In order to build wealth and create opportunities in and across America’s underserved communities, and reverse the troubling trends we’re seeing in our economy, we no longer find it defensible to focus on job creation alone. It’s clear that job creation does not itself equate to lasting economic change. And so, we must shift our focus to the creation of higher quality jobs — jobs that are good for workers and their families, good for businesses, and good for communities — enabling us to build an economy that works for everyone.
Each month, we bring you the latest roundup of news from the fight for quality jobs for working people.
Happy New Year! Higher Wages for 4.3 Million Workers Across the Country
At the start of the new year, 19 states increased their minimum wages, lifting the pay of over 4.3 million workers. This is the largest number of states ever in a given year to increase their minimum wages absent an increase in the federal minimum wage. There are now 29 states and the District of Columbia that have a minimum wage higher than the federal minimum wage. Read more on Alternet >
A big reason for many wage increases across the states is the “Fight for 15” movement. The movement just celebrated its four-year anniversary of its first protest event, back in 2012. The National Employment Law Project (NELP) reminds us that the date marks the day that New York City’s fast food workers first “walked off their jobs demanding $15 an hour and union rights.” The movement has come a long way. While 200 workers took part in that one-day strike four Novembers ago, thousands have now risen nationwide, spanning across 340 cities to mark the event. Read more on Nonprofit Quarterly >
And the idea that raising wages can hurt business? Totally debunked. When California began raising its minimum wage two years ago, Bill Phelps and his investors were worried. Phelps is CEO of a fast food company called Wetzel’s Pretzels, which has almost 100 outlets in California. So two years ago, Phelps prepared to take a hit. But something else happened entirely. Sales at his California stores immediately shot up. Read more on KQED >
Don’t Be Fooled By Low Unemployment
As of the end of January, the official unemployment rate is at 4.8%, and economists are declaring the economy us at “full employment”. But that term doesn’t mean people who need jobs can get them, or that people who are stuck in part-time or temporary work can get full-time jobs. In fact…
Almost all the US jobs created since 2005 are temporary. Research is showing that 94% of net job growth in the past decade was in the alternative work category. Over 60% was due to the rise of independent contractors, freelancers and contract company workers. In other words, nearly all of the 10 million jobs created between 2005 and 2015 were not the traditional nine-to-five jobs that America needs. Read more on QZ >
Over six years into an economic recovery, the share of people working part time because they can only get part-time hours remains at recessionary levels. A new report from the Economic Policy Institute highlights two sectors that seem to be driving the trend — the retail industry, and the leisure and hospitality industry — and also finds that Hispanic and African-American workers are disproportionately represented among the ranks of the involuntarily part time. Read more on Pacific Standard >
Think of your own household. Does $2,600 a month (if all goes well) seem like enough to pay for food, rent or mortgage, transportation, childcare and whatever other monthly expenses you might have? Does $30,000 a year seem like it is going to leave you with a little something you can put aside to save for a house, or your children’s education, or your retirement, to say nothing of covering an unexpected family emergency? Chances are the answer is no. In fact, nearly half of Americans cannot afford an unexpected $400 obligation.
So how do we create more good jobs across America? In the social sector, philanthropy has a huge role that they need to play. Our friends at The Aspen Institute say our nation should not ask people to show up every day and devote most of their waking hours to work in exchange for a paycheck that’s insufficient to cover basic needs. They’ve also put out a new report — Philanthropy and the Future of Work — presenting several recommendations for increasing economic opportunity. Read more on the Annie E. Casey Foundation blog >
Doing The Right Thing: Still Good For Business
B Corps are riding a wave of consumer interest in sustainable companies. According to several studies, consumers say they will pay more for sustainable consumer brands, and sales of consumer goods with a demonstrated commitment to sustainability have grown more than 4% globally, while those without grew less than 1%. But while consumers are clearly rewarding values-based businesses, there’s a very big catch: Consumers are not accepting brands’ social and environmental claims at face value.
