September 2012, Week 3


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How to Make Work Pay Again

by Richard Kirsch

Next New Deal - The Blog of the Roosevelt Institute
September 13, 2012


The latest Census data prove that we need to start rebuilding
the American middle class, and a new report shows how it can
be done.

Yesterday the U.S. Census Bureau reported that family income
in the U.S. dropped to its lowest level in 16 years. The key
thing in this news is that the drop is not just over the last
three years, during the Great Recession. The squeeze on the
middle class isn't new, it wasn't caused by the recession, and
it won't be fixed as we come out of the recession. If we're
going to rebuild the middle class, we need an agenda aimed at
making work pay in the 21st century.

That's why I worked with more than 20 groups who understand
the daily struggles of working families on a new report we're
releasing today, 10 Ways to Rebuild the Middle Class for Hard
Working Americans: Making Work Pay in the 21st Century. The
report is a road map for addressing the truth that we don't
just have a jobs problem; we have a good jobs problem.

Before we get to what we do about it, we need to confront the
fact that even though the proportion of Americans with a
college education doubled in the past three decades, the share
of working people with a decent job dropped. Six out of ten
(58 percent) jobs now emerging from the recession are low-
wage. On top of that, the jobs projected to have the most
openings between now and 2020 are mostly low-wage and require
no more than a high school education. So there is no reason to
think things will get better unless we act.

One set of solutions proposed in 10 Ways to Rebuild the Middle
Class is to tackle the lack of support and protections for
low-wage workers. A first step is to restore the minimum wage,
which buys 30 percent less now than it did 40 years ago. The
minimum wage for tipped workers is $2.13 an hour, the same as
it was in 1991. One in five workers would get a pay raise if
the minimum wage were increased. That includes workers who get
paid just above today's minimum wage, who would also benefit
as the legal floor got raised.

Remarkably, four out of ten private sector jobs - including
the great majority of low-wage jobs - do not give employees
any paid time off if they are sick or need to care for an ill
family member. In response, Connecticut and several cities
have passed paid sick days ordinances. The federal government
and states and localities should update basic labor standards
to include this essential benefit to working families.

The report recommends tough enforcement, with meaningful
penalties, of laws that unscrupulous employers now routinely
flout. Many employers of low-wage workers routinely steal
wages by not paying the minimum wage, not paying for overtime,
or simply not paying workers at all. Other employers
misclassify workers as "independent contractors" in order to
get out of paying payroll taxes or benefits and hire
"permatemps." Worker safety and health is another area where
measly penalties, weak enforcement, and widespread retaliation
against workers who dare to speak up allow employers to keep
low-wage workers in hazardous work conditions every day.

It will take systemic solutions to address the broader problem
of stagnant wages. A crucial step is to uphold the freedom of
workers to organize a union by modernizing the National Labor
Relations Act and stopping employers from harassing organizing
efforts with virtual impunity. Nothing in our nation's history
has done more to bring workers decent pay, benefits, and
dignity at work than organized labor. The factory workers of
the mid-20th Century didn't have a college education; they
organized unions. The low-wage workers of the 21st Century -
the housekeepers and janitors and home health aids and retail
clerks - will only be able to get decent wages and become part
of the middle class when they are able to effectively organize
to bargain collectively.

Other proposals in the 10 Ways to Rebuild the Middle Class
report would create new social insurance protections for the
21st Century, just as Medicare, Social Security, and Medicaid
were key to fighting poverty and building the middle class in
the last century. The nation took one major step in 2010 with
the passage of the Affordable Care Act, which in 2014 will
enable working families to get affordable health coverage even
if they don't get it on the job.

The report proposes two other steps to provide families more
security in their work and in their retirement. Though today's
norm is for all the adults in a family to be in the workforce,
only one in ten workers (12 percent) has paid family leave
through work to care for a new child or a sick family member.
A solution is to establish a national family and medical leave
insurance program, similar to Social Security and successful
programs in California and New Jersey, for workers to draw on
when they are out on family leave.

