Jobs and Wages

Jobs and Wages Issues

A Paycheck that Supports a Family

For working families in America, the size of their members’ paychecks determines their income and quality of life. After decades of decline, average wages began to pick up in the late 1990s only to hit a wall in 2000.  Six years later wage growth is still stalled.

Before tax, weekly wages of non-supervisory private sector workers in America today are below levels achieved in the early 1960s, and stand nearly 17% below their peak in 1972. Workers are now earning only 83 cents of every dollar they earned more than 35 years ago, while their productivity has increased a dramatic 80%. This is the central explanation for the explosion in corporate profits and the growing income gap in America, and the reason workers in America still believe the economy is moving in the wrong direction. All polls show that it is a big part of the reason why Republicans lost control of Congress.

The reason for this decline in wages and shift upward in the distribution of income are several – but can be boiled down to unbridled pro-corporate globalization, and the right-wing attack on unions and workplace and job market protections. 

In 1972, at the peak of real wages, union membership in the private sector stood at nearly 28%, whereas it is now below 8%.  Today, 25% of American workers earn a wage that puts them at or below poverty, and the minimum wage is a third lower in value than it was in 1968.

In order to reverse the declining standard of living of workers in America and restore the American Dream, Congress needs to:

  • Raise the minimum wage: It should be a first act of Congress to raise the minimum wage from $5.15 to $7.25 per hour; future annual increases should be tied to inflation to take politics out of this basic need.

  • Pass the Employee Free Choice Act: A bipartisan coalition supports this measure, which would restore the rights of private-sector workers to form unions. EFCA means a livable wage, not just a higher minimum wage, as union workers get paid much better than comparable non-union workers, and they have much better health and retirement benefits. There is no more realistic step Congress could take to improve the standard of living of working families over the long-term.

  • Stop the Bush Administration’s union-busting policies: President Bush has accelerated the decline of workers in unions. Congress should block the Department of Labor and the National Labor Relations Board from continuing to pursue anti-union and anti-worker activities. The federal government should beef-up enforcement of the Fair Labor Standards Act, IRS rules on the definition of independent contractor status, and other statutes that are designed to protect workers.

  • Stop job killing, anti-worker “free” trade agreements:  Congress must stop the Bush Administration’s headlong rush to pass new “free” trade agreements, such as NAFTA, and fast track trade authority for the President, which gives him extraordinary authority to negotiate and write trade agreements. After more than a decade of such trade agreements the United States has lost millions of good paying jobs through corporate outsourcing to low-wage countries. America needs fair trade that protects workers at home and abroad.

  • Pass a sensible immigration policy: We need to protect our borders and control the flow of immigration as we promote policies that prevent undocumented workers from being used as fodder in the corporate push to drive down wages and working conditions. Undocumented workers contribute much to America – paying taxes and making significant contributions to their communities. They should be able to earn legalization and be provided with a path to citizenship. Immigrant workers also need full workplace protections, including the right to join together into unions, so that all workers are protected.

Millions of workers have been able to achieve the American Dream over the last 70 years thanks to unions. The union movement led the fight for the minimum wage and the eight-hour work day, it pioneered employer-provided health care and pension plans for workers, it played a leading role securing Social Security and Medicare for seniors, and it won major advances ensuring workplace safety and workers’ rights.

Today, unions are at the forefront of securing livable wages for all workers. Wages of union members are 28% higher than those of nonunion workers, on average. When you add up the much better health care and pension benefits union workers receive, the total compensation of union workers is 44% higher than that of non-union workers.

The more workers unite together in unions, the better off everyone is. But when unions are under attack, as they are today, workers face stagnant wages and declining health and retirement benefits.

To restore the American Dream we need to turn the low-paying, no-benefit jobs of today into the union wage, middle-class jobs of tomorrow. America did it once before – jobs in the auto, steel and other manufacturing industries used to have the low-wages and poor benefits of many of today’s service-sector jobs. But, too often in America when workers try to form a union their employers go to war. They undertake ruthless anti-union campaigns, hire high-priced consultants that specialize in opposing workers trying to better their lives, and even engage in illegal tactics to deny workers the fundamental right to have a voice on the job.

That’s why Congress needs to enact into law the Employee Free Choice Act. Learn more about this important bill: