimum wage to inflation would help lower-income workers keep up in the future. Since it was first established in 1938, the minimum wage has been increased 22 times, but was eroded substantially over several prolonged periods between increases because of inflation. Indexing would prevent a repeat of the 34 percent decline in the real value of the minimum wage from 1978 to 1989 and the 19 percent decline in real value from 1998 to 2006, as well as the 40 percent decline in the real value of the base wage for tipped workers since it was last raised in 1991. Last year alone, workers earning the minimum wage basically got the equivalent of a $200 pay cut because the minimum wage stayed the same while the cost of living went up.  Democrats and Republicans agree that indexing the minimum wage to inflation would ensure that working families can keep up with expenses. Unfortunately, those families will continue suffer if Congress continues to not act.

§  Helping parents make ends meet. Around 60 percent of workers who would benefit from a higher minimum wage are women.  Less than 20 percent are teenagers.  Also, those workers who would benefit from an increase in the minimum wage brought home 46 percent of their household’s total wage and salary income in 2011.  Raising the minimum wage directly helps parents make ends meet and support their families.

 

How to Kill Your Business In One Simple Step

The minimum wage has stagnated to such an extent that current workers earn less than those making wage did in 1968.  These wages have decreased in purchasing power ever since because it has not kept up with inflation.  This is why many municipalities now require living wages for all workers.  Santa Fe’s is about to go to $10.43/hour for ALL workers.

The owner of the Pennside Drive-In, about a mile from me, went onto the front page of today’s Reading Eagle complaining about those of us endeavoring to insure his workers earn a decent wage.  Not a living wage, mind you, just a decent wage.  Tipped employees currently earn $2.13/hour and that’s eaten up by taxes on their tips so their only actual source of income are those tips.  That’s why I tip 30%.

Greedy bastards like Gary Intelisano don’t deserve to stay in business if they don’t think their hard working employees deserve a raise.  Boycott the Pennside Drive-In.  It isn’t difficult, their prices for so-so food and ice cream are outrageous.  No wonder the place changes hands every year.  I bet Intelisano doesn’t make it to fall.

Death of an Adjunct

By Stephen Herzenberg, Third and State

Appearing earlier this month on a radio program in Pittsburgh with labor historian Charles McCollester, I heard for the first time the story of Margaret Mary Vojtko, a 25-year adjunct faculty member at Duquesne University who died recently in poverty at the age of 83.

Two and a half years ago, the Keystone Research Center released the most comprehensive state report in the United States on the rising use of adjunct faculty at colleges and universities. The numbers were sobering. Even if they cobbled together a full-time (10 courses per year) load at multiple institutions, adjunct community college faculty in Pennsylvania earned only about $25,000 annually. Contingent faculty members and instructors taught 42% of the courses at all public colleges and universities in Pennsylvania (versus 49% nationally). Most part-time/adjunct faculty members in Pennsylvania public higher education received no health or pension benefits.

Given cuts in state funding for higher education since we wrote our report, the situation is surely worse today in Pennsylvania.

How do we avoid a future in which a majority of higher education faculty earn less than a “quality” wage – a wage sufficient to give teachers time to prepare lessons, establish office hours, and provide feedback that increases student learning?

It would help if we honored the rights of part-time/contingent faculty to join a union – starting, for example, at Margaret Mary’s Duquesne. One game-changing option would give all part-time and contingent faculty at publicly funded Pennsylvania higher education institutions the freedom to form a single statewide local union. This would enable part-time and contingent faculty to negotiate statewide wage and benefit standards and working conditions consistent with teaching excellence. (This type of geographically based union that lifts up low wages and benefits in service industries that can’t relocate – because they have to be near their “customers” – is exactly what is needed to rebuild the middle class generally in Pennsylvania and the United States. See my earlier posts on fast food workers and on the 50th Anniversary of Martin Luther King’s “I Have a Dream Speech.”)

State lawmakers also need to develop – and fund – a long-term plan for paying all higher education teachers a “quality wage.” In a world both moral and rational, this could be part of a broader plan that also makes post-secondary education affordable again for students, and marries online and in-person education to lower costs while maintaining quality.

This approach starts with values – the outcomes we want for students, faculty, and taxpayers – and then uses technology, collective problem-solving, and social negotiation to create a world that honors those values. Imagine the possibilities.

The story of Margaret Mary is a sad reminder that all public policy discussion should start from values – the world we want to create and, unfortunately, the world we want to avoid.

Imagine…A Minimum Wage Your Daughter Could Live On

By Stephen Herzenberg, Third and State

The Australian minimum wage this year is $15.96 per hour. I know this mostly because my daughter lives in Melbourne these days (not forever, I hope). When she arrived there 18 months ago, she got a job at a minimum-wage restaurant. She earned enough to cover her rent and other expenses.

What brought the idea of a much higher minimum wage to mind is a blog post from Dean Baker of the Center for Economic Policy Research. Dean estimates that the U.S. minimum wage today would be $16.54 per hour if it had kept pace with U.S. productivity growth since 1947.

For those with knowledge of economic history (both of us), a minimum wage that increases its buying power every year does not seem far fetched, even in the good old United States. The U.S. minimum wage DID increase with productivity growth from 1948 to 1968. This linkage (see Dean’s chart below) resulted from the combined impact of two mechanisms: manufacturing wages kept pace with productivity growth thanks to collective bargaining in mass manufacturing (starting with the famous auto industry “Treaty of Detroit” in 1948); and Congress periodically increased the minimum wage to bring it back up to 50% of the average manufacturing wage.

In recent decades, the most ambitious aspiration in U.S. political debate has been that the minimum wage keep pace with inflation (even Mitt Romney was for this briefly – after he was against it and before he wasn’t sure any more).