In 2012, Cabot became a certified B Corp. The certification not only addressed questions posed by their retail partners but also delivered value beyond their expectations. B Corp certification encouraged more “whole-systems thinking” around social and environmental practices, which led Cabot to develop even more robust customer and consumer programs, cut operating costs, and strengthen our brand reputation as a sustainability-minded company. Read more in Harvard Business Review >
IKEA will offer all its US employees up to four months of paid parental leave, making the retailer one of the first companies to extend benefits to hourly employees that are usually available only to white-collar workers. Read more on QZ >
Shake Shack is another company that’s betting its customers will pay a tiny amount more (30 cents) as it works to raise wages for its employees and offer them health benefits. In other words: good employment practices. They’re now able to pay more than the local minimum wage in every location they’re in. Read more on Salon >
Not all startups are focused on tech. Nick Pinkston is the CEO of Plethora, a startup re-imagining factories and the manufacturing industry. He grew up in rural Pennsylvania in a family that spent more than three generations in the manufacturing industry. They worked in coal mining in West Virginia and then in ceramics in New Castle, Pennsylvania, where he grew up. In this interview he talks about factory automation and what federal and local policy can do to support middle-income manufacturing jobs. Read more on Medium >
Doing The Wrong Thing: Still Business As Usual
Another major factor working against an economy that creates more and better jobs: Amazon. Since it’s founding, it’s estimated that Amazon has killed well over a million American jobs and driven thousands of small businesses out of business. In fact, while Amazon has been on a PR offensive about its plans to add 100,000 jobs in the next year, what you aren’t hearing is that for every 1 job Amazon creates, it destroys 2-3 others.
For retail workers, Amazon is a grave threat. Just ask the 10,100 workers who are losing their jobs at Macy’s. Or the 4,000 at The Limited. Or the thousands of workers at Sears and Kmart, which just announced 150 stores will be closing. Or the 125,000 retail workers who’ve been laid off over the past two years.
Now, a new report from ILSR looks at how Amazon’s increasing dominance comes with high costs. It’s eroding opportunity and fueling inequality, and it’s concentrating power in ways that endanger competition, community life, and democracy. And yet these consequences have gone largely unnoticed thanks to Amazon’s remarkable invisibility and the way its tentacles have quietly extended their reach. Read more on ILSR >
And it’s not just job quantity, but quality as well. An analysis of 11 metro areas found that Amazon wages, which are concentrated in “order fulfillment,” not traditional customer service, are some 15 percent lower than the typical pay scale for comparable non-Amazon workers. In Kenosha, Wisconsin, home to two fulfillment centers, an Amazon warehouse worker earns nearly $3.40 per hour less than the average local warehouse worker, which is in turn over $4 less than the local hourly living wage of $16.50. Read more on The Nation >
The Effects Of Policy On Good Jobs
Thomas Piketty and Emmanuel Saez take a hard look at America’s generation-long stagnation of pre-tax incomes among the bottom 50 percent of wage earners, and feel that the policy discussion at the federal, state, and local levels should focus on how to equalize the distribution of human capital, financial capital, and bargaining power rather than merely the redistribution of national income after taxes. They go on to list policies that could raise the pre-tax incomes of the bottom 50 percent of income earners. Read more on Equitable Growth >
Another study, from Stanford, looks at how rising income inequality has eroded the ability for American children to grow up to earn more than their parents. The researchers say rising concentration of income among the richest Americans explains 70 percent of what has been a steady decline in mobility from the baby boom generation to millennials. That has real policy implications in the near term, because those finding suggest Trump’s tax-cut plans would do little to improve economic mobility for struggling blue-collar families, even if they help accelerate growth. Read more on The Washington Post >
Speaking of broad-based opportunity, Latinos and African Americans holder relatively low levels of business assets, contributing to their lower levels of wealth overall. Yet there are trends in the right direction: rates of business creation among entrepreneurs of color are increasing, and now exceed those of whites. A new paper from The Aspen Institute outlines short- and long-term policy recommendations to address the racial wealth gap through business ownership strategies. Read more on Aspen >
Beginning this year, PCV has shifted its mission in order to move our economy to one where quality jobs are the norm—not the exception. CDFIs like ours must build consensus around a common definition of a quality job, undertake practical efforts to foster the creation of quality jobs, and measure results to understand what works.