Labor Policy

Labor policy to address economic insecurity has three goals. First, government policy should help people achieve the education and skills they need to be successful in the workplace. Second, anyone who works should be compensated fairly. Third, working conditions should be safe and reasonable.

While these goals might garner broad support, when and how they might be achieved are highly contentious. Broad agreement on what policies would achieve these goals does not always exist. The U.S. has traditionally approached these three goals through supporting education, the regulation of wages, work-related benefits, and working conditions.

Policy Options
Raise the minimum wage 1. Raise the minimum wage.

2. Raise the minimum wage and index it to inflation.

3. Raise the minimum wage and index it to the growth in the average or median wage.

Improve or eliminate subminimum wages
← → Equity Policy
1. End subminimum wages for workers with disabilities.

2. Tie the subminimum wage for tipped workers to 70 percent of the minimum wage.

3. End subminimum wages for all employees.

4. Reform wages for incarcerated persons.

5. Require companies that pay independent contractors to provide proof that each contractor earned at least the minimum wage.

Update overtime and work scheduling rules 1. Index the salary thresholds for overtime-exempt status to the growth in the average or median wage.

2. Raise the salary threshold for overtime-exempt status and index it to the growth in the average or median wage.

3. Explore the need for a commission in the U.S. Department of Labor to study existing state and local Fair Workweek Laws and make federal recommendations for adoption.

4. Explore options to provide better predictability for workers.

Update wage and hiring rules
← → Equity Policy
1. Prohibit the requirement that applicants must disclose prior criminal records during the job application process.

2. Prohibit the requirement that applicants must disclose prior salary or pay information during the job application and salary negotiation process.

Improve labor law enforcement
← → Equity Policy
1. Increase staffing and funding of the labor regulatory bodies: Wage and Hour Division, Occupational Safety and Health Administration, Equal Employment Opportunity Commission, and National Labor Relations Board.

2. Review procedures for reporting workplace complaints at all four agencies and make recommendations for improvement.

3. Make it easier for workers to choose to be represented by a union.

Provide support for unemployed workers 1. Create a Job Seekers’ Allowance.

2. Increase access to transitional jobs programs.

3. Increase funding and opportunities for job training.

Reform Unemployment Insurance (UI)
← → Benefit Policy
1. Implement federal standards for benefit levels, eligibility requirements, state tax rates, and state tax bases.

2. Overhaul the data reporting architecture and create new performance measures for states regarding benefit levels, eligibility, and receipt rates.

3. Explore the cost and benefits of fully federalizing the UI tax and benefit system.

4. Bring independent contractors and self-employed permanently into the UI system.

5. Short-Time Compensation included in every UI system.

← → This symbol appears throughout the Policy Options tables in cases where a policy fits well under multiple pillars.

Raise the minimum wage

The federal minimum wage is currently $7.25 per hour. It was last raised in 2007 and increased over a three-year period to its current level in 2009.116U.S. Department of Labor, Wage and Hour Division. History of Changes to the Minimum Wage Law. This phase-in gave employers time to adjust. Since this phase-in, Congress has enacted no increases or automatic adjustments to keep pace with rising costs-of-living.117At full-time work (40 hours per week, 52 weeks per year), a minimum wage worker earning the federal minimum wage earns $15,080 annually. Had the minimum wage increased with inflation (CPI-U) since January 2009, it would have been $8.86 as of January 2021($18,429 annually). Had it increased with median weekly earnings since the first quarter of 2009, it would have been $9.74 as of the fourth quarter of 2019 ($20,259 annually). Had it increased with average hourly earnings in the private sector since January 2009, it would have been $9.88 as of January 2021 ($20,550 annually) (1/2021 data preliminary at time of extraction).

In 29118U.S. Department of Labor, Wage and Hour Division. 2021. Consolidated Minimum Wage Table. states and 53119UC Berkeley Labor Center. 2020. Inventory of US City and County Minimum Wage Ordinances. cities and counties, the minimum wage is higher than the federal minimum. The labor movement has galvanized around the Fight for $15 since 2014.120In 2014, SeaTac became the first city in the United States to institute a $15 minimum wage as a result of employers at SeaTac playing “hardball” during union negotiations. As leverage, union organizer David Rolf put a $15 minimum wage on the city ballot. Much to his surprise, it passed, and since then many other cities, counties, and states have followed suit (Bergman, 2015). In 2020, Florida became the most recent state to act when 61 percent of voters supported a referendum to raise the minimum wage to $15 per hour by October of 2026; its minimum wage is slated to rise from $8.65 to $10.00 in October 2021, and by $1.00 per year each October until 2026.121The National Law Review. 2020. Florida Minimum Wage To Increase. Volume X, Number 366.

In 2020, 329,000 U.S. workers earned the federal minimum of $7.25 an hour and 1.2 million earned less than that amount, comprising 1.9 percent of all hourly-paid employees.122Bureau of Labor Statistics. 2020. Characteristics of minimum wage workers, 2019. For a household of four with one full-time worker to earn an above-poverty income in 2021, the minimum wage would have to be $12.75 an hour.123The 2021 federal poverty guidelinesindicates that a household of four earning less than $26,500 is in poverty. At $12.75 for 40 hours a week, 52 weeks a year, an individual would take home $26,520. This calculation does not take into consideration payroll taxes, income taxes, sales taxes, or tax credits.

This report does not discuss potential employment effects of changes to the minimum wage and other policies, which are necessary considerations. A minimum wage increase might be coupled with other policies to ensure its implementation yields a net positive effect in terms of assuring adequate income to people in the United States. The States may also be the best arbiter of what minimum wage each state can economically support. Oregon, for example, has a tiered minimum wage rate based on urban/rural areas.124Oregon Minimum Wage. 2021. Oregon Bureau of Labor and Industries.

Options:

1. Raise the minimum wage. Two current options are to raise the wage to $12.75 an hour, the poverty wage, which is the 52-week, 40-hour per week equivalent of the poverty threshold for a family of four in 2021. The other is to raise the wage to $15.00 an hour to bring the federal floor up to the level of states and cities that are already at $15. Either option could be implemented using a phase-in process to ease the transitional impact on employers.

2. Raise the minimum wage and index it to inflation. Rather than periodically revisit the minimum wage, this policy would increase the wage every year apace with the average change in prices. This method of indexing is used by the IRS, for example, in updating income tax brackets.

3. Raise the minimum wage and index it to the growth in the average or median wage. Wages rise faster than prices; if the minimum wage were linked to inflation, it would not keep pace in terms of purchasing power growth relative to average or median wage growth, much like the poverty threshold which is indexed to inflation. Indexing with reference to the average or median wage is used, for example, in establishing the threshold for Social Security’s insurance contributions (FICA).125Average wages are used to update the threshold for wages subject to FICA. The wage threshold changes every year based on average wage growth. (Social Security Administration, Contribution and Benefit Base)

Improve or eliminate subminimum wages

The minimum wage is currently $7.25 per hour and applies to the majority of employees covered by the Fair Labor Standards Act.126U.S. Department of Labor, Wage and Hour Division. Wages and the Fair Labor Standards Act. The FLSA enumerates, however, types of employees who may be paid at subminimum wage rates.127U.S. Department of Labor, Wage and Hour Division. Subminimum Wage. Some require employers to obtain a certificate granting exception to the FLSA:

  • Workers with disabilities128According to the Department of Labor, “a worker who has disabilities for the job being performed is one whose earning or productive capacity is impaired by a physical or mental disability, including those relating to age or injury. Disabilities which may affect productive capacity include blindness, mental illness, developmental disabilities, cerebral palsy, Alcoholism and drug addiction.” (U.S. Department of Labor, Fact Sheet #39: The Employment of Workers with Disabilities at Subminimum Wages)An investigation into the use of subminimum wage practices for workers with disabilities by the U.S. Commission on Civil Rights found that its use violated the civil rights of workers with disabilities, did not lead to higher employment, and recommended repealing the section of the Fair Labor Standards Act (14(c)) that allows for subminimum wages. (U.S. Commission on Civil Rights, Subminimum Wages: Impacts on the Civil Rights of People with Disabilities)
  • Student workers129Defined as “a student who is at least 16 years of age (or at least 18 years of age if employed in an occupation which the Secretary of Labor has declared to be particularly hazardous), who is receiving instruction in any accredited school, college or university and who is employed by an establishment on a part-time basis, pursuant to a bona fide vocational training program.” (U.S. Department of Labor, Instructions for Form WH-205: Application to Employ Student-Learners at Subminimum Wages)
  • Industrial homeworkers (sometimes called pieceworkers)130The industries in which employers may apply for certificates granting exception include “those that manufacture: women’s apparel; knitted outerwear; gloves and mittens; buttons and buckles; handkerchiefs; embroideries; and jewelry. There are two different types of certificates…” One is for individuals facing circumstances that limit their ability to work outside the home, and the other for employers to employ homeworkers more broadly; this certificate does not apply to the women’s apparel industry. (U.S Department of Labor, Industrial Homeworker)

Workers under 20 years of age can be paid a wage as low as $4.25 an hour for the first 90 calendar days after which they are employed under the Youth Minimum Wage unless state or local laws prohibit the practice.131U.S. Department of Labor, Wage and Hour Division. Fact Sheet #32: Youth Minimum Wage – Fair Labor Standards Act.Minimum wage laws in each state are available at minimum-wage.org.

Certain other workers may be paid less based on type of work or type of industry:

  • tipped workers for whom the federal minimum wage for direct pay is $2.13; 132The minimum wage for tipped employees exceeds $2.13 in all but 15 states. (U.S. Department of Labor, Minimum Wages for Tipped Employees).
  • and some agricultural workers.133All agricultural workers are covered by the federal minimum wage except in cases of “work performed on a farm which is not incidental to or in conjunction with such farmer’s farming operation” … and “operations performed off a farm if performed by employees employed by someone other than the farmer whose agricultural products are being worked on. Other exemptions include:1) Agricultural employees who are immediate family members of their employer; 2) Those principally engaged on the range in the production of livestock; 3) Local hand harvest laborers who commute daily from their permanent residence, are paid on a piece rate basis in traditionally piece-rated occupations, and were engaged in agriculture less than thirteen weeks during the preceding calendar year; and 4) Non-local minors, 16 years of age or under, who are hand harvesters, paid on a piece rate basis in traditionally piece-rated occupations, employed on the same farm as their parent, and paid the same piece rate as those over 16 (U.S. Department of Labor, Fact Sheet #12: Agricultural Employers Under the Fair Labor Standards Act (FLSA)). Only seven states cover agricultural workers in their state’s minimum wage laws. In two of those, such workers have a specified lower wage than other workers. In twenty-three states, some agricultural workers are covered but there are limitations/exceptions. In the remaining twenty states, agricultural workers are either altogether excluded from the state’s minimum wage laws or the state has no minimum wage laws (Farmworker Justice, Wages Map).

In addition, the Fair Labor Standards Act applies only to employees. Though not specified in the legislation, subsequent court rulings have found that incarcerated individuals employed by their jail or prison, or contracted by their jail or prison to another industry, are not employees under the FLSA, and therefore do not have to be paid a minimum wage.134Hale v. Arizona in 1993 ruled that prisoners are not entitled to the minimum wage under the FLSA. (Hale v. Arizona, 993 F.2d 1387 (9th Cir. 1993)). Lynn Gibson of the Government Accountability Office testified on the matter before the Senate Committee on Labor and Human Resources. The most recent estimate puts the average wage of incarcerated individuals at 86 cents per day.135Sources: Prison Policy Initiative. 2017. How Much Do Incarcerated People Earn in Each State? and State and Federal Prison Wage Policies and Sourcing Information. There are several work arrangements that fall outside the employer-employee relationship, such as interns or independent contractors, who are also not subject to the minimum wage. This category includes all gig workers, such as ride-sharing drivers.136The issue of whether ride-share drivers in particular should be treated as employees or independent contractors, and what sorts of benefits the drivers should be entitled to, has come to a head in California. Policy Options:

1. End subminimum wages for workers with disabilities. Seven states have already eliminated, or are in the process of phasing-out subminimum wages for these workers. 137U.S. Commission on Civil Rights. 2020. Subminimum Wages: Impacts on the Civil Rights of People with Disabilities. p. 179.

2. Tie the subminimum wage for tipped workers to 70 percent of the minimum wage.138This proposal was included under Section 2(b) of the H.R. 1010 (113th): Fair Minimum Wage Act of 2013. This policy would keep a two-tiered wage system in effect, but would peg it at a reasonable percentage of the minimum wage.

3. End subminimum wages for all employees. Adopting this option would include subminimum wages currently allowed by the FLSA and would also end the Youth Minimum Wage and the Tipped Minimum Wage.

4. Reform wages for incarcerated persons. The goal of such reform would make work performed by incarcerated workers subject to a higher minimum wage.

5. Require companies that pay independent contractors to provide proof that each contractor earned at least the minimum wage.

Update overtime and work scheduling rules

The Fair Labor Standards Act establishes a 40-hour workweek and requires that any additional hours of work be paid at overtime rates defined as 1.5 times the usual wage.139U.S. Department of Labor, Wage and Hour Division. Overtime Pay.

Workers earning above a certain wage are exempt from overtime provisions and may be paid a flat salary regardless of how many hours they work. The current exempt salary is $684 per week, or $35,568 per year.140U.S. Department of Labor, Wage and Hour Division. Fact Sheet #17G: Salary Basis Requirement and the Part 541 Exemptions Under the Fair Labor Standards Act (FLSA) These dollar amounts were arrived at using wage percentiles with $35,568 being the 20th percentile of earnings of salaried workers in the lowest earning Census regions. 141Specifically, “Using pooled 2018/2019 [Current Population Survey–Merged Outgoing Rotation Group Earnings] data to represent the July 2018 through June 2019 period, a salary level of $684 corresponds to the 20th percentile of earnings for full-time salaried workers in the South Census Region and/or in the retail industry.”The same rules are related to the overtime threshold for highly compensated employees, which is currently $107,432 per year using data for the 80th percentile of weekly, full-time salary workers nationally. This exempts employees who are highly compensated annually, but who do not receive a consistent salary. (U.S. Department of Labor, Highlights of the Final Rule on Overtime Eligibility for White Collar Employees)

Additional aspects of worker hours, besides total length, have emerged as issues in recent years. Some employers use just-in-time scheduling or call-in scheduling, where workers are notified of the hours of their shift on short notice, including the morning of.142Lambert et al. 2019 explores the extent to which U.S. workers deal with precarious work schedules, and how such work schedules contribute to economic insecurity. In a 2020 essay, Lambert lays out the “dimensions of problematic work schedules,” evidence from states that have taken action, and how better scheduling benefits both employers and employees in the long run. Harknett et al. 2021 inspected the impacts of Seattle’s Secure Scheduling Ordinance in the second year after its implementation and found “increased work schedule stability and predictability, 2) increased job satisfaction and satisfaction with work schedules, 3) increased overall happiness and sleep quality, and 4) reduced material hardship” for Seattle workers. From the employer perspective, Kamalahmadi et al. 2019 find that day-of scheduling reduces both worker productivity and profit levels in the restaurant industry. The Center for Popular Democracy outlines the goals of “The Fair Workweek Initiative”. Certain states and localities have passed regulations that require a minimum advance notice of shifts in “good faith” in certain industries, after which the shift may not be canceled without pay or penalty.143Oregon, for example, requires that employers notify employees at least fourteen days in advance of their shift (or their “on-call” shift). (Oregon Bureau of Labor & Industries. Predictive Scheduling) Some employers also do not have any regulation regarding time in between shifts. Certain states and localities have thus passed a minimum shift time rule that requires a minimum amount of time off between shifts spanning two calendar days.144In New York City, for example, fast food workers must “consent in writing before being scheduled to work or working two shifts over two calendar days when the first shift ends a day and there are less than 11 hours between shifts.” For such shifts, employers must pay the employees a $100 premium. (NYC Department of Consumer and Worker Protection, Fair Workweek Law: Frequently Asked Questions). Addressing these issues has been broadly dubbed Fair Workweek laws.145Wykstra 2019 offers an overview of the breadth and goals of Fair Workweek laws

Options:

1. Index the salary thresholds for overtime-exempt status to growth in the average or median wage. This policy would increase the salary thresholds every year rather than intermittently. Indexing the exempt status to wages, rather than prices, is used, for example, in establishing the threshold for Social Security’s insurance contributions.146Average wages are used to update the threshold for wages subject to FICA. The wage threshold changes every year based on average wage growth (Social Security Administration, Contribution and Benefit Base).

2. Raise the salary threshold for overtime-exempt status and index it to the growth in the average or median wage. Rather than use the current 20th percentile salary for the lowest earning region, use the 25th percentile nationwide. Regional, statewide, or citywide metrics would ensure that overtime exemption levels are commensurate to local costs-of-living.

3. Explore the need for a commission in the U.S. Department of Labor to study existing state and local Fair Workweek Laws and make federal recommendations for adoption. Given the policy experimentation at the state and local level and its recency, this policy would give the Department of Labor a fixed window to assess those policies.

4. Explore options to provide better predictability for workers. When workers are asked to work without sufficient notice, this option would entitle them to increased pay. The window of sufficient notice and amount of pay increase vary. Options, such as some number of days required notice and/or extra compensation, should be evaluated.147National Women’s Law Center. 2019. State and Local Laws Advancing Fair Work Schedules.

Update wage and hiring rules

The majority of states have put in place rules that limit the information employers may collect from prospective workers during the application process because some information might be used to discriminate in hiring decisions or regarding salary once hired.

