It’s Not Just the Minimum Wage—It’s the Wage Index, Too

Eight million people have already seen their wages increase significantly thanks to the Fight for $15.  The movement has taken many paths—leading to new city and county laws, state administrative action for targeted industries, breakthrough union contracts, and even businesses acting on their own.  Millions more will be added to the ranks of those receiving wages if California and New York increase wages for all workers across their states.

It is a remarkable resetting of labor markets in places like Los Angeles where more than 40 percent of workers will get a wage increase.  These significant gains promise to jumpstart the fight against poverty and to restructure our entire economy.

Moving 40% Forward

As one billionaire has argued, to prosper businesses need customers with money in their pockets.  Yet with so many workers paid miserly wages, too many customers have nearly empty pockets.  So while many say we need to tackle extreme inequality with so-called middle-out economic policies, the broad impact of the $15 movement suggests that we can drive the economy forward from the back of the wage structure.

The national conversation now needs to turn to how we can lock in any wage gains.  We will not sustain them if we index the new wage standard to inflation.  Just as we have reinvented the idea of the minimum wage, we need to rethink the wage index as well.  The Leap Forward Project proposes indexing it to personal income per capita.

Year by year over the next generation, if a $15 wage is adjusted to the conventional inflation measure it will fall further and further behind our economy: based on historical trends, it will fall 40 percent behind productivity gains by 2040, and then 96 percent behind by 2060.  A $15 wage indexed to inflation will therefore worsen extreme inequality and workers will once again not have enough money in their pockets to drive our economy forward.

On the other hand, if wages are indexed to economy-wide productivity it is possible they will advance too quickly for some businesses to keep up.  As legend has it, the $15 per hour level was chosen as a target because it represents the halfway mark between a wage that had kept pace with inflation and one that had kept pace with productivity.

Rewarding the Many

What index makes sense today for union contracts and government mandated wage standards?  The Leap Forward Project analyzed several possible economic indexes, looking at data for the United States and California from the onset of extreme inequality (1979) to the current period (2013).

For each, we calculated what the 1979 minimum wage of $2.90 would be today had we used the given index.  The results might be surprising.

fin possible wage index

Consider the first three possible indexes:

  • A $2.90 minimum wage indexed to the return on wealth, (nationwide): This huge increase to $35.10 reflects the shift of our economy from rewarding the work of the many to rewarding the wealth of the few.
  • A $2.90 minimum wage indexed to the median wage (California): This relatively modest increase to $9.34 reflects the problem of the stagnant middle-class.
  • A $2.90 minimum wage indexed to the 95th percentile wage, (nationwide): This significant increase to $13.08 reflects greater increases garnered by skilled workers.

What does this analysis tell us?  Indexing to the median wages as proposed by Congressman Scott and Senator Murray is little better than indexing to inflation if wages continue to stagnate.  The embattled middle-class for now does not have the muscle to drive our economy.

Indexing to the 95th percentile wage, while providing significant increases, is based on the wrong story of how to restructure our economy.  It is not about a janitor’s wages keeping up with doctor’s pay—some might dismiss that as “the bitter politics of envy”.  It is about how to drive prosperity for both janitors and doctors.

In fact, the story of the “back of the wage pack” is not that different from the very front of the pack.  Wage gains denied to most of us appear to have become assets for the richest of the rich.  From an economic perspective, we need an index that in part reflects not only gains in wages and incomes but gains in the value of assets as well.

We need an index that will move ahead faster than inflation, but not necessarily as fast as the overall economy.  The fourth index—personal income per capita—fits the bill.  It includes income from wages and salaries along with dividends and rental income; it does not include capital gains.  And if the 1979 minimum wage had been indexed in this manner, it would have reached—wait for it—$15 this past New Year’s Day.

The Fight for $15 has achieved considerable momentum. For that momentum to create lasting change we need to lock in these hard fought gains. Each year our new $15 standard needs to increase so that workers have enough in their pockets to help drive our economy forward. And in the years to come, we need more policy innovations like $15 so that we can fully tackle extreme inequality and achieve enduring prosperity for all of us.



Thousands of Americans Could Face Hunger Due to Loss of Food Assistance

While economists have declared the recession over, we know that millions of Americans throughout the nation are still struggling to find full-time work. For them, simply getting by can be a daily struggle. Many are forced to make impossible choices between paying critical bills, getting lifesaving medication, and putting food on the table. Often the only assistance available to help them get enough food to eat each day is the Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps. But more than half a million struggling Americans may soon lose this lifeline.

