Low-wage Work

Gregory Acs and Pamela Loprest of the Urban Institute have a new paper describing the demand side of the labor market where college degrees aren't required. Prior research has focused on noncollege workers themselves, some notable Inclusion products excepted. The paper transcends the DC debate over the low wage market, where one side says "it's all about skills and education" while the other says "it's all about job standards and full employment." And it addresses the taboo subject of racial and gender discrimination in labor markets.

Its findings include:

• Jobs that require experience, specific skill training, and basic reading and writing skills pay substantially better. "Soft" skills are also important factors in hiring.

• Large firms, higher-wage paying industries, and companies in rural areas are more likely to report having trouble finding workers.
• Most jobs offer unpaid leave, but about half offer paid leave.
• Unionized firms and sectors that are targeted by employment service providers tend to pay better.
• About 70 percent of jobs offer a chance of promotion, and 64 percent of workers reportedly receive a raise after 6 months on the job.
• Minority and female workers are paid less than their white, male counterparts.
• Empolyers show a willingness to hire former welfare recipients, but not ex-offenders.

A fascinating article by Steven Greenhouse on the case made by Ed Ott, chief of the NYC Central Labor Council, to do more for nonunionized workers:

Ed Ott, the executive director of the New York City Central Labor Council, an umbrella group for the city’s labor unions, has an unexpected and unnerving warning for New York’s more than one million union members.

He warns that their wages and living standards will be threatened unless the city’s unions do far more to lift the incomes and living standards of the city’s nonunion working poor, including restaurant workers, supermarket cashiers and taxi drivers.

“Going forward, if we don’t raise the standards for the lowest-paid workers in the city, and there are literally hundreds of thousands of them, our own levels that we achieved — of wages, pensions and time off — they’re not sustainable,” said Mr. Ott, whose group is a federation of 400 union locals. “For a working class that is going to be making minimum wage or slightly above, what’s going to happen is that as taxpayers, that will create a social base for an attack on our own standards.”

....

Mr. Ott is glad that many union members — for instance, construction workers, telephone workers and teachers — have achieved middle-class status. But he voiced frustration that many unions showed little concern about lifting the status of low-wage nonunion workers. He made his remarks at a time when the number of nonunion workers has soared in traditionally union-dominated industries like construction and hotels.

Mr. Ott sees two working classes in New York: a unionized one that is doing well and a nonunion one that is struggling to get by.

“You see a working class on the subway at 6:30 in the morning and you see them at 8:30 at night heading home,” he said. “They work in the back of restaurants, they clean buildings nonunion, they’re child care workers, they’re in retail. Frankly, I marvel that these guys can find a way to live in this city. They work very hard. Most of these workers who work outside a union setting, they work more than one job or they work one job many hours.”

Mr. Ott said the union movement needed to work closely with less-well-off groups of workers — taxi drivers, domestic workers, restaurant workers, even freelance writers and computer workers — to help raise their living standards, not just for moral reasons but also for their own self-interest. “Every time you go to the bargaining table now, there’s downward pressure,” he said. “Even in the public sector, it’s ‘Any improvements you want, you have to pay for with concessions.’ That’s downward pressure, too.”

....

In a new report released this week, The Mobility Agenda finds that the U.S. economy, workplace, workforce, and labor market have changed radically in the last 50 years, yet public and private policies have not kept up with these changes.

In recent years, policymakers have begun considering new options for allowing workers to meet the often-conflicting demands of work and other life obligations. These proposals include a variety of options for time off from work—both paid and unpaid—and more flexibility in the workplace through initiatives like paid family and medical leave, paid sick days, and scheduling predictability.

In Work-Life Policies for the Twenty-First Century Economy, the authors review the evidence regarding work-life conflicts, the economic case for policy initiatives, and effectiveness of the policy options.