Options:

1. Prohibit the requirement that applicants must disclose prior criminal records during the job application process. This prohibition is commonly referred to as Ban the Box 148See Remove Barriers to Opportunity for People with Criminal Records under Equity policy for more details. or fair chance hiring and is in place in 36 states. 149Avery, Beth, and Han Lu. 2020. Ban the Box: U.S. Cities, Counties, and States Adopt Fair Hiring Policies. , 150Washington, DC, enacted ban the box legislation with the Fair Criminal Record Screening Amendment Act of 2014. The law prohibits employers with eleven or more employees “from asking job applicants about: arrests; criminal accusations made against the applicant that are not pending or did not result in a conviction; or criminal convictions. However, an employer may ask about criminal conviction(s) after extending a conditional offer of employment (the employer can never ask about arrests or criminal accusations that aren’t pending). An employer who properly asks about a criminal conviction can only withdraw the offer or take adverse action against the applicant for a legitimate business reason that is reasonable under the six factors listed in the Act” (DC.gov Office of Human Rights, Returning Citizens and Employment). Stacy and Cohen 2017 review the impacts of DC’s legislation, and discuss improvements, including stronger equal employment legislation and enforcement, provision of training for employers, better outreach to those with criminal records, and others. As of 2019, 89 percent of employers used county/statewide criminal background searches in the hiring process, and 85 percent used national criminal searches.151National Association of Professional Background Screeners. 2019. How Human Resources Professionals View and Use Background Screening in Employment.

2. Prohibit the requirement that applicants must disclose prior salary or pay information during the job application and salary negotiation process. Commonly referred to as a salary history ban, this prohibition is in place in 19 states.152H.R. Dive. 2020. Salary History Bans. A recent study finds that salary history bans substantially increase pay for both female and Black workers.153Bessen, James E., Chen Meng, and Erich Denk. 2020. Perpetuating Inequality: What Salary History Bans Reveal About Wages. SSRN.The authors discuss their findings here.

Improve labor law enforcement

The four federal primary bodies for enforcing laws related to the labor market are the Wage and Hour Division (WHD) and the Occupational Health and Safety Administration (OSHA) in the Department of Labor, the Equal Employment Opportunity Commission (EEOC), and the National Labor Relations Board (NLRB).

Options:

1. Increase staffing and funding at the labor regulatory bodies: WHD, OSHA, EEOC, NLRB. Any update to labor law regulations should be accompanied by a commensurate update to labor law enforcement capabilities. A recent piece by the Washington Center for Equitable Growth states that, for example, As of May 1, 2020, the [WHD] employed 779 investigators to protect more than 143 million workers, which is fewer than the 1,000 investigators it employed back in 1948 when it was only responsible for safeguarding the rights of 22.6 million workers [T]he International Labor Organization recommends a benchmark of one investigator per 10,000 workers, which would require roughly 13,500 more investigators to be hired.154Washington Center for Equitable Growth. 2021. Executive Action to Combat Wage Theft Against U.S. workers. This piece also outlines how the WHD might “prioritize strategic enforcement” to increase the perceived cost of labor law violations and “pursue co-enforcement with community-based organizations” to help uncover violations in industries where workers fear retribution for speaking up.

2. Review procedures for reporting workplace complaints at all four agencies and make recommendations for improvement. One of the agencies (WHD) does not allow for online submission of complaints, only phone calls, which can be difficult to place during the workday. Another (OSHA) has been subject to inspector general investigations about not following up on whistleblower complaints about workplace safety during the pandemic in a timely manner.155The full report of the Office of the Inspector General can be found here. A commission would evaluate both the worker-facing aspect of the agencies in collecting complaints as well as their performance in following up on them.

3. Make it easier for workers to choose to be represented by a union. The National Labor Relations Act establishes the right for workers to unionize. Limitations on forming unions have threatened this right.

Twenty-eight states, for instance, have Right to Work laws, which do not allow for compulsory membership in a union as a condition of employment. On the one hand, this means non-union members receive any benefit from a unionized workplace without paying dues toward the union. On the other hand, right to work laws ensure that workers who do not want to join a union are not forced to do so.156Workplace Fairness. Right to Work Laws. Employees deserve both the right to unionize and to not belong to a union should they choose. Policies to increase union representation range from increasing enforcement to preventing employer retaliation157Laufer and Loustaunau 2020document how U.S. employers engage in anti-unionization activities, from mandatory anti-union meetings to threats of job loss. They find that U.S. employers “collectively spend $340 million per year on ‘union avoidance’ consultants who teach them how to exploit the weaknesses of federal labor law to effectively scare workers out of exercising their legal right to collective bargaining.” to encouraging sectoral bargaining models.158“Sectoral bargaining—also known as multiemployer, industrywide, or broad-based bargaining—is a form of collective bargaining that provides contract coverage and sets compensation floors for most workers in a particular occupation, industry, or region” (Center for American Progress, What is Sectoral Bargaining?).

Provide support for unemployed workers

The primary means of providing financial support for workers who are looking for a job is Unemployment Insurance,159Woodbury 2014 provides an overview of U.S. unemployment insurance programs, as do Whittaker and Isaacs 2019. the state-administered program for workers who have worked previously, lost their job through no fault of their own, and continue to search for work. State workforce agencies and the U.S. Department of Labor (DOL) administer this program. Workers without a sufficient work history, including all new workers, are not eligible for Unemployment Insurance.

The Workforce Innovation and Opportunity Act (WIOA) is the primary vehicle for funding programs and supports to facilitate the development of the U.S. workforce, including through re-employment. Of WIOA’s many programs, a transitional job program is one intended for workers without a job. Transitional job programs provide temporary, wage-paying jobs, support services, and job placement help to individuals who have difficulty getting and holding jobs in the regular labor market.160Bloom 2010 discusses existing evidence around transitional jobs programs, goals for transitional jobs programs, and the testing of new strategies in transitional jobs programs.

