Research AreasLabor Markets, Wages & PovertyLabor Markets Archive

For PERI research on Labor Markets, Wages & Poverty from the current year, please go to the program home page.

Combining Minimum Wage and Earned Income Tax Credit Policies to Guarantee a Decent Living Standard to All U.S. Workers

October 2010 -- Current federal policies to ‘make work pay’ leave the vast majority―88%―of low-income working families in the U.S. without the guarantee of a decent living standard, even with full-time work. In their new study, Jeannette Wicks-Lim and Jeffrey Thompson advance proposals to substantially strengthen minimum wage laws and the federal Earned Income Tax Credit (EITC) program in the United States, so that, in combination, they can guarantee decent living standards for all full-time U.S. workers and their families. By considering minimum wage laws and the EITC as complements, they show how these measures can operate most effectively and, crucially, how any possible negative unintended consequences of each measure can be minimized.

>> Download “Combining Minimum Wage and Earned Income Tax Credit Policies to Guarantee a Decent Living Standard to All U.S. Workers”

The Wage Penalty for State and Local Government Employees in New England

September 2010 -- The refrain that government workers are overpaid, and their benefits expansive, returns with each state and local budget season. In this study, "The Wage Penalty for State and Local Government Employees in New England," PERI’s Jeffrey Thompson and John Schmitt of the Center for Economic Policy Research demonstrate that in New England the reality is the opposite. While the average state or local government worker does earn higher wages than in the private sector, this is because they are, on average, older and substantially better educated. In reality, there is a wage penalty for public workers in New England of close to 3%.

>> Download "The Wage Penalty for State and Local Government Employees in New England"

A Plan for a U.S. Manufacturing Revivial

April 2010 -- In this cover article for New Labor Forum, Robert Pollin and Dean Baker ask: Can we establish a growth engine driven by something other than financial bubbles? Can we renew the automobile industry and, more generally, re-establish a healthy manufacturing sector? Can we accomplish these various tasks while also rebuilding the economy on a new foundation of clean energy as opposed to fossil fuel energy sources? Are all of these projects also compatible with expanding decent job opportunities throughout the U.S. economy?

Pollin & Baker lay out a specific plan to support the revival of the manufacturing sector, including the U.S. auto industry. They sketch a program to substantially increase the number of buses on the streets of our communities, and explore a longer-term project of expanding U.S. manufacturing capacity in rail transportation products and the renewable energy industry.

>> Download “Reindustrializing America: A Proposal for Reviving U.S. Manufacturing and Creating Millions of Good Jobs”

The Path to Four Percent Unemployment

March 2010 -- Robert Pollin argues in this Nation cover article that the best way to address the nation’s continuing job losses is a “commitment from the Obama administration to create 18 million new jobs over the remaining three years of the presidential term. That would mean an average increase of about 500,000 jobs per month, or a bit more than 4 percent growth in job creation over the next three years.” Pollin makes the case that this goal may be ambitious, but it is not unrealistic. A careful combination of job-generating public investments, incentives to mobilize private investment, and policies that protect economically vulnerable populations could create the economic and policy environment to make this goal possible.

>> Read “18 Million Jobs by 2012: How Obama Can Save His Presidency”
>> Download the Technical Appendix and References
>> Read earlier articles in The Nation by Robert Pollin

The Economic Impact of a Living Wage for Nashville

November 2009 -- Robert Pollin and Jeannette Wicks-Lim consider the economic impact of two living wage proposals for Nashville-Davidson County, Tennessee. Pollin and Wicks-Lim look at the overall costs of each proposal, which offer a wage of $10.80 per hour and health insurance benefits to two alternative pools of workers, and break those costs into direct wage costs, health insurance costs, and ripple-effect costs. They place these expenses in context as a share of the local government budget, and consider a range of potential revenue sources to cover them. The authors then discuss the benefits that the living wage proposals would bring, not only to the workers, but to state and local governments, businesses, and low-income communities in general.