SNAP reduces hunger and hardship for millions of Americans. The vast majority of those who receive SNAP are seniors, children, people with disabilities, or are working. For millions of others, many of whom may have lost a job through no fault of their own, SNAP provides an important stepping stone to help them look for work and get back on their feet.

Despite this, 23 states around the country are beginning to implement a harsh time limit on SNAP that will cut off assistance for over half a million of some of the poorest Americans. Federal law limits these individuals, ages 18 to 49, who are out of work and deemed able-bodied and not caring for children, to just three months of SNAP out of every three years—unless they are working or in a work training program for at least 20 hours per week.

While some claim that this harsh time limit is a “work requirement,” the policy applies regardless of how hard someone is looking for work or whether employment or job training is even available. And the reality is that states have no obligation to help those who are struggling find work or provide a work training slot. Unsurprisingly, most don’t.

The individuals who will be impacted by these cuts are a diverse group that includes not just unemployed workers seeking a job or job training, but also part-time workers who may not be able to find enough work to meet the 20-hour threshold. It also includes people facing significant barriers to work: A study conducted by the Ohio Association of Food Banks found that one-third of those subject to the time limit have disabilities or serious health conditions, 40 percent lack access to reliable private or public transportation, and 13 percent report being caregivers for a parent, relative, or loved one. Many of these individuals also do have children they are trying to support, the children just aren’t living in their homes. Many are also military veterans. Most of those who will be cut off don’t qualify for any other form of assistance, and struggle to get by on an average income of just $2,000 a year.

States that have already implemented such time limits have seen dramatic reductions in the number of people receiving SNAP. But cutting hundreds of thousands of struggling Americans off of nutrition assistance—which averages just $1.41 per person, per meal—won’t make it any easier for them to find work; instead, it will only mean more strain on charitable institutions that are already having difficulty keeping up with rising need. While food banks, soup kitchens, and churches play an enormous role in helping to reduce hunger, they simply cannot do it alone.

Policymakers must take action to preserve access to nutrition assistance.

While it is unlikely that Congress will act in time to stop these individuals from losing SNAP, states can take steps to limit the impact of these cuts. First and foremost, any area of a state with sufficiently high unemployment or a lack of jobs can have the time limit waived. Next, states must carefully screen individuals to ensure that the time limit is not incorrectly applied to exempt individuals, such as chronically homeless people. And finally, states can provide job training services that not only allow individuals to maintain eligibility for SNAP, but can also—if well designed—serve as a pathway to a well-paying job. Even with these steps, there are still a great many vulnerable individuals who will be impacted by these cuts. It’s ultimately up to Congress to get rid of this draconian rule.

The facts are simple: limiting how long people can get help putting food on the table will not mean that they will be able to find more jobs or get more hours. It simply means that they will be hungry.



Flint Isn’t the Only Place with Racism in the Water

Last month, Michigan Gov. Rick Snyder (R) delivered his fifth State of the State address, a ceremonious speech that typically presents the governor’s legislative priorities and vision for the year ahead. But instead of talking about pressing priorities—such as the need to reform the state’s public education system, improve its job market, or invest in its infrastructure—Gov. Snyder was forced to apologize for his government’s failure to provide clean, safe water to the people of Flint, Michigan.

The Flint water crisis began in April 2014 with an effort to cut the budget. Government officials chose to switch water access from the clean Lake Huron to the more corrosive and polluted Flint River. Almost immediately residents began complaining of hair loss, rashes, and tap water that looked and tasted strange. Yet, despite calls from concerned residents, city and state officials assured the community that the water was fine. Former Flint Mayor Dayne Walling (D) even drank the water on television to dissuade any further concerns. For months, nothing was done.

LISTEN: Curt Guyette, a journalist for the ACLU, speaks with TalkPoverty Radio on the Flint water crisis

At the heart of current national outrage is the impact that tainted water will have on Flint residents—especially the city’s children. A study by the Centers for Disease Control and Prevention found that even minimal lead exposure can cause cognitive and behavioral issues, including an increased propensity toward violent behavior. In fact, children with lead poisoning are seven times more likely to drop out of school and six times more likely to become involved in the juvenile justice system than those not exposed to lead. Moreover, the impact of lead exposure is irreversible.

