Latest / We Can Do Better / Voters in States and Cities Get It: Workers Deserve a Living Wage
Transcript
- Fran Quigley: Hello and welcome to We Can Do Better, a podcast about ending poverty in our time. My name is Fran Quigley. I'm a law professor. I go to eviction court each week in our community of Indianapolis with my students. And there we represent some of the millions of people in our country who are not just facing the loss of their homes, but they're also skipping filling prescriptions. They're also, unfortunately, even going hungry, despite living in the richest nation in the world. Hence the title of this podcast, We Can Do Better. Other countries already do far better. The US has often done better in the past. So this podcast lifts up the many people and organizations who are working to make housing, healthcare, and a decent life enforceable human rights for all. Now we've mentioned before on the podcast that a lot of the folks we see getting evicted are working long hours at difficult jobs. We see folks that are in our courts that are retail workers, they're home health care workers, they're food service workers, but they're just not getting paid enough by their employers. To keep themselves housed. So we are longtime fans of the Economic Policy Institute, the nonprofit, nonpartisan think tank that has been working for several decades now to counter rising inequality, low wages, and weak benefits for working people. And we're excited today to welcome Dave Cooper. Dave is the director of the Economic Analysis and Research Network, the acronym is ERN, E-A-R-N, a national network of nearly 60 state and local level policy, research, and advocacy organizations. That are coordinated by the EPI. Dave himself has researched and written and testified on the minimum wage, on wage theft, social insurance, and a host of other issues connected to working people because the EPI really is the go to source for economic analysis and data on how policies impact working people. So, Dave, welcome to We Can Do Better. Dave Cooper: Great to be here. Thanks for having me. Fran Quigley: Yeah, we're excited to have you because you have some good news to share, which is the theme of we can do better a little bit. And it so under on the national stage, under this administration and this Congress, but but as you can attest under previous administrations and previous Congresses, workers haven't been making many gains. But that's not true at the state and local level, including here in twenty twenty six. Could so can you share a little bit of the the good news and the progress that's been happening across the country Just not at the federal level. Dave Cooper: Yeah, well the the progress, the thing that we can celebrate is all of the action that has happened to raise state and local minimum wages. And this is a trend that has been building for more than a decade now. we had just this past year on January first, over eight million workers got a raise because of state level minimum wage increases that took effect on January first. There were nineteen states That raised their minimum wages on January 1st. And then this past July, there was another two states, Oregon and Alaska, that raised their minimum wage. The District of Columbia raised its minimum wage. And then you also had 14 local jurisdictions across the country that have set higher minimum wages for their localities. So these are city or county level minimum wages, and all told that was another. 360,000 workers that got a raise as a result of those increases in July. So, you know, as you alluded to, there's a lot of reasons to be pessimistic about the current state of our economy for working people. But because of the actions of lots of advocates and and smart lawmakers across the country over the last several over the last several years, we've put in place policies to lift pay for the lowest paid workers. in in many states, in most states across the country. Notably not all, but in many states low wage workers are earning more than they would have otherwise. Fran Quigley: And in many of the states, those are places that have states have gone red or at least they've they voted for I know that sometimes there's actually been referenda that increased the minimum wage while folk while the majority voted for Republican candidates. So you mentioned the advocates and that's an I know who you work with and and in focus in your work with earn. You know, what what does work? What it what what are the effective messages and campaign approaches that that do cause the legislators and and actual voters to support minimum wage increases. Dave Cooper: Well well the truth is the majority of the public supports raising the minimum wage. It's really only Republican lawmakers in office who tend to be opposed to it. you mentioned that minimum wages have been raised even in red states. I mean that was true, you know, probably the clearest example of this was Florida back in I think it was twenty twenty four when they excuse me, twenty twenty, when the state went for Donald Trump, but the voters overwhelmingly passed a a ballot measure to raise the state minimum wage to