>>  Download “An Economic Analysis of the Nashville Living Wage Proposals”

The Employment Benefits of Alternatives to Military Spending

October 2009 -- In this study, produced in collaboration with the Institute for Policy Studies, Robert Pollin and Heidi Garrett-Peltier update their 2007 analysis of the relative employment impacts of public investment in military versus other priorities, expanding their analysis to include clean energy investments and induced job creation. The authors compare the effects of a $1 billion investment in the military with the same investment in clean energy, health care, education, or individual tax cuts. They show that non-military investments create many more jobs across all pay ranges. With a large share of the federal budget at stake, Pollin and Garrett-Peltier make a strong case that non-military spending priorities can create significantly greater opportunities for decent employment throughout the U.S. economy than spending the same amount of funds with the military.

>> Download "The U.S. Employment Effects of Military and Domestic Spending Priorities: An Updated Analysis"

Collective Bargaining as a Path to Decent Jobs

September 2009 -- In “Creating Decent Jobs in the United States,” Jeannette Wicks-Lim finds that to improve workers’ wages and benefits in the coming decade, we must create meaningful improvements in pay and benefits in the occupations showing the strongest growth, and that collective bargaining presents a powerful way to do so. Wicks-Lim finds that a union worker has a 20 percent greater chance of having a decent job than a similar non-union worker. The study also shows that there is no strong evidence that higher unionization rates lead to higher unemployment rates. 

>> Download “Creating Decent Jobs in the United States: The Role of Labor Unions and Collective Bargaining”

Raising Living Standards During an Economic Crisis

May 2009 -- For Roll Call’s special issue on the future of the American worker, Robert Pollin explores how we can use this moment of crisis to address the decline in living standards for working families in the U.S. Pollin describes the dramatic downward trend in workers' wages and bargaining power over the past 35 years, and explores a few of the principle factors contributing to that history. He recommends one central approach to turn the trend around: restoring the idea of full employment at decent wages as a moral centerpiece of economic policy, as it was for a generation coming out of the 1930s depression. Pollin emphasizes the importance of enacting the Employee Free Choice Act as a major policy tool for advancing this broader social justice agenda. 

>> Download "Standard of Living Must be Restored"

Promoting Living Wages During an Economic Crisis

March 2009 -- In this column for Dollars & Sense, Assistant Research Professor Jeannette Wick-Lim asks the controversial question "Should we be talking about living wages now?" As she writes, "In today’s economic climate, the worst since the Great Depression, are the raises demanded by living-wage campaigns a luxury? Should living-wage campaigns take a back seat to pulling the economy out of recession?" Wicks-Lim argues that in this crisis economy the lowest-paid workers are the most vulnerable, and hence this is a moment when their rights and protections need to be supported with ongoing vigilance. She looks toward two policy prescriptions: using the economic recovery plan as a tool to impose living-wage requirements, and creating a long-term living-wage policy with multi-step raises guided by interim economic impact studies.

>> Download "Should We Be Talking about Living Wages Now?"

Scholars in Support of the Employee Free Choice Act

March 2009 -- High unemployment rates, rising wage inequality and declining living standards for working families all result, in part, from dramatic losses in bargaining power for workers over recent decades. The Employee Free Choice Act, which will protect and expand workers’ rights to form unions and bargain collectively, is a potentially powerful tool to reverse this trend, and faces likely legislative action in the coming months. With this in mind, PERI has added an EFCA resources page to our website, where we will post research, media coverage, and other useful information.  

The PERI Employee Free Choice Act Resource page also hosts a statement of support for the act by economists and other social scientists. Hundreds of scholars have already signed on to show their support for this critical legislative item.  

>> Go to the Employee Free Choice Act resource page
>> Sign on as a Scholar for the Employee Free Choice Act

How Infrastructure Investments Support the U.S. Economy

January 2009 -- With the deterioration of economic conditions in recent months, public investment is back on the policy agenda, as a job-creation program linked to the need to revitalize the nation’s crumbling infrastructure. This report examines the employment impacts of an expanded infrastructure investment program and what it would take to create millions of jobs. It assesses the long-run impacts of such a program on productivity and economic growth, and offers brief observations on U.S. competitiveness and environmental sustainability that emerge from the findings. 

>> Download "How Infrastructure Investments Support the U.S. Economy"

A Measure of Fairness: The Economics of Living Wages and Minimum Wages in the United States

March 2008 -- Over the past decade, Robert Pollin, Mark Brenner, Jeannette Wicks-Lim, and Stephanie Luce of PERI have conducted extensive research on living wage and minimum wage proposals for municipalities and states around the country. A Measure of Fairness: The Economics of Living Wages and Minimum Wages in the United States brings together much of this research. The book addresses basic questions such as: What is a living wage? Do living wage standards create unemployment and force businesses to relocate? How much do workers and their families actually benefit from establishing living wage standards? How much do communities gain when workers receive higher wages?