Yahner and Zweig 2012 inspect which components of transitional jobs programs have the most impact in terms of positive employment and nonrecidivism for participants. The duration of one’s transitional job is the component that has the greatest impact on one’s likelihood of receiving unsubsidized employment following the transitional job. Those “who spent 30 workdays or more in a transitional job during the first six months of the follow-up period (at a rate of four workdays per week, which equates to two months of time) were 14 [percentage points] more likely than other TJ program participants to obtain an unsubsidized job in the subsequent six months (45% vs. 31%; see Figure 1, Model A).”

Barden et al. 2018 discuss the findings of the Enhanced Transitional Jobs Demonstration, which “tested seven transitional jobs programs that targeted people recently released from prison or low-income parents who had fallen behind in child support payments,” and tracked participants’ outcomes over thirty months following their enrollment in the programs. On average, those in the programs earned $700 more than the control group in the final year of the study and saw an employment rate of 64 percent compared to 60 percent in the control group in the final year.
The DOL-funded transitional jobs programs are currently only available to hard-to-employ populations, like formerly incarcerated individuals or those who experience disasters, mass layoffs, plant closing, or other events that precipitate substantial increases in the number of unemployed individuals.161Section 134 (a)(2)(A)(i)(II) of the Workforce Innovation and Opportunity Act, Public Law113–128—July 22, 2014, 128 STAT. 1520, 29 USC 3174.

Options:

1. Create a Job Seekers’ Allowance. Current support for unemployed jobseekers on Unemployment Insurance extends only to workers who were employed sufficiently in the past to qualify for UI benefits and were laid off. A new Job Seekers Allowance would provide a cash stipend for unemployed workers who either do not have a work history sufficient to receive UI benefits, or who have exhausted their UI benefits, while they actively seek paying jobs.162This sort of program is modeled after the United Kingdom’s Jobseeker’s AllowanceStrengthening Unemployment Protections in America outlines the creation of jobseeker’s allowance in the U.S., who such a program would target, and how it might be implemented (West et al. 2016).

2. Increase access to transitional jobs. The current program only provides transitional jobs to unemployed workers in certain situations. Funding is also insufficient to offer paid employment to the millions of unemployed and underemployed U.S. adults who, especially during periods of high unemployment, are unable to obtain paying jobs in the regular labor market. The transitional jobs program might be expanded, both in eligibility and resources, to be made available for any individual in need of work or experience.163Federal legislation to carry this option out was introduced in 2021 as the “Jobs for Economic Recovery Act” by Danny Davis (D-IL) in the House and by Ron Wyden (D-OR) in the Senate.

3. Increase funding and opportunities for job training. The primary legislation for directing funding to worker training is the Workforce Innovation and Opportunity Act (WIOA). WIOA funds a variety of programs, including Job Corps164“Job Corps is the largest nationwide residential career training program in the country and has been operating for more than 50 years. The program helps eligible young people ages 16 through 24 complete their high school education, trains them for meaningful careers, and assists them with obtaining employment. Job Corps has trained and educated over two million individuals since 1964” (What Is Job Corps, U.S. Department of Labor)., to train workers, primarily those who meet specific qualifications of need.165The Workforce Innovation and Opportunity Act and the One-Stop Delivery System outlines the many avenues through which WIOA funds workforce development activities (Bradley 2015, Congressional Research Service). Larger investments in Career and Technical Education (CTE)166CTE, also known as vocational education, focuses on equipping students with skills that translate more directly to the labor market. Catherine Gewertz discusses CTE in Education WeekBrunner et al. 2019 state that there is “increasing evidence that high-quality CTE programs in high school are actually complements—they can improve high school completion, employment, and earnings, all while not sacrificing general learning outcomes.” Their research found a 10 percentage point increase in graduation rates and a 30 percent increase in quarterly earnings for participants in CTE high schools in Connecticut, though all positive impacts accrued to males. and job training may improve the ability of the U.S. workforce to adapt to an evolving labor market, and in doing so improve wages and worker outcomes.

