76 Years Ago: Fairy Tales of the Economic Family, Recovering From Munich, a Letter From an Arab Communist 76 Years Ago: Fairy Tales of the Economic Family, Recovering From Munich, a Letter From an Arab Communist
Snippets from The Nation of October 29, 1938.
Oct 27, 2014 / Back Issues / Back Issues and Richard Kreitner
How a Divided Senate Could Threaten Social Security How a Divided Senate Could Threaten Social Security
The prospect of a “grand bargain” could rear its ugly head if the 2014 midterms empower Maine’s Angus King.
Oct 27, 2014 / Blog / John Nichols
A Real Sharing Economy A Real Sharing Economy
One of the overlooked problems driving our country’s jobs crisis isn’t unemployment—it’s just not having enough work. The shadow figure that lurks behind the unemployment rate is underemployment: people who want—and need—full-time work but are only able to find part-time hours, or who have gotten “discouraged” from job-seeking. Including those people, the broad measure of underemployment hovers around 12 percent. These days, people struggle full-time to juggle multiple part-time jobs, even as they suffer from the loss of healthcare and other social protections. They are overworked and underemployed. But it’s not that the underemployed simply want to work more; they also want to earn more. One way to square the lack of work with the need for income is work-sharing, which allows companies to distribute hours so that people work less, while ensuring that there’s still enough work to go around to prevent layoffs. For example, as explained in a new study by the National Employment Law Project, if a factory wants to cut its workforce by the equivalent of five employees, “Under work-sharing, the employer could instead reduce the hours of 25 employees by 20 percent, and those workers would receive a pro-rated [unemployment insurance] payment for their one day per week of unemployment, while maintaining any existing health and retirement benefits.” Cutting back hours typically harms workers, but what makes work-share less painful is that the government subsidizes the balance. About half of the fifty states have implemented some form of work-sharing, but now state lawmakers are approaching a year-end federal deadline to apply for funds. A bill to renew the legislation, the Layoff Prevention Act, is pending. Please support our journalism. Get a digital subscription for just $9.50! The central premise of work-sharing is that the state has a responsibility to support the restructuring of labor to protect workers. This is not a new idea: work-sharing is more widespread in European countries, particularly Belgium, Germany and Italy—and California introduced a statewide work-sharing program in the late 1970s. In the wake of the Great Recession, Washington passed legislation allowing states to use federally approved work-share programs to cope with epidemic levels of long-term joblessness. Politicians try to spin the economic crisis by talking about the need for “shared sacrifice”—code for coddling big business at the expense of workers. Now that Washington is offering a small way to redistribute workers’ time without sacrificing all their income, states have a chance to really put their money where their mouth is. Read Next: Peter Van Buren on the new minimum-wage economy
Oct 22, 2014 / Editorial / Michelle Chen
Work-Sharing: A Socialist Alternative to Layoffs? Work-Sharing: A Socialist Alternative to Layoffs?
Both unemployment and underemployment could be alleviated through a little-known federal subsidy program.
Oct 20, 2014 / Blog / Michelle Chen
One Thing Hillary Clinton Understands About Politics in 2014 One Thing Hillary Clinton Understands About Politics in 2014
Hillary Clinton may not be a populist, but she is a savvy politician.
Oct 17, 2014 / Blog / John Nichols
Minimum Wage Debate Could Doom Scott Walker Minimum Wage Debate Could Doom Scott Walker
John Nichols appeared on All In with Chris Hayes Wednesday night to talk about how the minimum wage debate in Wisconsin could doom Scott Walker’s re-election campaign and tank his ...
Oct 16, 2014 / Nation in the News / John Nichols and Edward Hart
When the Workday Never Really Ends When the Workday Never Really Ends
Flexible scheduling is creating an on-call nightmare for working people.
Oct 15, 2014 / Blog / Michelle Chen
Scott Walker Thinks $7.25 Is a Living Wage—He’s Wrong Scott Walker Thinks $7.25 Is a Living Wage—He’s Wrong
Wisconsin's governor refuses to act on behalf of low-wage workers.