fifteen dollars. And then this has been replicated in since then in Missouri, in Nebraska. and so the the truth is most people understand that you have to set a floor that is at a reasonable level for for wages that allows folks to afford their basic needs. And over time, you know, that that target has changed, but The fight for 15, when they put that number out there, it just really galvanized people to recognize that we should be setting labor standards at a level that would actually allow people to lead a decent life. That was all the way back in 2011, I think, that the fight for 15, maybe 2012 called for that. And since then, we've had a lot of states that again, either through legislation or voters at the ballot box, have have elected to to adopt these higher wage standards. So that now we have 30 states plus the District of Columbia that have set minimum wages above the federal 725. And I think it resonates because you know people recognize that people need to earn more. And we've really had a sea change in economists thinking about the minimum wage. It used to be it used to be the conventional wisdom based upon the the most basic sort of supply and demand textbook models of wage. of of the economy and and minimum wages that you know economists believe that if you raise the minimum wage it's gonna lead to job loss. This is sort of the the basic understanding. But over the last 20 years we have just had more than that 30 years, we've had lots of new high-quality research coming out that has shown time and time again that the minimum wage generally does exactly what we want it to do. It raises pay for low wage workers without having any sort of meeter measurable impact on on job prospects for low wage workers. And we could talk more about it, but that has, you know, the thinking has really changed around what the minimum wage does for folks. Now it's generally viewed as a policy that could be very helpful with very little, if any, negative consequences. Fran Quigley: Yeah. And I think that we will in our show notes certainly link to EPI has put out some terrific guides on just confronting the myths about the minimum wage increases that it's gonna cause incre dramatically higher prices, that it's gonna cause job loss, it's gonna cause jobs to move other out out of those jurisdictions. So we'll put a a link in there. But can you tell us a little bit like what the numbers have been when you when you talk about fight for fifteen? I do not I've I wish I had. I have fight for fifteen hats. I've got fight for fifteen. I'm I'm old enough that I was out in front of the McDonald's in Indianapolis and and other Burger Kings, et cetera, with the Fight Dave Cooper: Mm-hmm. Fran Quigley: for Fifteen movement and and placards. But But the actual minimum wage in some places has actually exceeded that, right? So I mean what what are the what's kind of the range of of what you see in these different thirty s the thirty states that have higher minimum wages than seven twenty five? Dave Cooper: Yeah, so some I mean some of them are just s still sort of just above the mid the federal minimum wage, the the one I'm thinking of. West Virginia, I think is the lowest at eight seventy-five. But then you go all the way up to Washington State, where the minimum wage today is seventeen dollars and thirteen cents per hour. In the District of Columbia, it's even higher. It's eighteen forty in DC. so you know, you have minimum wage workers in some parts of the country, like DC. making eighteen dollars an hour doing the exact same job that someone in say Mississippi, Alabama, Georgia might only be getting seven twenty five. It's a it is a it is a wide range. but, you know, talking about positive momentum, this year one another thing we can celebrate is that there's actually more workers today in states where the minimum wage is fifteen dollars or higher than than someplace less. So that a We have a majority of of workers today are in states where the minimum wage is at least fifteen dollars, which is a which is a huge success and really a testament to the strength and and the vision of those five for fifteen workers. Fran Quigley: Yeah. How how what's the response when folks say, Well, I and I'm talking to you from Indiana where unfortunately our minimum wage is just seven twenty five an hour. And you didn't you kindly didn't list us with Mississippi, but we we oftentimes do get listed there. But you'll have folks say, Well, what's the point of raising the minimum wage from seven twenty-five to let's say nine dollars an hour or ten dollars an hour when most jobs and in in retail and home healthcare, et cetera, again we see folks in in court with those jobs, they do usually get paid more than seven twenty five. So is there a real need to raise the wage, minimum wage in a way that's gonna impact folks who do get paid a little bit more than that now? Dave Cooper: Yeah, absolutely. So the there's two things I would point to. It is true that market forces today are probably leading to the effect where the lowest paid jobs, even in states like Indiana and others that are still at the Federal 725, most of them are probably