The Long History Of Environmental Racism

In the midst of this knowledge, it is hard to ignore the facts that 56 percent of Flint’s population is African American and most of the city’s residents live paycheck to paycheck. According to the 2015 Census, more than 40 percent of residents are living below the federal poverty level. Once the booming Vehicle City where General Motors was born, Flint has since lost its industrial base and, with it, government investment in all forms of infrastructure. Support for the city’s schools, public transportation, and employment has fallen by the wayside.

Still, how is it possible that, in 2016, low-income, black Americans are denied access to clean, safe water? Unfortunately, the roots of this injustice run deep.

Environmental racism is entwined with the country’s industrial past. At the beginning of the 20th century, zoning ordinances emerged as a way to separate land uses in order to protect people from health hazards. Over time, however, city planning and zoning ordinances focused less on public health and more on creating idyllic communities, protecting property rights, and excluding “undesirables.” In other words: The least desirable communities were reserved for discarding waste and marginalized people alike. 

By the 1930s, federal leaders began to make large investments in creating stable, affluent, and white communities in the suburbs, while giving local governments the autonomy to neglect low-income communities and communities of color. New highways and waste facilities were constructed in marginalized communities, where they cut through businesses or homes and exposed residents to excessive pollution.

In his seminal book, Dumping in Dixie: Race, Class, and Environmental Quality, Professor Robert Bullard, considered the father of environmental justicewrote:

The problem of polluted black communities is not a new phenomenon. Historically, toxic dumping and the location of locally unwanted land uses (LULUs) have followed the “path of least resistance,” meaning black and poor communities have been disproportionately burdened with these types of externalities.

Environmental racism is an issue of political power: The negative externalities of industrialization—pollution and hazardous waste—are placed where politicians expect little or no political backlash.

For this reason, ZIP codes often has more of an effect on health than genetic codes. Despite legislative efforts to dismantle segregation, it remains a pernicious problem in America today. Affluent communities still adopt exclusionary zoning codes that keep less affluent households from moving in, and African American home buyers are still shown fewer homes than whites and are often steered away from predominantly white neighborhoods.

“African Americans, even affluent African Americans are more likely to live closer to and in communities that are more polluted than poor white families that make $10,000 a year,” according to Bullard. In essence, the nation’s laws are executed mostly to protect white households and leave the rest of the country to inhale the toxic fumes of racism.

A recent study in Environmental Research Letters noted that the highest polluting facilities in the country are disproportionately located near communities of color. One of the most notorious examples of this disparity is Cancer Alley, the 85-mile stretch between Baton Rouge, Louisiana, and New Orleans that is home to more than 150 industrial plants and refineries. The deadly corridor earned its disreputable name due to the sheer number of cancer cases, inexplicable illnesses, and deaths that have afflicted its residents. The ExxonMobil refinery in Baton Rouge alone is 250 times the size of the Superdome with a surrounding population that is 78 percent people of color. Black communities and industrial sites are so closely intertwined that a number of Cancer Alley refineries include old black cemeteries that hold the remains of former slaves—a blunt reminder of just how little black lives matter on these grounds.

Standing Up for Environmental Justice in Flint and in the Nation

The injustice in Flint must be viewed as one example of a widespread problem.

The road ahead for Flint is a very long one. After the immediate crisis has been addressed, it will be years before the nation can fully realize how the state affected the lives of the children it poisoned. These families need and deserve a lifetime of support. And while the country’s outrage is correct, the injustice in Flint must be viewed as one example of a widespread problem. In order to address the root causes of environmental racism, the nation must demand government accountability and effective industry regulations, support clean energy, and commit to furthering fair housing.

All levels of government must focus on investing in and modernizing infrastructure that will protect the building blocks of our society—specifically in areas where there is historic underinvestment. A $1 billion investment in infrastructure creates about 18,000 jobs, while the same size tax cut would generate 14,000 jobs and no new public asset. There is much work to be done to ensure that all communities are safe, stable places where people can thrive.

Many Americans believe that racism can be boiled down to a sin marked by slurs and men burning crosses under the cover of night. Flint serves as a stark reminder that racism is in the air we breathe, flowing freely into our homes and down the stretch of blocks riddled with liquor stores but begging for a supermarket. There is a societal cost to this reality.

