Why US Workers are Far Better Off Than Four Years Ago

by Dean Baker

 September 6, 2024
Facebook

TwitterRedditEmail

Detroit Industry Murals (detail), Detroit Institute of the Arts. Photo: Jeffrey St. Clair.

This is not a tough one. First and foremost, workers are better off today because they overwhelmingly have jobs if they want them. They also are getting higher pay, even after adjusting for inflation. And they tell us they are much more satisfied at their jobs.

When President Biden took office, the unemployment rate was 6.4 percent. It is currently 4.3 percent. For most of his presidency the unemployment rate has been below 4.0 percent, a stretch of low unemployment not seen in more than half a century.

The story looks even better if we look at the percentage of people who have jobs, since many people are not counted as being unemployed if they don’t even look for work because of a weak labor market.

In January of 2021, the share of people in their prime working years (ages 25 to 54) who had jobs was 76.4 percent. In the most recent data, it stood at 80.9 percent, 4.6 percentage points higher.

This is not just an issue of millions more people being able to get jobs. When the labor market is as strong as it has been, workers can have their choice of jobs. They can leave jobs where the pay is low, the workplace is unsafe, or the boss is a jerk.

Workers switched jobs in record numbers in the years 2021-2023. Tens of millions of people quit their jobs and moved on to better ones. One result was that workers reported the highest rate of job satisfaction on record. This is a big deal, since most workers spend a large share of their waking hours on the job.

The tight labor market also gave workers the power to resist employers’ demands that they return to the office when the worst of the pandemic was over. As a result, the number of people who report being able to work from home has increased by 19 million from the pre-pandemic level.

This shift has been largely ignored by the media, but these workers are saving hundreds of hours a year in commuting time and saving thousands on transportation and other commuting-related expenses. It’s true that the option to work from home is mostly available to higher paid workers, but 19 million people is nearly one-eighth of the workforce, not some tiny elite.

If working from home was a benefit that mostly went to higher paid workers, the pay increases disproportionately went to those at the bottom, reversing the pattern that had been in place for more than four decades. An analysis from the Economic Policy Institute found that wages for workers in the bottom ten percent of the wage distribution increased by 13.4 percent from before the pandemic, after adjusting for inflation.

Wages for workers in the middle increased by 3.0 percent over this period, also after adjusting for inflation. This is not great, but it is better than what we saw over most of the prior four decades, when wages were often stagnant or falling.

And this wage growth occurred in spite of a worldwide pandemic that whacked growth and caused inflation everywhere. The United States is the only wealthy country where workers have seen substantial wage growth since the pandemic. In most countries wages have fallen behind inflation.

It is also important to realize the world-leading recovery was not something that just happened. It was not inevitable that the economy would bounce back quickly from the pandemic shutdowns. There was very rapid job growth in the summer of 2020, as most of the shutdowns ended. But job growth slowed considerably in the fall. In the last three months of the Trump administration, we were creating jobs at the rate of just 140,000 a month. At that pace it would have taken us more than five and a half years to get back the jobs lost in the recession.

The Biden administration’s recovery package got back these jobs in less than a year and a half. The rapid job growth has continued so that we now have 6.4 million more jobs than we did before the pandemic. With the economy still growing at a good clip and inflation back to its pre-pandemic pace, for workers the future is bright.

This first appeared on CEPR.

Dean Baker is the senior economist at the Center for Economic and Policy Research in Washington, DC. 

Low Wage Work Isn’t Just Bad for Employees — It Hurts Customers, Too 

by Emily Guerra

 September 6, 2024
Facebook

TwitterRedditEmail

Photograph Source: ricky shore – CC BY 2.0

I’ve always felt that working in customer-facing jobs is my calling. I’m passionate about making people feel comfortable when they enter a business, be it a retail store or a restaurant.

But it was hard to keep that passion when I worked at Dollar General. Like workers at many other big retailers, we were so short-staffed and poorly trained that it was next to impossible to give good customer service.

My interview and first day on the job went well. Managers, co-workers, and customers all seemed pretty happy. The second day was a complete 180. All of a sudden I was thrown into my duties with zero training. They even scheduled me to close out the store that day without instructions.

Quickly I had shifts where I was the only worker for hours at a time, dealing with long lines of impatient customers, tons of merchandise to stock, and frustrated vendors subject to long wait times.

I frequently had to get overstock items from unstable top shelves and constantly worried I’d fall. The back door also wouldn’t close correctly — and even though I brought it up to management several times, it remained an easy way for anyone to sneak in.

I didn’t know it then, but Dollar General has repeatedly faced huge penalties for workplace safety violations.

Once I was called out to help with a truck delivery of refrigerated and frozen products. I went to grab a tote bag full and had to do a triple take because it was full of black mold. Another afternoon, I picked up a bag of potting soil to stock and realized it was covered with dead insects, which got all over the floor and other products.

