Low-wage workers are seeing gains

Low-wage workers are seeing gains

America’s decade-long economic expansion is finally helping the workers who need it most – those laboring at or near the bottom of the pay scale. While wages are rising for all income levels, they are rising the fastest for those with the lowest pay. But as analysts point out, this isn’t simply a matter of rising tides lifting all boats: instead, new state laws raising the minimum wage above the federal floor of $7.25 account for the biggest gains for low-wage workers. The Washington Post’s Andrew Van Dam and Rachel Siegel

Sure enough, the data suggests that people are not just getting paid more because there is more competition for their services. They are getting paid more because laws now require employers to pay them more. But when you break those low-wage workers into two groups — those who live in states that have raised their minimum wage in the past three years and those in states that have not — the relationship between policy changes and wage gains becomes clearer.

While workers in two dozen states will see the minimum wage rise in 2020, Louisiana is not among them. Columnist Stephanie Grace of The Times-Picayune | New Orleans Advocate notes that public opinion heavily favors raising the wage, as does Gov. John Bel Edwards. But the Legislature and business interests are blocking their will. 

Louisiana just doesn’t have the mechanisms to turn that support into reality — not when the only paths lead through a Legislature that remains deeply tied to big business groups that oppose the change. Unlike some other states, voters here can’t petition to get a measure on the statewide ballot. The only way to force a popular vote is to get two-thirds of lawmakers to approve a proposed constitutional amendment.

Ever optimistic, LBP Executive Director Jan Moller told the Louisiana Radio Network that it’s far too early to predict what the 2020 Legislature – stocked with new faces – will do: 

“I don’t want to predict what this new group of legislators are going to do, I have heard that they are more conservative maybe but they are also brand new and hopefully they are going to take a fresh look at this issue,” says Moller.

 

The costs of food assistance stinginess
A new federal rule by President Donald Trump’s administration will take food away from an estimated 700,000 Americans living near or below the poverty line. As LBP’s anti-hunger policy analyst Danny Mintz explains in an op-ed for The Times-Picayune | New Orleans Advocate, the rule makes it harder for states to get exemptions from strict time limits on SNAP assistance, even for areas experiencing high unemployment. 

The people subject to the time limit are the poorest of the poor. Their average income is only 18% of the poverty line — only $2,248 a year for a single person. Many face severe obstacles to sustaining employment, such as homelessness, limited educational attainment, racial discrimination in the labor market, and contact with the criminal justice system — obstacles that the new rules do nothing to address.

The New York Times’ Austin Frakt and Elsa Pearson explain that while the rule is ostensibly designed to save money, it could end up having the opposite effect. 

One study that Dr. (Seth) Berkowitz (of the University of North Carolina School of Medicine) led found that receiving SNAP benefits was associated with a reduction in annual health care spending of about $1,400 per person among low-income adults. Another study found that each additional $10 of monthly SNAP benefits was linked with a lower risk of hospitalization for Maryland residents enrolled in both Medicare and Medicaid. In Massachusetts, an increase in SNAP benefits slowed the increase in Medicaid hospitalization costs.

 

The problem with “tort reform”
The top priority for Louisiana’s new legislature will be a package of bills aimed at making it harder for people who have been injured in accidents to access the civil legal system. Supporters of “tort reform” claim it will reduce car insurance premiums, which are among the highest in the nation. The Advocate’s Mark Ballard counters that the issue isn’t nearly as clear-cut as supporters claim. 

While doing research on his omnibus tort reform bill, (Rep. Kirk) Talbot’s task force ordered an analysis by a panel of four insurance actuaries, the people who calculate for insurance companies how various situations will impact the number and cost of claims. The report reviewed each of the points in the omnibus bill and found no cost savings, at all.

 

Women are less likely to quit their jobs if they have paid leave
The United States is the world’s only industrialized country where women are not entitled to paid time off from work after giving birth or adopting a child. A new fact sheet by the Institute for Women’s Policy Research shows how this short-sighted policy is bad for the economy, as women who have access to paid leave are less likely to quit their jobs altogether than those who do not. 

Implementation of a state paid family leave policy increases the labor force participation of mothers by six percentage points in the year of a birth, effectively reducing birth-year maternal labor market detachment by 20 percent. Paid family leave increases women’s labor market participation in the longer term as well. Up to five years after a birth, women who had access to paid family leave at the time of the birth are three to six percentage points more likely to be in the labor force. This represents a 20-50 percent reduction in maternal labor market detachment five years after a birth.

 

Number of the Day
14.3 million – Number of American households considered “food insecure.” (Source: The New York Times)