paying above that just because employers have to in order to attract and retain staff. Now that being said, there may be some workers that for whatever reason don't have much power in the labor market. These are, you know, sort of by definition the most vulnerable folks in the economy. Some of them may only be got be getting 725. I mean, you've done work on wage thefts, you know, there are people out there who, whatever their circumstances may be, maybe they're disabled, maybe they have some you know, care responsibilities such that they don't really have a ton of flexibility in the hours they can work. Maybe there's some other reason why, maybe they're formerly incarcerated. you know, they're all of these things may prevent them from having a ton of bargaining power to try and negotiate for better pay or to or to to find a job that that pays better, you know, they may be getting as little 725. And for those folks, we just got to raise that standard. But for everyone else, you know, when you raise the minimum wage, it doesn't just benefit workers who are at the absolute bottom of the pay scale. It has what we call ripple effects or spillover effects that benefit folks who are making slightly higher up. the wage scale. And it's easy to think about this. You know, if I'm making, let's say, twelve dollars an hour and the minimum wage goes up to eleven dollars an hour, well now someone who's starting in a job, you know, at my employer, they're getting eleven dollars an hour. Maybe I've been there for five years and and I say to my boss, hey, you know, the the new guy's starting out at eleven, I'm only making twelve, you know, don't you think I should Don't you think I should get a raise as well? And so employers make those adjustments. They adjust those internal pay ladders in order to create some to maintain some distance between new entrants and more experienced folks, and that leads to pay raises for folks who are further up the ladder. And so by failing to raise the minimum wage above 725, even if most employers are paying more, we're basically leaving money on the table for low-wage workers who would be. earning higher paychecks today if we had been raising the wage floor more more routinely over the last two decades. Fran Quigley: Yeah. Yeah. And and just to circle back, I was don't want to bury the lead of who may be concerned about this. You mentioned these these wonderful minimum wage levels in in state of Washington, Washing the District of Columbia, et cetera. Again, just to make it clear, the data sh show that when you raise the wage that high, it's not people are going to lose their jobs. People are not going to be the the McDonalds is not going to suddenly close down because they have to actually pay a living wage. So that's Dave Cooper: The Fran Quigley: just to emphasize that's that's what the numbers have shown over the years when you have these natural experiments, right? You have you have adjoining states that some raise minimum wage, some don't, right? Dave Cooper: I mean, we have a an enormous body of literature at this point. I mean, arguably the effect of the minimum wage on employment is probably the most studied topic in all of labor economics. And the the research overwhelmingly finds now that those increases have not led to a meaningful change in employment. and y that's exactly right. I mean, you go to Washington State, they still have lots of retail, they still have lots of McDonald's, Starbucks, you name it. So there are still people working in those jobs. even though they're making, you know, more than double what their counterparts might be making elsewhere in the country. Fran Quigley: Well, I speak to you, as I mentioned, from a state that we have just a a little background and and we're not the only ones in this situation. We have the our state minimum wage is the same as the federal minimum wage, seven twenty five an hour only. We have no access to referenda to change that in our state. And we have preemption laws that prevent Dave Cooper: Mm-hmm. Fran Quigley: the cities from raising the minimum wage higher than the state level. So that makes us in places like Indiana very interested in the national. minimum Dave Cooper: Mm. Fran Quigley: wage and the federal minimum wage. So EPI has a a a new proposal or at least a rev refined proposal about raising the federal minimum wage. What what would that look like? Dave Cooper: Yeah, so this is a paper that we put out earlier this year that tries to introduce a new way of thinking about where we should target minimum wage policy. For a long time, you know, it's it's and understandably it's it it's been easy for folks to latch onto a particular number and say, Okay, fight for fifteen. We need fifteen dollars. Today fifteen is arguably not high enough in a lot of places, arguably not not high enough anywhere in the country. So where then should we set the minimum wage? And And to answer that question, what we did is we looked at all of that research that is analyzed, sort of how high you can set the minimum wage and still not see any measurable effect on employment. And that body of research basically looks at minimum