  • 116
    U.S. Department of Labor, Wage and Hour Division. History of Changes to the Minimum Wage Law.
  • 117
    At full-time work (40 hours per week, 52 weeks per year), a minimum wage worker earning the federal minimum wage earns $15,080 annually. Had the minimum wage increased with inflation (CPI-U) since January 2009, it would have been $8.86 as of January 2021($18,429 annually). Had it increased with median weekly earnings since the first quarter of 2009, it would have been $9.74 as of the fourth quarter of 2019 ($20,259 annually). Had it increased with average hourly earnings in the private sector since January 2009, it would have been $9.88 as of January 2021 ($20,550 annually) (1/2021 data preliminary at time of extraction).
  • 118
    U.S. Department of Labor, Wage and Hour Division. 2021. Consolidated Minimum Wage Table.
  • 119
  • 120
    In 2014, SeaTac became the first city in the United States to institute a $15 minimum wage as a result of employers at SeaTac playing “hardball” during union negotiations. As leverage, union organizer David Rolf put a $15 minimum wage on the city ballot. Much to his surprise, it passed, and since then many other cities, counties, and states have followed suit (Bergman, 2015).
  • 121
    The National Law Review. 2020. Florida Minimum Wage To Increase. Volume X, Number 366.
  • 122
    Bureau of Labor Statistics. 2020. Characteristics of minimum wage workers, 2019.
  • 123
    The 2021 federal poverty guidelinesindicates that a household of four earning less than $26,500 is in poverty. At $12.75 for 40 hours a week, 52 weeks a year, an individual would take home $26,520. This calculation does not take into consideration payroll taxes, income taxes, sales taxes, or tax credits.
  • 124
    Oregon Minimum Wage. 2021. Oregon Bureau of Labor and Industries.
  • 125
    Average wages are used to update the threshold for wages subject to FICA. The wage threshold changes every year based on average wage growth. (Social Security Administration, Contribution and Benefit Base)
  • 126
    U.S. Department of Labor, Wage and Hour Division. Wages and the Fair Labor Standards Act.
  • 127
    U.S. Department of Labor, Wage and Hour Division. Subminimum Wage.
  • 128
    According to the Department of Labor, “a worker who has disabilities for the job being performed is one whose earning or productive capacity is impaired by a physical or mental disability, including those relating to age or injury. Disabilities which may affect productive capacity include blindness, mental illness, developmental disabilities, cerebral palsy, Alcoholism and drug addiction.” (U.S. Department of Labor, Fact Sheet #39: The Employment of Workers with Disabilities at Subminimum Wages)An investigation into the use of subminimum wage practices for workers with disabilities by the U.S. Commission on Civil Rights found that its use violated the civil rights of workers with disabilities, did not lead to higher employment, and recommended repealing the section of the Fair Labor Standards Act (14(c)) that allows for subminimum wages. (U.S. Commission on Civil Rights, Subminimum Wages: Impacts on the Civil Rights of People with Disabilities)
  • 129
    Defined as “a student who is at least 16 years of age (or at least 18 years of age if employed in an occupation which the Secretary of Labor has declared to be particularly hazardous), who is receiving instruction in any accredited school, college or university and who is employed by an establishment on a part-time basis, pursuant to a bona fide vocational training program.” (U.S. Department of Labor, Instructions for Form WH-205: Application to Employ Student-Learners at Subminimum Wages)
  • 130
    The industries in which employers may apply for certificates granting exception include “those that manufacture: women’s apparel; knitted outerwear; gloves and mittens; buttons and buckles; handkerchiefs; embroideries; and jewelry. There are two different types of certificates…” One is for individuals facing circumstances that limit their ability to work outside the home, and the other for employers to employ homeworkers more broadly; this certificate does not apply to the women’s apparel industry. (U.S Department of Labor, Industrial Homeworker)
  • 131
    U.S. Department of Labor, Wage and Hour Division. Fact Sheet #32: Youth Minimum Wage – Fair Labor Standards Act.Minimum wage laws in each state are available at minimum-wage.org.
  • 132
    The minimum wage for tipped employees exceeds $2.13 in all but 15 states. (U.S. Department of Labor, Minimum Wages for Tipped Employees).
  • 133
    All agricultural workers are covered by the federal minimum wage except in cases of “work performed on a farm which is not incidental to or in conjunction with such farmer’s farming operation” … and “operations performed off a farm if performed by employees employed by someone other than the farmer whose agricultural products are being worked on. Other exemptions include:1) Agricultural employees who are immediate family members of their employer; 2) Those principally engaged on the range in the production of livestock; 3) Local hand harvest laborers who commute daily from their permanent residence, are paid on a piece rate basis in traditionally piece-rated occupations, and were engaged in agriculture less than thirteen weeks during the preceding calendar year; and 4) Non-local minors, 16 years of age or under, who are hand harvesters, paid on a piece rate basis in traditionally piece-rated occupations, employed on the same farm as their parent, and paid the same piece rate as those over 16 (U.S. Department of Labor, Fact Sheet #12: Agricultural Employers Under the Fair Labor Standards Act (FLSA)). Only seven states cover agricultural workers in their state’s minimum wage laws. In two of those, such workers have a specified lower wage than other workers. In twenty-three states, some agricultural workers are covered but there are limitations/exceptions. In the remaining twenty states, agricultural workers are either altogether excluded from the state’s minimum wage laws or the state has no minimum wage laws (Farmworker Justice, Wages Map).
  • 134
    Hale v. Arizona in 1993 ruled that prisoners are not entitled to the minimum wage under the FLSA. (Hale v. Arizona, 993 F.2d 1387 (9th Cir. 1993)). Lynn Gibson of the Government Accountability Office testified on the matter before the Senate Committee on Labor and Human Resources.
  • 135
  • 136
    The issue of whether ride-share drivers in particular should be treated as employees or independent contractors, and what sorts of benefits the drivers should be entitled to, has come to a head in California.
  • 137
  • 138
    This proposal was included under Section 2(b) of the H.R. 1010 (113th): Fair Minimum Wage Act of 2013.
  • 139
    U.S. Department of Labor, Wage and Hour Division. Overtime Pay.
  • 140
  • 141
    Specifically, “Using pooled 2018/2019 [Current Population Survey–Merged Outgoing Rotation Group Earnings] data to represent the July 2018 through June 2019 period, a salary level of $684 corresponds to the 20th percentile of earnings for full-time salaried workers in the South Census Region and/or in the retail industry.”The same rules are related to the overtime threshold for highly compensated employees, which is currently $107,432 per year using data for the 80th percentile of weekly, full-time salary workers nationally. This exempts employees who are highly compensated annually, but who do not receive a consistent salary. (U.S. Department of Labor, Highlights of the Final Rule on Overtime Eligibility for White Collar Employees)
  • 142
    Lambert et al. 2019 explores the extent to which U.S. workers deal with precarious work schedules, and how such work schedules contribute to economic insecurity. In a 2020 essay, Lambert lays out the “dimensions of problematic work schedules,” evidence from states that have taken action, and how better scheduling benefits both employers and employees in the long run. Harknett et al. 2021 inspected the impacts of Seattle’s Secure Scheduling Ordinance in the second year after its implementation and found “increased work schedule stability and predictability, 2) increased job satisfaction and satisfaction with work schedules, 3) increased overall happiness and sleep quality, and 4) reduced material hardship” for Seattle workers. From the employer perspective, Kamalahmadi et al. 2019 find that day-of scheduling reduces both worker productivity and profit levels in the restaurant industry. The Center for Popular Democracy outlines the goals of “The Fair Workweek Initiative”.
  • 143
    Oregon, for example, requires that employers notify employees at least fourteen days in advance of their shift (or their “on-call” shift). (Oregon Bureau of Labor & Industries. Predictive Scheduling)
  • 144
    In New York City, for example, fast food workers must “consent in writing before being scheduled to work or working two shifts over two calendar days when the first shift ends a day and there are less than 11 hours between shifts.” For such shifts, employers must pay the employees a $100 premium. (NYC Department of Consumer and Worker Protection, Fair Workweek Law: Frequently Asked Questions).
  • 145
    Wykstra 2019 offers an overview of the breadth and goals of Fair Workweek laws
  • 146
    Average wages are used to update the threshold for wages subject to FICA. The wage threshold changes every year based on average wage growth (Social Security Administration, Contribution and Benefit Base).
  • 147
    National Women’s Law Center. 2019. State and Local Laws Advancing Fair Work Schedules.
  • 148
    See Remove Barriers to Opportunity for People with Criminal Records under Equity policy for more details.
  • 149
  • 150
    Washington, DC, enacted ban the box legislation with the Fair Criminal Record Screening Amendment Act of 2014. The law prohibits employers with eleven or more employees “from asking job applicants about: arrests; criminal accusations made against the applicant that are not pending or did not result in a conviction; or criminal convictions. However, an employer may ask about criminal conviction(s) after extending a conditional offer of employment (the employer can never ask about arrests or criminal accusations that aren’t pending). An employer who properly asks about a criminal conviction can only withdraw the offer or take adverse action against the applicant for a legitimate business reason that is reasonable under the six factors listed in the Act” (DC.gov Office of Human Rights, Returning Citizens and Employment). Stacy and Cohen 2017 review the impacts of DC’s legislation, and discuss improvements, including stronger equal employment legislation and enforcement, provision of training for employers, better outreach to those with criminal records, and others.
  • 151
    National Association of Professional Background Screeners. 2019. How Human Resources Professionals View and Use Background Screening in Employment.
  • 152
    H.R. Dive. 2020. Salary History Bans.
  • 153
    Bessen, James E., Chen Meng, and Erich Denk. 2020. Perpetuating Inequality: What Salary History Bans Reveal About Wages. SSRN.The authors discuss their findings here.
  • 154
    Washington Center for Equitable Growth. 2021. Executive Action to Combat Wage Theft Against U.S. workers. This piece also outlines how the WHD might “prioritize strategic enforcement” to increase the perceived cost of labor law violations and “pursue co-enforcement with community-based organizations” to help uncover violations in industries where workers fear retribution for speaking up.
  • 155
    The full report of the Office of the Inspector General can be found here.
  • 156
    Workplace Fairness. Right to Work Laws.
  • 157
    Laufer and Loustaunau 2020document how U.S. employers engage in anti-unionization activities, from mandatory anti-union meetings to threats of job loss. They find that U.S. employers “collectively spend $340 million per year on ‘union avoidance’ consultants who teach them how to exploit the weaknesses of federal labor law to effectively scare workers out of exercising their legal right to collective bargaining.”
  • 158
    “Sectoral bargaining—also known as multiemployer, industrywide, or broad-based bargaining—is a form of collective bargaining that provides contract coverage and sets compensation floors for most workers in a particular occupation, industry, or region” (Center for American Progress, What is Sectoral Bargaining?).
  • 159
    Woodbury 2014 provides an overview of U.S. unemployment insurance programs, as do Whittaker and Isaacs 2019.
  • 160
    Bloom 2010 discusses existing evidence around transitional jobs programs, goals for transitional jobs programs, and the testing of new strategies in transitional jobs programs.