To address the fact that pensions have been replaced by
thread-bare 401Ks over the past 30 years, the report
recommends establishing new pooled and professionally managed
retirement plans for those who rely solely on Social Security
and 401Ks, which would pay a defined amount - a pension - each

In addition to these and other steps, 10 Ways to Rebuild the
Middle Class recognizes that a foundation of improving work is
full employment. That is why we need to stop laying off public
workers and outsourcing jobs overseas.  It's also why we
should create millions of jobs now by investing in
infrastructure and a green economy.

Rebuilding the middle class is about more than assuring that
every working American can support his or her family with
dignity and security. It's about powering the economy forward
in the 21st Century. The middle class is the engine of our
economy, an engine that can only be rebuilt by making today's
jobs good and tomorrow's jobs better.

Richard Kirsch is a Senior Fellow at the Roosevelt Institute,
a Senior Adviser to USAction, and the author of Fighting for
Our Health. He was National Campaign Manager of Health Care
for America Now during the legislative battle to pass reform.

[Richard Kirsch is a Senior Fellow at the Roosevelt Institute
and the author of Fighting for Our Health: The Epic Battle to
Make Health Care a Right in the United States, published in
February 2012 by the Rockefeller Institute Press. He is also
Senior Adviser to USAction and an Institute Fellow at the
Rockefeller institute.

Prior to joining the Institute, Mr. Kirsch was the National
Campaign Manager of Health Care for America Now from the
Campaign's founding to its successful conclusion in April
2010. HCAN is an 1,100 member coalition, led by major
progressive organizations, that deployed staff in 44 states
and spent $47 million to organize for comprehensive health
care reform. As HCAN's chief spokesperson, Mr. Kirsch appeared
on PBS's The News Hour with Jim Lehrer, CNN, ABC's World News
Tonight and Good Morning America, Fox, CSPAN, and the Colbert
Report and was frequently quoted in the New York Times,
Washington Post, Wall Street Journal and other national
newspapers, as well as NPR's Morning Edition, All Things
Considered and Marketplace. Mr. Kirsch now serves as a Senior
Advisor to HCAN.

From 1985 to 2008 Mr. Kirsch served as Executive Director of
Citizen Action of New York, a grassroots citizen's
organization with 20,000 members and seven offices in New
York. Mr. Kirsch also served as Executive Director of the
Public Policy and Education Fund of New York, a research and
educational foundation affiliated with Citizen Action.]


10 Ways to Rebuild the Middle Class for Hard Working
Americans: Making Work Pay in the 21st Century


Executive Summary

The middle class is the great engine of the American economy.
But today that engine is sputtering and as a result, both
American families and the economy are struggling. The wages of
most workers have been stuck in neutral for 30 years. More and
more Americans - even those with college degrees - are toiling
in jobs that do not pay enough to support their families in
dignity and offer hope of a brighter future. And the jobs that
will grow the most in the next decade are low wage, stripped
of benefits and requiring no more than a high school diploma.
Unless our nation focuses on making today's jobs better and
tomorrow's jobs good, the long-term prospects for our
families' well-being and the national economy are bleak.

Our nation grew in prosperity and opportunity in the 20th
century as our government, business and labor worked together
to promote policies to build the middle class, founded on
earning decent wages and benefits and broadly sharing in the
nation's growing prosperity. But in the past 30 years, the
picture has been turned upside down. The poorest fifth got
poorer and middle-income families gained very little, with
only upper income Americans seeing significant increases in

The growing number of low-wage jobs do not come with basics
like paid sick days to allow workers to care for themselves or
their families. And only a small proportion of Americans can
take time off from work to care for a newborn child or a sick
family member, without losing their entire paycheck.

As we inch out of the Great Recession of 2009, the majority
(58%) of the jobs that have been regained are low wage. When
we look forward, the prospects are no better. Eight of the 10
high-growth jobs - covering four million workers - require no
more than a high school education.