wages that have gone as high as about two-thirds the median wage. Now, the median wage is the wage of someone who is at the exact middle point in the wage distribution. If you were to line s line everyone up from the lowest paid worker to the highest paid worker. This is the person who's right in the middle. Two-thirds the median wage. We have studied, researchers have studied instances of minimum wages being raised up to that that level, that two-thirds of the median wage, and found basically no effect on employment. So that tells us that we could at least raise the federal minimum wage that high. And we're we can pro we can be confident that that's not going to have any. significant negative effect on employment. So that's what we are advocating for in this paper, that we need to set the federal minimum wage at two thirds the national median wage. Now what does that mean in in dollar terms? It basically means that you would take the minimum wage to I think it's seventeen dollars pretty quickly. Seventeen dollars in in today and then excuse me and then Fran Quigley: I think it projected twenty dollars in twenty thirty, if I'm reading right. Yeah. Yeah. That's alright. Dave Cooper: That's right, twenty dollars in twenty thirty. That's right. Yep, sorry. Fran Quigley: I told you I'm a fanboy of I EPI. I've read I've read your I've I've read your paper. Dave Cooper: Yeah, no, that's great. so I mean, these are significantly higher minimum wage levels than than we've been pursuing in the past, but this is these are wage levels that the research literature backs up. I mean, we could get to twenty dollars by twenty thirty and it would lift pay for tens of millions of workers in this country. And again, the best economic economic research that we have suggests that this isn't going to have meaningful impacts on those workers' job. situation. So that's great. I mean, opportunity to raise pay for a lot of low pay wage workers and still have a well functioning labor market. Fran Quigley: Right. And and you've mentioned in in your in your work quite often, and EPI focuses on this, is that this the low wages are not evenly distributed across the demographics of of the community. And frankly, it's true in eviction court too. You've you see people of color, you see women, you see y younger parents, etcetera, who are disproportionately losing their home. And my understanding is that's true and not a not surprisingly in terms of who's subject to very low subliving wages. Is that is that right? Dave Cooper: Yeah, I mean all of the all of the groups that have traditionally faced some sort of labor market disadvantage are the same groups that tend to benefit more from higher minimum wages. So I'm thinking obviously about women workers, workers of color, disabled workers, formerly incarcerated workers, immigrant workers. these are all folks who who who face have faced long historical disadvantages in the labor market and and that has oftentimes led to them being segregated into some of the lowest paying jobs. And so consequently, if we raise the minimum wage, it's gonna disproportionately boost pay and benefit those groups of workers and and lead to a more more equitable labor market where more folks are being paid wages that are able to sustain them. Fran Quigley: And these same workers in in these same sectors, and our observation has been anecdotally, and you've seen that in on the big picture, they're also struggling, even when they're getting a decent wage, which unfortunately usually they're not, but then they struggle with getting consistent hours, then they struggle with getting predictable hours, then they struggle with access to to benefits, etc. So I just wanna point out that EPI, you you you do research and advocacy on on those issues as well. So again, you find this the same challenge in terms of of getting a consistent and predictable amount of work hours that that does allow a household to have enough funds to afford their rent and utilities, etc. Dave Cooper: Yeah, I mean there's there's so many factors that influence job quality. I mean, as you mentioned, access to benefits, scheduling. you know, there there's just lots of dimensions by which workers are disadvantaged relative to their employers in the labor market. I mean, one thing that we talk about a lot at EPI is worker power. I mean, how much power do individual workers have to try and negotiate around the the quality of their jobs? And the reality is in most cases, very little. That is, unless they are members of a of a union and the union's able to negotiate on their behalf. but for most low wage workers, particularly in sectors like retail and fast food and and other industries where there's a high proportion of low wage workers, they're just, you know, unions do not have there aren't there there isn't that much unionization. And so a lot of workers have to, you know, fight their battles on their own. And and that leads to many of them not having the negotiating power to to address all of the challenges that you're describing around work schedules, job quality, benefits, all of those things. Fran Quigley: Right. And and again, if