“Currently, no federal or state laws exist to guarantee that employers offer paid sick days,” says Margy Waller, Executive Director of The Mobility Agenda and a co-author of this report. “Yet, providing more flexibility in the workplace not only helps employees, but also can yield important benefits for employers.”

The Mobility Agenda is a think tank in Washington, DC that seeks to stimulate and shape a dialogue to build public support for strengthening the labor market, benefiting our economy, workers, and communities.

“No single policy will meet all needs, which is why we recommend a menu of policy solutions to address changes in workforce, living arrangements, and society,” explains Waller. The authors, Heather Boushey, Layla Moughari, Sarah Sattelmeyer, and Margy Waller present a clear explanation of the policy options and make specific recommendations for decision-makers.
______________________________________________________________________________
For more information, including the full report and abstract, please see: our web site.

A fantastic new paper from CEPR's John Schmitt on how unions boost the wages of low wage-workers:

Economic data have long demonstrated a substantial wage premium for unionized workers --on the order of 10 to 20 percent-- relative to non-union workers with similar characteristics. This paper uses a straightforward extension of standard statistical techniques to estimate the impact of unionization separately for workers at different wage levels, from the lowest to the highest paid workers.

Using national data for 2003 through 2007, we estimate that unionization raises the wages of the typical low-wage worker (one in the 10th percentile) by 20.6 percent, compared to 13.7 percent for the typical worker (one in the 50th percentile), and 6.1 percent for the typical high-wage worker (one in the 90th percentile). The traditional statistical approach applied to the same data produces an estimate of the average union wage premium of 11.9 percent, which is substantially lower than the union effect on low-wage workers (20.6 percent) and somewhat below the effect for the median- wage worker (13.7 percent).

Also worth noting, the report includes state-by-state data on union wage premium.

Just in time for the North Carolina primary, a nice op-ed in the News and Observer (NC) by CEPR's Dean Baker and John Quinterno of the North Carolina Justice Center. One of the things I like is how it makes low-wage work part of a larger story about the economy:

....

Regardless of whether the nation technically is in a recession, working families most definitely are. Since the 2001 recession, North Carolina has lost, on balance, more than 200,000 manufacturing jobs, a traditional source of living-wage employment for individuals without post-secondary degrees.

This has occurred alongside rapid growth in the low-wage labor market. Less than one out of every four jobs in North Carolina pays more than $17 an hour and offers both employer-provided health and retirement benefits, according to an analysis by the Center for Economic and Policy Research.

The loss of good jobs means that many workers in North Carolina are paid too little to make ends meet. A recent study by the Center for Economic and Policy Research and the N.C. Budget & Tax Center found that 24 percent of North Carolinians in working families earned too little to afford the market prices of a bundle of basic goods and services. Although public programs designed to help workers in low-paid jobs, such as subsidized child-care, helped close the gap for about one-sixth of the people in this group, most low-wage workers still came up short.

Our next president will have to address both the immediate problems stemming from the recession and the longer-term problems associated with the loss of good jobs. Ideally, the policies that combat the recession in the short term could also help counteract the larger problem of low-wage work.

....

... I've still got the same shot at getting hired for a low-wage job as a black man with the same credentials but no criminal record, as Devah Pager and colleagues find in this working paper:

Sending trained testers with equivalent resumes to apply for entry-level jobs revealed a strong racial preference among employers in New York City. We find evidence that employers are twice as likely to prefer white applicants to equally qualified blacks. These results are robust to a variety of tester and experimental effects. The testers' field notes suggested that employers did not obviously view black job applicants as less skilled, as other researchers have found. Instead, employers tended to rule out black applicants by holding them to a higher standard than their white counterparts. Employers were also more likely to steer black workers into lower jobs, and out of jobs involving customer service.

....