Rebuilding the great American middle class in the 21st century
will once again take deliberate action by the American people,
through our government and by businesses that understand -
even in the global economy - that our mutual long-term
prosperity depends on treating workers everywhere with dignity
and giving them the means to a decent standard of living. It
will mean taking a u-turn from the policies of the past 30
years, which have squeezed workers in the pursuit of short-
term profits, slowly hollowing out the middle class on which
our long-term prosperity is built.

10 Ways to Rebuild the Middle Class for Hard Working
Americans: Making Work Pay in the 21st Century lays out a road
map for this u-turn. We describe common sense policies towards
making today's jobs better and tomorrow's jobs good. The core
value guiding this road map is that work lies at the center of
a robust and sustainable economy; that all work has dignity;
and that through work, all of us should be able to support our
families, educate our children and enjoy our retirements.

1.   Make every job a good job. Today, the majority of the
high-growth jobs in America - retail sales, home health and
personal aides, food prep workers and the like - pay very low
wages and provide little chance of promotion. We will not
build the strong middle class we need to power the economy
forward in the 21st century unless we make sure that today's
jobs and tomorrow's jobs provide good wages and benefits. 2.
Fix the minimum wage. Restoring the lost value of the minimum
wage, indexing it to inflation and raising the tipped-worker
wage will increase take-home pay for 28 million hardworking
Americans and boost consumer spending and job creation in
communities across the United States.

3.   Save good public and private jobs. Public employment has
been a pathway to the middle class for millions of workers,
but today, public employees are being laid off in record
numbers or having their jobs privatized to low-wage firms. And
big corporations are outsourcing good jobs from the U.S. to
other countries around the world. We need to stop cuts and
privatization of good public jobs. And we must stop rewarding
corporations for shipping jobs overseas

4.   Ensure health and retirement security. With the
likelihood of getting health and retirement benefits at work
plummeting for all workers - and dropping even more for low-
income workers - we need to strengthen the partnership between
employers, workers and the public to ensure that all of us
have health and retirement security. That will require
implementing the Affordable Care Act, protecting Medicare,
Medicaid and Social Security and establishing new retirement
plans for those workers who rely now just on Social Security
and 401K accounts.

5.   Uphold the freedom to join a union. Unions are key to
creating good jobs, and not just for union workers. But
outdated laws and corporate-driven policies have severely
weakened the ability of workers to freely join a union and
collectively bargain. The decimation of unions is a big reason
why wages and benefits are down and our economy is sputtering.
Our public policy should uphold the freedom for all workers to
stick together and choose to be represented by unions.

6.   Make the modern workplace pro-family. The rules of the
workplace have not kept up with the changes in the workforce.
Managing work-family conflict is toughest on the lowest-wage
workers, who have the least access to paid leave. Earned sick
days and affordable family leave are indispensible to today's
workforce, our communities and economy.

7.   Stop wage theft. We all should get paid for the work we
do, but the reality is that wage theft is all too common,
particularly for low-wage workers, in a wide variety of jobs.
We must strengthen and enforce the laws to stop employers from
stealing wages as many currently do by: paying workers less
than the minimum wage; not paying for overtime; and sometimes
not paying workers at all.

8.   Require that your boss be your employer. Stop employers
from escaping responsibility for paying their workers decent
wages and benefits by stopping the use of hiring permanent
temp workers and the misclassifying of employees as
independent contractors and by directing public dollars to
employers who hire worker directly.

9.   Give unemployed workers a real, fresh start. It is tough
enough to be out of work, without having to face
discrimination because you are unemployed and the fear that
you will lose your unemployment insurance before finding a
job. We should stop hiring discrimination against unemployed
job seekers and instead, help them get good jobs and keep them
solvent while they are looking for one.

10.   Toughen laws protecting worker safety and health. With
millions of workplace injuries and illnesses each year, the
law must be strengthened to punish employers who create unsafe
work conditions and retaliate against workers who speak up. In
addition, injured and ill workers need a stronger social
insurance program that is transparent and unbiased, and
ensures immediate access to health care for workers and
adequate compensation for lost wages.



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