If you think about it for a second, a minimum wage that keeps pace with inflation is a fairly pathetic aspiration. It means that our lowest-wage workers get to have their living standards stay the same forever, even as the economic pie keeps growing with increases in productivity.

Wages – and minimum wages – that keep pace with productivity growth express a different and completely practical aspiration: the idea that workers at all levels should share in the expanding economic pie. Fair reward for hard work. Even sounds like a fundamental American value. Let’s get back to it. If we did, Charlotte might even come home.

News & Notes June 25, 2012

The Supreme Court ruling on ObamaCare is expected today.  Consensus seems to be that the Roberts Court will strike it down.  So far this court has backed the U.S. Chamber of Commerce 100% on its rulings.  Elections do have consequences.

Focus on SCOTUS is increasing as the result of the total corruption of our democracy because of Citizens United.  When 30 billionaires can funnel a billion dollars into a single campaign we no longer have a democracy.  Meanwhile Justices Alito and Thomas are getting heavy criticism for their purely partisan work.  Clarence Thomas’ wife works for a think tank opposing the Affordable Care Act.  His household gets money from those working to strike down the law.  

Fast & Furious continues being a focus of the news.  The failed program begun under George W. Bush ran guns into Mexico in the hope they could be tracked.  It failed.  Concern and outrage by the Right is missing the larger issue:  the huge flow of guns from this country into Mexico fueling the rampant violence and destabilization.

The student loan interest rate issue and a transportation bill both need to be passed this week.  Is the Tea Party House capable of passing anything meaningful and progressive?

A disturbing article about a Justice Department suit against two polygamous towns is required reading.  Polygamy is illegal and residents of these Utah/Arizona border towns are openly discriminating against their non-polygamous residents to the point of destroying their crops and killing their dogs.

East coast sea levels are rising due to global warming.  How much evidence do morons need before they stop believing what they hear from Rush and Fox?  The oil companies are fueling this denial so they can continue destroying the planet for profit.  Imagine the chaos if tens of millions of people are displaced all along the east coast?  How much will that cost?

It’s time for an increase in the minimum wage.  Low wage workers are actually earning less than thirty years ago due to inflation.  Places like Santa Fe which have living wage minimum wages prove that higher wages don’t mean fewer jobs.  The business community constantly rolls out this debunked argument when the issue comes up for votes.  In Santa Fe, where the minimum wage is now $10.29 they now have more people working in the hospitality sector, a center of low wage workers, than before 2008.  Their high minimum wage has not affected employment.

A Philadelphia jury convicted Msg. William Lynn of child endangerment last Friday.  Two landmark child molestation trials ended in Pennsylvania on the same day, both with convictions.  The Catholic Church must pay for its disregard of morality.  Penn State’s mistake wa snot shuttling Sandusky from campus to campus to better hide his abuses.  It worked for the Church for decades after all.

Voters keep electing car dealers to Congress then are mystified when the corrupt businessmen become corrupt Congressmen.  Have you ever dealt with an honest car dealer?  There’s no such thing.  The latest is Florida’s Vern Buchanan.  At least this corrupt Buchanan isn’t from Pennsylvania but we have our own car dealer in Congress:  Mike Kelly in PA-03.  Before that we had Don Sherwood in PA-11 who lost after getting caught choking his mistress.

I come from a family of teachers.  My Mom was a special education teacher, a sister is a college professor, another a retired guidance counselor and two more teach in local high schools.  When I hear idiots complaining about teachers it makes my blood boil.  They have no idea how hard these jobs are, especially nowadays.  Kids who have no interest in learning because their parents fail to instill a love of it in them when young challenge every teacher.  Would you want your job dependent on such kids?  Teachers are vastly underpaid when CEO’s earn billions.  Here’s a suggestion on how to pay teachers, gotta love it.

There are so many important areas being cut by Gov. gasbag so he can shell out tax credits to energy companies it’s hard to keep up with all of them.  The Times-Tribune covers how cuts are affecting day care centers.

Congratulations to new AFSCME leaders Lee Saunders (President) and Laura Reyes (Sec-Treasurer).  Saunders succeeds Jerry McEntee who retired after a good tenure.

In yet another tragic shooting of a Black kid by an angry white man are we entering into a race war where White men are openly killing African-Americans?  This seems to have been the real motivation for Stand Your Ground laws.

Fox News is so stupid not only can’t they get facts straight (of course they don’t want to when they can just make them up) but they can’t even get people right.  In their latest flub they showed a picture of Gov. Mitch Daniels instead of Jerry Sandusky.  It may be a freudian slip though since Daniels is screwing Indiana the same way Jerry screwed his kids.

The Supreme Court did strike down Arizona’s “papers please” anti-immigration law this morning.  But they also struck down Montana’s law against unlimited corporate money in politics.  This is a double down on Citizens United.  From the Brennan Center For Justice:

“The 2012 elections make one thing clear: unlimited spending by super PACs and secretive nonprofits is corrupting our political process and threatens to swamp our democracy,” said Adam Skaggs, senior counsel in the Brennan Center’s Democracy Program. “Increasing numbers of Americans believe our government is bought and paid for by special interests and that their votes don’t matter. By not taking this case, the Court missed a critical opportunity to rein in some of the worst excesses of Citizens United, and other rulings, that created this super PAC mess.”

Montana banned corporate election spending for more than 100 years as a result of a dramatic history of efforts by big companies to capture the state government. The state of Montana compiled an extensive and powerful factual record that demonstrated how unlimited corporate spending previously held the state hostage to mining companies and still poses severe threats to Montana’s elections and government. For the Court to strike down the state’s anti-corruption law without even reviewing that record is a serious mistake.