listeners are not fully aware of this, Economic Policy Institute does a lot of terrific research on the impact of unionization, about how that does increase not just wages, but also benefits, also stability, also hours, predictability, et cetera. So that's probably another podcast episode. Have you back on, Dave, or or a colleague. But and one other thing, and I can't remember whether it forgive me if EPI's done that research before, but But again, we see it anecdotally, and I I believe there's data on that too. Is it we mentioned disproportionately women getting paid these low wages, and disproportionately women are victims of domestic violence. And we see folks who have stayed in relationships and in households in very dangerous situations, sometimes with some really horrible outcomes because of money, because they they don't have so raising the minimum wage among all the other wonderful. impacts of people staying housed, people staying fed, people s getting access to healthcare. it it actually saves lives and and unfortunately anybody who's done the work like we've done, we have we all have our own anecdotes about that, about people staying and disproportionately women staying in a in a very dangerous situation because of low wages. Dave Cooper: Yeah, I mean, there are a lot of those sort of knock on effects of of higher wages. And and there's there's actually a a pretty substantial body of research literature trying to t that looks at some of the, for example, public health benefits of higher minimum wages. Higher minimum wages tend to lead to less smoking. maybe people are less stressed and they don't feel or they're or maybe it'll it gives them the resources that they need to to do a treatment program or to pay for you know, whatever medications they may need to do those things. Higher minimum wages are associated with less recidivism. So fewer people being reincarcerated. So the and and you know there are other there are other positive benefits that have been studied, but the the the implication is the same that if you if you can do things to material and pro materially improve people's economic position, it allows them to take other steps to improve their lives in other ways. And so it's just you know, there's a there's a lot that we can say about the positive effects of minimum wages. And thankfully the research has now caught up to show that the the the things that we were concerned about, the the sort of unintended consequences that folks have been concerned about, namely the job loss, those have never really materialized. Fran Quigley: Well, it it's it seems like this is almost superfluous for us to even have this conversation because we have now legislation that's passed that's called no taxes on tips, no taxes on overtime. And I I don't wanna h let you leave without letting the listeners know that you've written on this topic and EPI has studied this topic. And frankly, for me and others trying to make sense of this, that's the first place that that I turn turn to is Economic Policy Institute. So We've had folks have read the read about this. They've seen the headlines. my goodness, we have now new reforms that talk about no taxes on tips, no taxes on overtime. That's gonna help some of these workers in a just a an amazing way. We've been promised. So what's the reality here on the no taxes on tips, no taxes on overtime promises? Dave Cooper: Yeah, Fran, I hope I hope the I hope your listeners can hear the sarcasm in your voice. Fran Quigley: Yeah. Dave Cooper: you know, no no tax on tips and no tax on overtime are really are are frustrating pieces of policy because they're gimmicks. and and that's not to you know that's not to to disparage folks who are low low paid and and are taking advantage of these tax benefits. I I want those folks to to have more take home pay. but the reality is that no tax on tips benefits very few workers. The benef and the benefits are very small relative to what they would be if we had, for instance, raised the minimum wage instead. And they're temporary. Not only that, they they may lead to some bad behaviors by employers. So no tax on tips, you know, there's there's basically three million tipped workers roughly in the country. And You know, th those are folks, many of them are in restaurants, but it also includes folks in other occupations, nail salon workers, massage therapists, there's lots of different tipped occupations. You know, yes, the the policy was that was adopted in the one big big bill, whatever you want call it, allows those folks to deduct up to twenty five thousand dollars in tipped income from their income taxes. again, for those that will benefit from that, that's that's fine. The estimates are that those folks the average beneficiary will will get about a fourteen hundred dollar tax break as a result of that. But that average is really skewed because you have some tipped workers who do quite well. They may work at a you know a white tablecloth fancy restaurant and be making pretty good income from tips. They benefit a lot. The vast majority of tipped workers are low wage workers. You know, if you've got your waitress at