The magnitude of the penalty of blackness is underscored in its comparison with the penalty of a criminal record. A black applicant with a clean record fares no better that a white applicant recently released from prison. These results are consistent with Pager's (2003) results from Milwaukee, though the inference is stronger here where whites with criminal records applied for the same jobs as blacks with clean records. A criminal record is indeed a significant barrier to employment; but the stigma of race poses a barrier equally as large. The findings of discrimination presented here are particularly striking in light of the fact that the testers in this study in many ways represented a best-case scenario for low-wage job seekers. The testers were college educated young men with effective styles of self-presentation. Though posing as high school graduates with more limited skills, these young men stood well above the typical applicant for these low wage jobs. The effects of race among individuals with fewer hard and soft skill advantages may well be larger than what we estimate here.

MDRC has a new report out on the Work Advancement and Support Center (WASC) demonstration. The demonstration, housed mostly in One-Stop Career Centers and operating in four cities:

... is designed to provide intensive career coaching to low-wage workers so that they can navigate successfully the often complicated interaction between advancement and work supports, ensuring all along that each step they take will increase their total income and improve the circumstances of their employment. Sites in the demonstration are building integrated teams of workforce and welfare agency professionals who are charged with offering intensive career and advancement coaching for low-wage workers, increasing the access to and take-up of financial work supports, and building new linkages with employers in order to develop and deliver career advancement services — and work supports — directly at the work site.

WASC is still in the early implementation stage, so MDRC can't say yet whether it's increasing overall income, earnings and advancement. My guess is that it will end up having some positive effect on income, mostly by getting low-wage workers enrolled in work support programs that they're eligible for but don't know about. But I also think WASC will have a tougher time producing significant earnings or advancement gains as these findings from the report suggest:

Career coaches report that customers are taking up work supports and taking advantage of advancement opportunities, but customers' short-term advancement options are often limited. Career coaches in the Dayton and San Diego learning sites report that customers are often pleasantly surprised to discover the range of work supports available, particularly health care coverage and tax credits. Importantly, instances of customers using work supports to substitute for advancement have been rare, and coaches explain that customers approach advancement decisions with a pragmatic openness toward steps that might help them, but also with a sense of realism about opportunity constraints. Many customers are working in situations where there are few if any opportunities to advance. To move up, many customers must first complete education or training, which is a longer-term process.

Coaches’ time for intensive career planning is limited. Coaches have by and large enthusiastically embraced the goals of the demonstration — and they have made substantial progress in breaking out of old institutional roles and serving their customers in new ways — but in general they have not engaged customers as intensively as expected, nor have they engaged their full caseloads. The reasons are similar to those for the inconsistent use of the calculator, including staff turnover, vacancies that have not been filled, the need to spend more time than expected on recruitment, and administrative duties.

The folks at Good Jobs First have put out a fascinating new report on Wal-Mart's strategy of challenging assessments of its property tax liability:

....

"Wal-Mart, a company with $350 billion in annual revenues and $11 billion in profits, drains vitally needed funds from communities by regularly challenging the valuation put on its properties by public officials," said Philip Mattera, research director of Good Jobs First and principal author of the report. "When the company succeeds in one of these challenges, it diminishes the funds available to pay for education, police and fire protection, and other essential services provided by local governments."

Based on a large national sample of Wal-Mart stores and a review of all of its distribution centers open as of the beginning of 2005, Good Jobs First concludes that Wal-Mart has filed assessment challenges at more than one-third of its facilities around the country. At many facilities there have been appeals in multiple years. Overall, Good Jobs First estimates that the company has filed more than 2,100 property tax challenges nationwide.

"Wal-Mart's frequent poor-mouthing of its properties makes the company appear hypocritical," noted Good Jobs First executive director Greg LeRoy. "When it meets opposition to a new store, the company claims it will bring economic benefits to the community, which would normally be reflected in higher property values," LeRoy said. "Yet, in these assessment appeals the company routinely argues that the value of its properties has declined. Unwittingly, Wal-Mart appears to be confirming the argument often raised by neighborhood groups that the construction of one of the company's giant stores will reduce property values."