When I had problems like these with merchandise, I was expected to contact the warehouse myself. But that was hard to do, given how understaffed we were.

Dollar General isn’t the only tough place for retail employees. At many big stores, workers are short-handed and face difficult working conditions — even when their companies are highly profitable.

Where is all the money going? Well, I can tell you not much went to me.

I made $14.75 an hour for part-time hours, even though I often wound up working full-time. After the first few weeks, my schedule became so unpredictable that I sometimes worked only a few hours a week. Eventually it just wasn’t worth all the hard work and stress, so I quit.

By contrast, Dollar General CEO Todd Vasos made nearly $10 million last year — 521 times as much as a typical worker at his company, the Institute for Policy Studies reported recently.

Dollar General has also been taking profits that could go towards worker pay or fixing up their stores and spending it instead on stock buybacks. That’s when a company repurchases its own shares to inflate the value of its stock and make CEOs even richer. Between 2019 and 2023, the company spent $9 billion on this financial scam.

I also learned from the Institute’s report that 88 percent of Dollar General workers who are eligible to participate in the company 401(k) plan don’t have one dime in their accounts. Low-wage workers like me just don’t earn enough to be able to save for our retirement.

I saw up close how a business that’s focused on exploiting employees to make those at the top even richer isn’t just bad for workers like me, but for customers as well. And anyone who’s worked for one of these low-wage companies can tell you Dollar General is hardly unique.

If we want a strong economy, we need to do more to make sure all workers can make a decent living and feel safe and respected in their workplace.

Emily Guerra is a former Dollar General employee from Canton, Oklahoma.

Workers Need Protection From Record-Breaking Heat

by Farrah Hassen

 September 6, 2024
Facebook

TwitterRedditEmail

Image by JSB.

This summer is on track to being the hottest on record, with 2024 very likely to be the hottest year.

Fueled by global warming, extreme heat is the leading weather-related cause of death in the United States. It claims the lives of around 2,000 workers and injures another 170,000 in heat stress-related incidents each year, according to Public Citizen.

Workers whose jobs expose them to dangerous heat — like farm, construction, maintenance, delivery, and warehouse workers — are the most vulnerable. Underlying inequities further compound the risks for lower-income workers and workers of color.

In August, as temperatures in Baltimore approached 100 degrees, heat tragically killed 36-year-old Ronald Silver II, a city sanitation worker. “He was found lying on the hood of a car and asking for water,” reported The Guardian. In other instances,airport workers have passed out and suffered from other symptoms of heat exhaustion while on the job.

These deaths and illnesses could have been prevented if long overdue, proper workplace heat protection standards had been in place.

Some life-saving relief may be on the horizon, however. On July 2, the Biden administration announced a new proposed rule that would establish the country’s first federal heat safety standard. It would help protect around 36 million workers — both indoor and outdoor — from heat-related deaths and injuries.

If finalized, the new Occupational Safety and Health Administration (OSHA) regulations would require employers to provide drinking water and rest breaks when the combined temperature and relative humidity hit 80 degrees.

Employers would also be required to develop a heat injury and illness prevention plan, provide training, and immediately assist a worker who is experiencing a heat emergency. Additional protections would be triggered once the heat index reaches 90 degrees, including a minimum 15-minute paid rest break every two hours.

In the absence of a nationwide standard, only five states have implemented their own regulations to protect workers from heat: California, Washington, Oregon, Colorado, and Minnesota. The types of industries covered vary for each state, as do the workplace settings (indoor and/or outdoor) and the temperature levels that trigger safety requirements.

Some localities have taken matters into their own hands. The city of Phoenix, which endured 31 consecutive days of temperatures over 110 degrees last summer, passed an ordinance in March that requires city contractors and subcontractors to provide access to shade, rest, water, and air conditioning for their outside workers, including construction and airport workers.

In stark contrast, several states cruelly continue to prevent localities from implementing the most basic protections.

Texas Governor Greg Abbott signed a bill last year that rescinded mandatory rest and water breaks for construction workers. And at the urging of powerful business interests and their lobbyists, this year Florida Governor Ron DeSantis signed a measure that bans localities from passing heat protections like water breaks and shade for outdoor workers. At least two farmworkers in Florida died last year from heat exposure.

A federal heat safety standard would help counter these unconscionable attacks on workers and save lives. But it could take years to finalize. In addition to election year uncertainties, final approval will likely face challenges from big business and lobbying groups, particularly from the agricultural and construction sectors.

Until then, state governments should act urgently and adopt their own worker protections. Congress can also direct OSHA to issue an interim heat safety standard until a final heat standard is issued.

The summers won’t be getting any cooler. And workers’ lives hang in the balance.

Farrah Hassen, J.D., is a writer, policy analyst, and adjunct professor in the Department of Political Science at Cal Poly Pomona.