Denny's, you know, she's working hard. She probably isn't pulling in that much money. To have a large income tax liability. And so among the bottom 20% of workers, many of them are not going to get any pay increase as a result of this policy because their their earnings are just so low that they just don't owe that much in federal taxes. So they're not going to get really anything from this new tax breaks. On the other hand, if we had just raised the federal minimum wage in along the lines of what it been most recently proposed in Congress, which was I think it was $17 an hour. I mean that's the the average benefit from that for low wage workers was about $3,200 per year. And though and those are benefits that are targeted directly at literal, you know, by design, the lowest wage workers in our economy, whereas the no tax on tip policy, it's regressive. The b the the benefits are larger for folks who are higher earnings. So it's really too bad that that is the policy that we ended up with. You know, the other thing I'm I I mentioned earlier that could be sort of an unfortunate consequence of this is that because of that tax benefit, we could see more employers trying to shift workers into tipped positions Fran Quigley: Mm. Dave Cooper: or trying to shift more of the work that's done in their business place onto the tipped staff. because for for employers, you know, I don't know if your listeners know this. Tipped workers can be paid less than the minimum wage on the assumption that their tips are going to bring them up to 725. In in Indiana, Indiana's a state that uses the tipped, the federal tipped minimum wage level, which is just $2.13 per hour. I mean, that is just bonkers to me that you could be, you know, working hard at a restaurant or cafe or whatever and only being paid $2.13 by your employer on the assumption that tips are going to get you up above that $7.25. With no tax on tips, you may have more workers that are willing to take on that sort of tipped role because they think that they're gonna get a tax break as a result of it. That means that, you know, one of the biggest beneficiaries of the policy is actually the employers because they're Fran Quigley: Mm-hmm. Dave Cooper: potentially capturing some of those benefits. Fran Quigley: What a shock. No, yes, yeah, sarcasm inserted here. What a shock that we're not getting for this particular administration and Congress. I'm not gonna put those words in your mouth, the the actual help for for working people. And it's it's and I know some when you talked about the the folks l making low wages don't typically have much or any federal income tax obligations. But of course they pay payroll taxes, right? So it's always something when when Dave Cooper: They do. Yep. Fran Quigley: we talk about, my goodness, only rich people are paying income taxes, which of course many of them aren't doing that. But we'll talk about that in a future episode, how they're bypassing that with wealth instead of income. But every worker is pay and payroll taxes. Dave Cooper: Right. And they're and they're paying sales taxes at the state level in most cases and sometimes state income taxes too. So so they are they are contributing, but you know, they're they're not at the federal level their income tax liability might be low. Fran Quigley: Yeah. Yeah. Well, therefore, I appreciate the way you circled right back to it. We do need higher minimum wages. we need at the state level and the local level. And and you and Ern and all of your partners across the the country are doing a great job. Thank you for that. I wish you could have more success in places like Indiana, but that's when we're gonna need our federal income tax increase, I think. Or a federal not income tax increase, we're gonna need federal minimum wage increase. So we're cheering on that Dave Cooper: Well well but Fran Quigley: proposal. Dave Cooper: well what I always say, Fran, is that if you know again the majority of the public supports raising the minimum wage, if Republican lawmakers would just listen to their constituents, then we could get this done. Fran Quigley: Okay. Okay. Well, that's the rallying point for all of us in in every state, right? but particularly in the red state. So, Dave, thank you for making the time for this conversation. Thank you for what you and your colleagues at EPI are doing. We will have plenty of links in the show notes, but again, you can just look at Economic Policy Institute's website, EPI dot org, and all your socials, about all the terrific research you're doing. And it's not Frankly, as as someone who's not a social scientist or an eco economist myself, I can I can attest to you and many, many students over the years, EPI's product is always very user friendly, very understandable. You don't have to have a PhD in economics to understand what what you all are saying, especially when it boils down to working people deserve to get paid a living wage. So thank you for that work. Thank you for taking the time to talk with us today about it. And For all of our listeners, remember this is a very good example today that we can do better. Dave Cooper: Appreciate it.