    Yahner and Zweig 2012 inspect which components of transitional jobs programs have the most impact in terms of positive employment and nonrecidivism for participants. The duration of one’s transitional job is the component that has the greatest impact on one’s likelihood of receiving unsubsidized employment following the transitional job. Those “who spent 30 workdays or more in a transitional job during the first six months of the follow-up period (at a rate of four workdays per week, which equates to two months of time) were 14 [percentage points] more likely than other TJ program participants to obtain an unsubsidized job in the subsequent six months (45% vs. 31%; see Figure 1, Model A).”

    Barden et al. 2018 discuss the findings of the Enhanced Transitional Jobs Demonstration, which “tested seven transitional jobs programs that targeted people recently released from prison or low-income parents who had fallen behind in child support payments,” and tracked participants’ outcomes over thirty months following their enrollment in the programs. On average, those in the programs earned $700 more than the control group in the final year of the study and saw an employment rate of 64 percent compared to 60 percent in the control group in the final year.
  • 161
    Section 134 (a)(2)(A)(i)(II) of the Workforce Innovation and Opportunity Act, Public Law113–128—July 22, 2014, 128 STAT. 1520, 29 USC 3174.
  • 162
    This sort of program is modeled after the United Kingdom’s Jobseeker’s AllowanceStrengthening Unemployment Protections in America outlines the creation of jobseeker’s allowance in the U.S., who such a program would target, and how it might be implemented (West et al. 2016).
  • 163
    Federal legislation to carry this option out was introduced in 2021 as the “Jobs for Economic Recovery Act” by Danny Davis (D-IL) in the House and by Ron Wyden (D-OR) in the Senate.
  • 164
    “Job Corps is the largest nationwide residential career training program in the country and has been operating for more than 50 years. The program helps eligible young people ages 16 through 24 complete their high school education, trains them for meaningful careers, and assists them with obtaining employment. Job Corps has trained and educated over two million individuals since 1964” (What Is Job Corps, U.S. Department of Labor).
  • 165
    The Workforce Innovation and Opportunity Act and the One-Stop Delivery System outlines the many avenues through which WIOA funds workforce development activities (Bradley 2015, Congressional Research Service).
  • 166
    CTE, also known as vocational education, focuses on equipping students with skills that translate more directly to the labor market. Catherine Gewertz discusses CTE in Education WeekBrunner et al. 2019 state that there is “increasing evidence that high-quality CTE programs in high school are actually complements—they can improve high school completion, employment, and earnings, all while not sacrificing general learning outcomes.” Their research found a 10 percentage point increase in graduation rates and a 30 percent increase in quarterly earnings for participants in CTE high schools in Connecticut, though all positive impacts accrued to males.

Labor Policy

Labor policy to address economic insecurity has three goals. First, government policy should help people achieve the education and skills they need to be successful in the workplace. Second, anyone who works should be compensated fairly. Third, working conditions should be safe and reasonable.

While these goals might garner broad support, when and how they might be achieved are highly contentious. Broad agreement on what policies would achieve these goals does not always exist. The U.S. has traditionally approached these three goals through supporting education, the regulation of wages, work-related benefits, and working conditions.