As Carol Oppenheimer and Morty Simon, living wage organizers in Santa Fe write that A Measure of Fairness “is a must-read for local activists, economists, and all political leaders concerned with economic justice.”

>> In this related interview, Jen Kern, Director of the ACORN Living Wage Resource Center offers her perspective on PERI's role in the living wage movement.
>> Order A Measure of Fairness from Cornell University Press

The U.S. Employment Effects of Military and Domestic Spending Priorities

October 2007 -- The war in Iraq is a strategic and moral disaster. But one issue relating to the war that hasn’t been addressed in depth is its impact on the U.S. economy. In the first of a series of research papers that will consider this issue, Robert Pollin and Heidi Garrett-Peltier consider the impact of military spending versus spending on a series of peaceful priorities -- including health care, education, and energy conservation -- on job creation in the U.S. The study finds, for example, that while investing a billion dollars of tax revenue in the military creates 8,500 jobs, investing the same amount in education or mass transit yields more than twice that number of jobs. This study is co-sponsored by the Institute for Policy Studies and Women’s Action for New Directions.

>> Download "The U.S. Employment Effects of Military and Domestic Spending Priorities"

Is Full Employment Possible under Globalization? Robert Pollin's Sumner Rosen Memorial Lecture

April 2008 -- To honor the life work of Professor Sumner Rosen, this lecture examines approaches to promoting full employment at decent jobs within our contemporary era of globalization. The lecture briefly summarizes the theories of unemployment of Marx, Friedman, Keynes and Kalecki. It then addresses the meaning of full employment within the alternative theories and under different historical and country settings. It next considers the issue of the inflation/unemployment trade-off, and the Meidner-Rehn Swedish approach to inflation control under full employment. It concludes by presenting a sketch of something approximating a full employment program for the contemporary U.S. economy, focusing on ending the Iraq war and reallocation public spending toward health care, education, and green growth. 

>> Download "Is Full Employment Possible under Globalization?"

Making the Federal Minimum Wage a Living Wage

Right before the Memorial Day recess, Congress finally passed into law, and President Bush signed, the first federal minimum wage increase in 10 years. The federal minimum will now rise in three steps up to $7.25 as of July 2009. This is a positive, but still very modest gain for low-wage workers in the U.S. In his new 'Economic Prospects' column for New Labor Forum, PERI Co-Director Robert Pollin, evaluates the new minimum wage law and proposes a strategy for bringing the federal minimum much closer to a living wage standard.

>> Download "Making the Federal Minimum Wage a Living Wage"

Economic Analysis of Arizona's Minimum Wage

November 2006 -- On November 7, 2006, six states voted on whether to set a minimum wage higher than the $5.15 federal rate. The outcome was a powerful affirmative--66% in Arizona, 69% in Nevada, 73% in Montana, 76% in Missouri, and 53% in Colorado. 

PERI continues to be a critical voice in this national trend, providing campaigns with rigorous economic analysis of the impact of wage floors, in time to feed into campaigns like these. In October, PERI researchers Robert Pollin and Jeannette Wicks-Lim completed an analysis of the Arizona ballot proposal to set a $6.75 minimum wage with automatic inflation adjustments. The research was sponsored and published by the Center for American Progress. The report provided the basic facts that policymakers and voters needed to assess the likely economic impact of this proposal. Pollin and Wicks-Lim presented their study in Phoenix on October 31, in a series of press events and meetings with policymakers.

>> Read the full study

Mandated Wage Floors and the Wage Structure: New Estimates of the Ripple Effects of Minimum Wage Laws

May 2006 -- When a school, a county, or a state raises its minimum wage, clearly the lowest-wage workers see an increase in earnings. But there is evidence that the impact does not stop there, but creates a 'ripple effect' on other wages. PERI Research Fellow Jeannette Wicks-Lim's ongoing exploration of this issue is now available as a PERI Working Paper, and at the same time made accessible to non-economists as an article in the May/June 2006 issue of Dollars & Sense magazine.
>> Download "Mandated Wage Floors and the Wage Structure"

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