"These systematic property tax challenges are part of a larger pattern of state and local tax avoidance by Wal-Mart," Mattera stated. "They are consistent with the company's reported use of a real estate investment trust gimmick to dodge income taxes in many states. And they are consistent with the widespread property tax abatements, income tax credits and sales tax diversions that make up a large part of the more than $1.2 billion in economic development subsidies that Good Jobs First has documented in previous research on Wal-Mart," Mattera added. Good Jobs First's findings on development subsidies can be found at www.walmartsubsidywatch.org.

It occurs to me that we don't see as many muckraking reports like this coming from progressive orgs as we should. At least here inside the beltway, there's an argument to be made that progressive think tanks and advocacy orgs don't spend enough time and energy challenging unwise spending that subsidizes large corporations and the rich. The big battles against such spending tend to be defensive, and often are waged in response to conservative proposals to expand them (like estate tax repeal); less common are proactive attacks on long-standing subsidies. Conservatives seem to spend more time going after long-standing subsidies of the kind they don't like (albeit with mixed success as the Social Security battle demonstrates).

Some will argue that this is because conservatives only want to cut and never want to spend, in part because they favor the market over government, but this isn't really the case. As Dean Baker has shown, conservatives like government just as much as liberals. What makes them different is that they see government as a tool for helping the rich get richer, and the big get bigger.

If you are in the DC area, please join us tonight – Wednesday October 10 – for a free screening of a new documentary.

The Mobility Agenda is collaborating with documentary filmmakers and an intermediary, Active Voice, to promote the new film about low-wage work: Made in LA.

Active Voice brings filmmakers, policy advocates, and researchers together on issues of mutual interest. Recently, Inclusion’s Mobility Agenda team hosted a roundtable discussion about the film with Active Voice, just as the documentary began its festival circuit with a showing in DC at the SILVERDOCS festival.

We’re excited about this film for two reasons:

First, Made in L.A. is a story about the low-wage labor market and the critical importance of organizing the workplace to create a space for worker voices, and providing intermediary support and resources (like worker centers and unions) that can improve low-wage job conditions. It also provides a teaching moment for shoppers - if the price is a "steal", someone else probably already "paid" for it in low wages.

Second, at Inclusion and The Mobility Agenda, we are committed to using new media approaches for sharing ideas about issues of economic security and mobility, and successful strategies for system change. We are really impressed with the Active Voice leadership and their approach using documentary film to advance public understanding and policy change. While the film presents the particular experience of immigrant workers in LA, this documentary provides information about the low-wage labor market that is relevant across sectors.

Here is a description from the filmmakers:

MADE IN LA follows the remarkable journey of three Latina immigrants working LA’s garment factories and their struggles for self-empowerment as they wage a three-year battle to bring a major clothing retailer to the negotiating table. In an intimate vérité style, MADE IN LA offers a rare and poignant glimpse into this “other” America, where immigrants in many industries toil long hours for sub-minimum wages, fighting for an opportunity in a new country.

While I'm on the subject of GAO, they released a new report today on one of the primary problems with our unemployment insurance system, the inadequate coverage it provides workers in low-wage occupations.

As the chart above shows, the basic story is that low-wage workers are less like to receive UI when they're unemployed than higher-wage workers.

And it's not because they have less time on the job. There's another chart in the report showing that the disparity remains when controlling for job tenure.

Or at least he likes our new report enough to mention it in his Labor Day blog on Huffington Post:

.... Unions have done more to help working people experience economic success than any other program.

This week, a new report by the Center for Economic and Policy Research and Inclusion showed that workers in the lowest-paying jobs make about 16 percent more when they are members of a union, and they are 25 percent more likely to have health insurance or a pension plan.

Now, more than ever, as new technologies and new ways of thinking about efficiency have reduced workers to a line item on a balance sheet, unions are not only relevant—we are indispensable.

