The Minimum We Can Do: Wage Floors in the U.S. Sylvia A. Allegretto, PhD Economist and Co-director, Center on Wage & Employment Dynamics University of California, Berkeley
" Do not let any calamity-howling executive with an income of $1,000 a day, ...tell you... that a wage of $11 a week is going to have a disastrous effect on all American industry .” ~President Roosevelt The night before signing the 1938 FLSA
$8 $7.25 $7 $6 $5 $4 $3 $2 $1 $0 Allegretto 2015 Source: Fair Labor Standards Act & amendments
$8.00 $7.25 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 Allegretto 2015 Source: Fair Labor Standards Act & amendments
$8.00 $7.25 $7.00 $6.00 $5.00 $4.00 $3.00 $2.13 $2.00 $1.00 $0.00 Allegretto 2015 Source: Fair Labor Standards Act & amendments
$8.00 $7.25 $7.00 $6.00 $5.00 $4.00 $3.00 $2.13 $2.00 TC = 50% $1.00 TW= 50% $0.00 Allegretto 2015 Source: Fair Labor Standards Act & amendments
$8.00 $7.25 $7.00 $6.00 $5.00 71% $4.00 $3.00 40% $2.13 $2.00 TC = 50% 29% $1.00 TW= 50% $0.00 Allegretto 2014
$10.00 $8.00 $7.25 $6.00 $4.00 $2.00 $2.13 $0.00 Allegretto 2015 Source: Fair Labor Standards Act & amendments. Real value of the minimum & subminimum wages 2014$.
35% 31.2% 30% 25% 18.5% 20% 15% 10.6% 10% 8.1% 6.0% 5% 1.9% 0.9% 0% -0.9% -5% -5.4% -10% 10th 20th 30th 40th 50th 60th 70th 80th 90th (Median) Source: BLS Current Population Survey data Allegretto 2015
80% Male 70% Female 60% 50% 40% 30% 20% 10% 0% All workers Tipped workers Minimum wage workers Source: BLS CPS data. Allegretto & Cooper, EPI 2014 brief http://www.irle.berkeley.edu/cwed/briefs/EPI-CWED-BP379-1.pdf
80% Share of WF 70% Within group MW share Share of all MW workers 60% 50% 40% 30% 20% 10% 0% 16-19 20-24 25-29 30+ Source: BLS CPS data Allegretto 2015
Teens Age 55+ 12.5% 13.7% Age 40 to 49 20.8% Age 20 to 29 36.5% Age 30 to 39 16.6% Source: The Economic Policy Institute, Briefing Paper #371. http://www.epi.org/publication/safety-net-savings-from-raising- minimum-wage/ by David Cooper.
60% 53% 50% 40% 35.2% 30% 20% 10% 0% Source: Economic Policy Institute Allegretto 2015
300% 250% 200% 150% Productivity 100% 50% Worker Compensation 0% Source: Economic Policy Institute Allegretto 2015
20 10 25 30 15 35 0 5 1984 1985 1986 1987 MW 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Allegretto 2015 2013 2014 30 2015 $2 $3 $4 $5 $6 $7 $8 $9 $10
20 40 10 25 30 15 35 0 5 12 1984 1985 TW 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Allegretto 2015 2012 2013 2014 34 2015 $0 $1 $2 $3 $4 $5 $6 $7 $8
Allegretto 2015
Tip Credit $10 $9.47 Tipped Wage $9.15 $9 $8.50 $8.00 $7.50 $8 $7.25 $3.36 $7 $4.25 $6 $5.87 $4.87 $5 $9.47 $5.12 $4 $3 $5.79 $4.25 $2 $2.63 $1 $2.13 $2.13 $0 Federal Nebraska Arkansas South Dakota Connecticut Washington situation State Allegretto 2015
25% Full TC ($2.13 TW) Partial TC ($2.13<TW<MW) 19.4% 20% No TC (No TW!) 16.2% 16.1% 14.6% 15% 13.5% 12.1% 10% 6.7% 6.7% 6.0% 5% 0% All workers Tipped workers Waiters Source: BLS March CPS data. Allegretto & Cooper 2014. Allegretto 2015
30% 53% 52% 25% 51% Middle class share of total income 50% 20% 49% Union membership 48% 15% 47% 46% 10% 45% 5% 44% 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 Source: Madland & Bunker CAP. Hirsch and Macpherson, unionstats.com; U.S. Census, Current Population Reports.
35% 30% 25% 20% 15% 10% 5% 2.3% 1.2% 0% 0.0% -1.6% -1.9% -2.3% -5% -3.5% -4.2% -5.7% -10% 10th 20th 30th 40th 50th 60th 70th 80th 90th (Median) Source: BLS Current Population Survey. Allegretto 2015
More important as few workers have unions/bargaining power Four decades of declining wages Recent stagnating family incomes Significant increases in student loans Workers falling further behind amidst growing inequality
Yes, both the MW and the TW Natural experiment and credible academic studies Polls report 75% want $12.50 MW 53% of Republicans agree 71% support elimination of tipped wage Workers, activists & unions push forward FFF $15 and right to collectively bargain Restaurant Opportunities Centers Unions support higher MWs OUR Walmart
Sylvia A. Allegretto, PhD allegretto@berkeley.edu www.irle.berkeley.edu/cwed/allegretto.html 510 643-7080
• CWED http://www.irle.berkeley.edu/cwed/allegretto.html • IRLE: www.irle.berkeley.edu/research/minimumwage • The Economic Policy Institute: www.epi.org • NELP: www.nelp.org • DOL FLSA: www.dol.gov/dol/aboutdol/history/flsa1938.htm
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