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.