Oct 14, 2014 / Blog / John Nichols
The Score: Does the Minimum Wage Kill Jobs? The Score: Does the Minimum Wage Kill Jobs?
Throw a rock into the punditsphere and you’ll hit someone arguing that minimum-wage increases kill jobs. We shouldn’t boost the wage, these people argue, because companies will hire fewer of the lowest-paid workers—the very workers who are supposed to be helped. Meanwhile, social movements like Fight for 15 demand a higher minimum wage in order to raise the living standards of these workers. To a degree, the relationship between the minimum wage and employment is still debated among economists. When thirty-eight of them were polled last year, they were split as to whether a $9 hourly wage would cost jobs, with about a quarter unable to say one way or another. The debate pits the Congressional Budget Office, which found that a $10.10 wage would reduce employment by 0.3 percent, against economists like David Cooper, who found that a higher minimum wage would support the creation of 85,000 new jobs. So which is it: Does raising the minimum wage boost living standards for workers, or does it kill jobs for those who need them most? Taking stock of all the conflicting research on the topic suggests the former: employment is unlikely to suffer from a higher wage. In 2009, Hristos Doucouliagos and T.D. Stanley published a paper that reviewed sixty-four studies and found that when the studies’ findings were averaged out, the impact of raising the minimum wage on employment was close to zero. Also, the most statistically precise studies were the likeliest to find no impact. Increasing the wage by 10 percent could reduce employment by a mere 0.1 percent. Critics suggest that employers of low-income workers will replace them with machines if their labor becomes more costly. But in the real world, businesses are run by human beings who make a range of choices. Bosses often respond to higher labor costs not by cutting workers, but by requiring workers to be more efficient. They may reduce bonuses for higher-paid employees. They could pass the cost on to customers through higher prices, although a review of academic papers found that a 10 percent wage increase raised prices by no more than 0.4 percent. Most important, employers are likely to find that a higher wage reduces costly job turnover among trained workers. Higher wages also put more money into workers’ pockets—to the tune of some $30 billion—which would then be spent at these businesses. Real-world evidence is reassuring. In 2010, three economists looked at 1,381 counties over sixteen years, finding that minimum-wage hikes had no effect on employment. Other economists looked at every state-level minimum-wage increase over twenty-five years at times when unemployment was already high and found no evidence of an effect on job creation. Yet another group looked at the effect of state-level increases on teenagers—canaries in the coal mine of low-skilled employment—and found zero impact on their jobs. Even this year, the thirteen states that raised their minimum wages on January 1 have experienced higher employment growth than those that didn’t. Washington, the state that has boasted the highest minimum wage for fifteen years, had a job-growth rate 0.3 percentage points above the national rate. It’s impossible to draw a clear line of causation from a higher minimum wage to job growth, but the hikes clearly did not torpedo local economies. Across the board, there’s little reason to think that a higher wage would decimate job growth and good reason to think it could give the economy—and workers—a boost. Bryce Covert Myth: The minimum wage is a living wage. Reality: One full-time minimum-wage job used to be able to keep a family of three above the poverty line. Now it can’t keep a single parent above the poverty line. Myth: Mostly teenagers in short-term jobs make the minimum wage. Reality: Nearly 90 percent of the workers who would be affected by a minimum-wage hike are older than 20, and 28 percent of them are parents. Myth: Minimum-wage jobs like fast food are just entry points to better-paid careers. Reality: In the minimum-wage fast-food industry, there are far fewer managerial positions to move into than in other industries, and few franchise ownership opportunities. half-full: Ten states have passed minimum-wage increases this year, five above $10 an hour. half-empty: Congressional Republicans have blocked a federal minimum-wage increase three times over the past three years despite supporting one under President George W. Bush.
Oct 8, 2014 / Editorial / Mike Konczal and Bryce Covert
‘Welfare-to-Work’ Has Failed, So New York City Is Trying Something New ‘Welfare-to-Work’ Has Failed, So New York City Is Trying Something New
Human Resources Administration announces changes to a system long critiqued by advocates.
Oct 8, 2014 / Blog / Michelle Chen