The crisis in Flint has refocused the public spotlight on environmental justice. Voters and policymakers across the country should seize this moment to address the environmental racism that persists in too many communities. If the nation does not stand up against the injustice of environmental racism, communities of color will continue to be targeted. As the country becomes more ethnically and racially diverse, communities of color must have equity in the level and quality of government-provided services. Americans must lend their voices to support not just Flint residents, but also the residents of countless other communities where racism still takes a physical toll.

This article was originally published by the Center for American Progress.



How Judicial Vacancies Threaten Access to Justice for Low-Income People

In California, migrant workers have waited over three years to hear from a federal court on whether they could proceed with a class-action lawsuit against their employer. If successful, thousands of migrant workers would receive justice for alleged wage theft in the form of backpay. But with judicial vacancies on the rise, justice has been hard to come by for these workers. And due to the transient nature of migrant labor, each passing day makes it more likely that these workers will relocate, become impossible to reach, and lose their chance of receiving justice.

Stories like this one are becoming commonplace, as the increasing number of judicial vacancies (74 at present) has led to the largest backlog of federal criminal and civil cases in American history. Yet, despite the courts’ impact on consequential and timely issues, the process of appointing a new federal judge can be arduous and slow.

As explained in our Just a Judge video, a judicial vacancy occurs when a judge retires, steps down, or is otherwise unable to perform their duties. The process from there is complex: following the president’s nomination of a qualified judge (usually following consultation with home-state senators), senators from the home state of the nominee are then responsible for submitting blue slips of paper to demonstrate their approval. The Senate Judiciary Committee then holds a hearing and vote, and only then is there a confirmation vote in the Senate.

Unfortunately, this confirmation process leaves our judicial system vulnerable to partisan obstruction by the legislative branch. Home-state senators often delay their submission of the blue-slips, and senate leadership regularly delays scheduling the requisite hearings and votes. As a result, in 2015, the Senate confirmed judicial nominations at the slowest rate since 1960, which means many judicial vacancies have remained open for months and, in some instances, years.

The average time to resolve a felony case has doubled to 13 months.

The large number of vacancies has wreaked economic havoc on communities. In Texas, which has the most vacancies of any state, a 2015 study by the Perryman Group revealed that if two judicial vacancies were filled, it would likely lead to the creation of over 78,000 jobs and an increase of $11.7 billion in economic activity by 2030. The study found that fully-staffed courts lead to increased personal income, worker earnings, and retail sales “by reducing uncertainties and the time required to resolve business disputes.”

Even more alarming is the federal backlog’s effect on criminal cases. The Constitution grants all persons the ability to be heard before the court; more specifically, the Sixth Amendment enshrines the right to a speedy trial. However, since 2009, the average time to resolve a felony case has doubled to 13 months. This can result in the creation of what are known as “plea-bargaining mills,” where defendants are incentivized to plead guilty (even if they are innocent) to end waiting periods spent in prison that can far exceed the actual sentence for the offense in question. Indeed, a criminal defense lawyer who practices in the Eastern District of Texas, stated that the delay in felony cases is often used by prosecutors as a “hammer” over a defendant’s head: “Plead guilty and you’ll be out of jail.”

It is clear that the political jousting that occurs throughout the judicial confirmation process is having unintended effects that harm everyday Americans and create instability in the judicial system. This is the same system in which, just a few months ago, the U.S. Supreme Court heard a challenge to the affirmative action policy at the University of Texas. And this month, the Court heard arguments about whether unions can require contributions from employees who benefit from union-negotiated conditions. Now, the Supreme Court is gearing up to hear oral arguments challenging President Obama’s immigration actions.

And so, in order to ensure the functioning of this vitally important system and prevent further infringement on Americans’ constitutional rights, the Senate needs to do its job and hold timely votes on federal judicial nominees. While the judiciary may not be as glamorous as the executive or legislative branches, it is vital for us to invest more time to learn about the judicial process, fill our vacancies with judges whose diversity reflects that of this country, and hold our Senate accountable for denying Americans their day in court.

Let’s start today. Learn more about the federal judicial process through this short and sweet video: Just a Judge.




Wage Theft Is an Epidemic. Here’s How We Can Help Fix It.