As the economic landscape has shifted, the labor movement has needed to adapt to these new realities. I am proud to report that the 1.9 million workers united in SEIU stand at the forefront of the evolving labor movement. In recent years we have pioneered new models of organizing, like uniting workers in nontraditional employment situations. Since 1999, 400,000 home care workers have changed state laws throughout the country to give them the freedom to unite in a union.

We have established new relationships with employers who are willing to reward work, while continuing to hold accountable those who are not. We are acting on new ways to secure health care and retirement security that reflect rather than deny the new economic reality.

The bottom line is this: the American economy is not a zero-sum game. There is no good moral or economic reason why all workers cannot or should not share in the success and prosperity they helped create. We need to restore the promise of the American Dream. And that means choosing what kind of country we want to be.

The press release for a new report from CEPR and Inclusion on how unionization increases the upward mobility of workers in low-wage jobs:

Washington, DC: Unionization substantially raises wages and benefits even in typically low-wage occupations, according to "Unions and Upward Mobility for Low- Wage Workers ", a report released today by the Center for Economic and Policy Research and Inclusion.

The report, which analyzed 15 of the lowest-paying occupations in the United States, found that unionized workers earned about 16 percent more than their non-union counterparts. Unionized workers in these same industries were also about 25 percentage points more likely to have health insurance or a pension plan.

For workers in these low-wage industries, unionization raised their wages, on average, about $1.75 per hour. In financial terms, the union effect on employer-provided health insurance and pensions was even larger.

"Our findings contradict the widespread belief that low-wage jobs are incapable of providing decent pay and benefits," said John Schmitt, a Senior Economist at the CEPR and one of the study's authors. "When workers have a voice at work, they can dramatically increase their wages and benefits, even in what are traditionally badly paying jobs."

The 15 low-wage occupations together employ just over 15 percent of all US workers and include cafeteria workers, child-care workers, cooks, housekeeping cleaners, home-care aides, janitors, ground maintenance workers, nurses aides and home-health aides, teachers assistants, and security guards.

"Given the prevalence of low-wage jobs without benefits in our labor market, and the likelihood that these sectors will grow rather than decline, some attention to this strategy of improving the U.S. labor market is critical to strengthening our economy and communities," according to Margy Waller, co-director of Inclusion and a co-author of the report.

The Mobility Agenda is collaborating with documentary filmmakers and an intermediary, Active Voice, to promote a new film about low-wage work: Made in LA.

Active Voice brings filmmakers, policy advocates, and researchers together on issues of mutual interest. Recently, Inclusion’s Mobility Agenda team hosted a roundtable discussion about the film with Active Voice, just as the documentary began its festival circuit with a showing in DC at the SILVERDOCS festival.

On Tuesday September 4th, Made in LA will air nationwide on the PBS documentary series, POV, as a Labor Day special. We’re encouraging others to watch show for two reasons:

First, Made in L.A. is a story about the low-wage labor market and the critical importance of organizing the workplace to create a space for worker voices, and providing intermediary support and resources (like worker centers and unions) that can improve low-wage job conditions. It also provides a teaching moment for shoppers - if the price is a "steal", someone else probably already "paid" for it in low wages.

Second, at Inclusion and The Mobility Agenda, we are committed to using new media approaches for sharing ideas about issues of economic security and mobility, and successful strategies for system change. We are really impressed with the Active Voice leadership and their approach using documentary film to advance public understanding and policy change. While the film presents the particular experience of immigrant workers in LA, this documentary provides information about the low-wage labor market that is relevant across sectors.

Here is a description from the filmmakers:

MADE IN LA follows the remarkable journey of three Latina immigrants working LA’s garment factories and their struggles for self-empowerment as they wage a three-year battle to bring a major clothing retailer to the negotiating table. In an intimate vérité style, MADE IN LA offers a rare and poignant glimpse into this “other” America, where immigrants in many industries toil long hours for sub-minimum wages, fighting for an opportunity in a new country.

A follow-up comment from MDRC to my post about the PASS evaluation has this good news that they are planning to assess job quality:

A note from MDRC's Gayle Hamilton on behalf of the PASS study authors: Shawn makes a good point about assessing job quality. As a matter of fact, a survey of participants in the PASS study is currently being fielded. Among other things, the survey is collecting data on the quality of individuals' jobs, including hourly wage rates, whether the jobs offer health insurance and/or paid sick and vacation days, and whether the jobs are temporary or permanent and have regular or erratic work hours. As a result, longer-term results for PASS will include an assessment of the extent to which the program led to employment in "better" jobs.

MDRC has a new report out on the results of the Post-Assistance Self-Sufficiency Program, a program operating in Riverside, California and evaluted starting in 2002. Previous studies of programs like PASS, which are designed to help parents with low-wage jobs find better jobs after they stop receiving Temporary Assistance income supplements, have found that they have little effect (typically measured over a two-year period). PASS does somewhat better with gains in employment and earnings, although there's still not much evidence that it was successful on the "better jobs" front.

Some 90 percent of lone parents participating in the MDRC evaluation were employed, most full-time at the time the evaluation began. The average wage for these parents was $7.81 an hour. The typical parent in the evaluation is better described as a "low-wage worker" than as a "welfare recipient." Parents in the evaluation worked in more than half of the quarters in the three years before the program started. If I'm reading it right, supplementary data suggests that about half of the parents had worked 12 months or more out of the last three years and 30 percent had worked more than 24 months out of the last three years.

The evaluation randomly assigned parents to a PASS group eligible to receive PASS services or a "control" group that was not. About half the families in the PASS group decided to pursue some type of program service compared to about 8 percent in the control group that received similar services outside of PASS.

The parents in the PASS group who lost their initial jobs were more likely to find a subsequent one than parents who were not assigned to PASS. As a result, parents in the PASS group had somewhat higher earnings over a two year period than parents who did not (about $1800 or 11 percent more). At most, this difference amounted to about $300 in a quarter (in a few quarters the difference wasn't statistically significant).

The evalution also found that PASS had "no statistically significant effect on [parents'] retention or advancement" of the jobs they held when the study began. This means that parents who participated in PASS were no more likely to retain or advance in this job than parents in the control group.

One other striking finding is that PASS's positive effects appear to be limited to Hispanic families:

Among Hispanic sample members (who make up nearly half the sample), PASS increased earnings by more than $3,200 above the control group average; the impact among sample members in other racial/ethnic groups was only $558 and is not statistically significant. Increases were particularly large among Hispanic sample members living within the three CBO service areas. Thus, it is difficult to determine whether the PASS program works better for Hispanics or, alternatively, whether the program works better for Hispanics when it is delivered by CBO providers. Impacts were stronger among those who were recently employed in UI-covered jobs. However, impacts on employment and earnings did not differ for subgroups defined on the basis of educational attainment.

Did PASS help parents with low-wage jobs find better jobs? Unfortunately, the evaluation doesn't appear to answer that question.

Further analysis suggests that approximately two-thirds of the increase in total earnings is attributable to the program's increase in employment. The remaining one-third results from higher earnings among those employed, which may reflect a variety of factors, including differences in the personal characteristics of those who were employed in the two research groups and PASS group members' working more hours or weeks or receiving higher wages. Because UI data are collected as total earnings in a quarter, it is impossible to determine the precise contributions of various potential sources of the earnings increases.

I can't find any measurements of job quality in the report. Even if this can't be done with UI-survey data, it would seem like parents could be surveyed directly to learn about the quality of their jobs pre- and post-assignment, including hourly wage rate, health insurance and retirement benefits, and availability of paid sick and vacation days and family leave.

Ultimately I'm skeptical that social service programs like PASS, which rely primarily on case managment, can do much to overcome the realities and limitations of the low-wage labor market. This newest evaluation, while showing some positive effects, doesn't really alter my skepticism. Absent changes in labor market institutions, better jobs will remain elusive for low-wage workers.