Although Javier*, who immigrated from Mexico with his family, routinely worked 50 to 60 hour weeks for four years in a Philadelphia restaurant’s kitchen, he was never paid properly. When Javier demanded all the unpaid wages and overtime that had accrued, his employer threatened him with immigration consequences and physical violence against him and his family. The employer also called Javier at home repeatedly to threaten him when he learned that Javier had contacted a lawyer at Community Legal Services of Philadelphia, a civil legal aid provider. Fearing that the abusive employer would act on his threats, Javier and his family spent days without leaving their home.

Javier’s experience isn’t uncommon. Our civil legal aid attorneys have also represented a crew of cleaners who were locked in a restaurant overnight while they cleaned (and not paid overtime for the additional hours) and construction workers strung along for years with partial weekly payments, among others. We have even had to sue the same employers multiple times on behalf of different workers. And the practice is widespread. A report from Temple University’s Sheller Center found that in any given work week in the Philadelphia area, almost 130,000 workers will be paid less than minimum wage, over 100,000 will experience an overtime violation, and over 80,000 will be forced to work off-the-clock without pay.

Although wage theft is illegal under federal law and under statutes in most states, enforcement is underfunded—sometimes nonexistent. This disproportionately impacts low-wage workers, who are more likely to work in low-regulation and non-union jobs where employers cut corners at their expense. But these workers—who need those wages the most—don’t know where to turn for help when they do not receive a paycheck, fear losing their job if they complain, or simply cannot afford to miss work for the several days that it takes to file a complaint and attend a court hearing. And for immigrant workers like Javier, they are often threatened based on their immigration status when they complain to their boss.

Enforcement of wage left laws is underfunded—sometimes nonexistent.

And between the small number of workers willing to complain and low financial penalties, deterrents to wage theft are inadequate to curb the practice. In Pennsylvania, for example, the Wage Payment and Collection Law only mandates a penalty of 25 percent of wages due on top of repaying the wages. Thus, if an employer doesn’t pay six workers and only four come forward with formal complaints in court, the employer comes out ahead—he pays less in fines than he would have had he paid his six workers correctly.

Unfortunately, bills that would help address these issues have languished in the legislature for more than a year despite the support of the vast majority of voters. In the absence of legislative action, we have found that local ordinances are a powerful locus of action, even though they impact fewer workers.

As the workshops of democracy, cities and municipalities also allow us to test new models on a limited scale and to identify what should be replicated on a wider scale. This was a tried and true strategy in the context of paid sick days: after an organized and effective campaign over the last few years, activists managed to pass a paid sick leave ordinance in Philadelphia last year. Similar ordinances have come out of San Francisco, Seattle, New York, and Los Angeles, among other cities.

We therefore partnered with labor and community activists to pass a local anti-wage theft ordinance that fit well within the powers of a municipal government. The legislation included three main facets, each of which was integral to the legislation.

First, an administrative enforcement mechanism allows workers to bring complaints against their employers without having to miss work and therefore pay. Making the complaint process easy and the hearing free  is a critical way to expand remedies by making them practically available to more people. Although the federal Department of Labor already offers this kind of service, it does not do so for workers who work at businesses that have less than $500,000 in annual revenue. Some states offer a similar complaint process, but their efficacy varies.

Second, the legislation requires that penalties be raised. The current penalties in Pennsylvania are shamefully low, making wage theft an economically good decision for the unscrupulous employer. By raising penalties, the ordinance should increase compliance by making wage theft a bad economic decision.

Third, the legislation allows the city to go after business licenses, further demonstrating to employers that wage theft is a poor business decision. By allowing the city to revoke or suspend a business license, we can root out the worst actors and prevent them from causing further harm (or cajole them into compliance).

With these principles in mind, we partnered with Councilman Bill Greenlee, who had led and won the seven year fight for paid sick leave, and introduced a strong bill in City Council. Boosted by press coverage of the widespread local wage theft problem, we built a broader network of community leaders and advocates, created supporting materials, wrote legal memos, met with editorial boards, and lined up workers to tell their stories. The bill passed City Council in October and was signed by Philadelphia Mayor Michael Nutter in December. The ordinance will go into effect in July 2016 and will be implemented by our new Mayor, Jim Kenney.

Despite all appearances, legislative change that benefits working families is possible, even when state politics makes it seem impossible. In order to achieve pro-working family change, activists need to alter their frame by working at the local level, rather than deal with the gridlock and lack of action at the federal level and state levels.

After all, as former U.S. Speaker of the House Tip O’Neill famously said, “All politics is local.”

*Name has been changed.