Policy Options
Raise the minimum wage 1. Raise the minimum wage.

2. Raise the minimum wage and index it to inflation.

3. Raise the minimum wage and index it to the growth in the average or median wage.

Improve or eliminate subminimum wages
← → Equity Policy
1. End subminimum wages for workers with disabilities.

2. Tie the subminimum wage for tipped workers to 70 percent of the minimum wage.

3. End subminimum wages for all employees.

4. Reform wages for incarcerated persons.

5. Require companies that pay independent contractors to provide proof that each contractor earned at least the minimum wage.

Update overtime and work scheduling rules 1. Index the salary thresholds for overtime-exempt status to the growth in the average or median wage.

2. Raise the salary threshold for overtime-exempt status and index it to the growth in the average or median wage.

3. Explore the need for a commission in the U.S. Department of Labor to study existing state and local Fair Workweek Laws and make federal recommendations for adoption.

4. Explore options to provide better predictability for workers.

Update wage and hiring rules
← → Equity Policy
1. Prohibit the requirement that applicants must disclose prior criminal records during the job application process.

2. Prohibit the requirement that applicants must disclose prior salary or pay information during the job application and salary negotiation process.

Improve labor law enforcement
← → Equity Policy
1. Increase staffing and funding of the labor regulatory bodies: Wage and Hour Division, Occupational Safety and Health Administration, Equal Employment Opportunity Commission, and National Labor Relations Board.

2. Review procedures for reporting workplace complaints at all four agencies and make recommendations for improvement.

3. Make it easier for workers to choose to be represented by a union.

Provide support for unemployed workers 1. Create a Job Seekers’ Allowance.

2. Increase access to transitional jobs programs.

3. Increase funding and opportunities for job training.

Reform Unemployment Insurance (UI)
← → Benefit Policy
1. Implement federal standards for benefit levels, eligibility requirements, state tax rates, and state tax bases.

2. Overhaul the data reporting architecture and create new performance measures for states regarding benefit levels, eligibility, and receipt rates.

3. Explore the cost and benefits of fully federalizing the UI tax and benefit system.

4. Bring independent contractors and self-employed permanently into the UI system.

5. Short-Time Compensation included in every UI system.

← → This symbol appears throughout the Policy Options tables in cases where a policy fits well under multiple pillars.

Raise the minimum wage

The federal minimum wage is currently $7.25 per hour. It was last raised in 2007 and increased over a three-year period to its current level in 2009.116U.S. Department of Labor, Wage and Hour Division. History of Changes to the Minimum Wage Law. This phase-in gave employers time to adjust. Since this phase-in, Congress has enacted no increases or automatic adjustments to keep pace with rising costs-of-living.117At full-time work (40 hours per week, 52 weeks per year), a minimum wage worker earning the federal minimum wage earns $15,080 annually. Had the minimum wage increased with inflation (CPI-U) since January 2009, it would have been $8.86 as of January 2021($18,429 annually). Had it increased with median weekly earnings since the first quarter of 2009, it would have been $9.74 as of the fourth quarter of 2019 ($20,259 annually). Had it increased with average hourly earnings in the private sector since January 2009, it would have been $9.88 as of January 2021 ($20,550 annually) (1/2021 data preliminary at time of extraction).

In 29118U.S. Department of Labor, Wage and Hour Division. 2021. Consolidated Minimum Wage Table. states and 53119UC Berkeley Labor Center. 2020. Inventory of US City and County Minimum Wage Ordinances. cities and counties, the minimum wage is higher than the federal minimum. The labor movement has galvanized around the Fight for $15 since 2014.120In 2014, SeaTac became the first city in the United States to institute a $15 minimum wage as a result of employers at SeaTac playing “hardball” during union negotiations. As leverage, union organizer David Rolf put a $15 minimum wage on the city ballot. Much to his surprise, it passed, and since then many other cities, counties, and states have followed suit (Bergman, 2015). In 2020, Florida became the most recent state to act when 61 percent of voters supported a referendum to raise the minimum wage to $15 per hour by October of 2026; its minimum wage is slated to rise from $8.65 to $10.00 in October 2021, and by $1.00 per year each October until 2026.121The National Law Review. 2020. Florida Minimum Wage To Increase. Volume X, Number 366.

In 2020, 329,000 U.S. workers earned the federal minimum of $7.25 an hour and 1.2 million earned less than that amount, comprising 1.9 percent of all hourly-paid employees.122Bureau of Labor Statistics. 2020. Characteristics of minimum wage workers, 2019. For a household of four with one full-time worker to earn an above-poverty income in 2021, the minimum wage would have to be $12.75 an hour.123The 2021 federal poverty guidelinesindicates that a household of four earning less than $26,500 is in poverty. At $12.75 for 40 hours a week, 52 weeks a year, an individual would take home $26,520. This calculation does not take into consideration payroll taxes, income taxes, sales taxes, or tax credits.

This report does not discuss potential employment effects of changes to the minimum wage and other policies, which are necessary considerations. A minimum wage increase might be coupled with other policies to ensure its implementation yields a net positive effect in terms of assuring adequate income to people in the United States. The States may also be the best arbiter of what minimum wage each state can economically support. Oregon, for example, has a tiered minimum wage rate based on urban/rural areas.124Oregon Minimum Wage. 2021. Oregon Bureau of Labor and Industries.

Options:

1. Raise the minimum wage. Two current options are to raise the wage to $12.75 an hour, the poverty wage, which is the 52-week, 40-hour per week equivalent of the poverty threshold for a family of four in 2021. The other is to raise the wage to $15.00 an hour to bring the federal floor up to the level of states and cities that are already at $15. Either option could be implemented using a phase-in process to ease the transitional impact on employers.

2. Raise the minimum wage and index it to inflation. Rather than periodically revisit the minimum wage, this policy would increase the wage every year apace with the average change in prices. This method of indexing is used by the IRS, for example, in updating income tax brackets.

3. Raise the minimum wage and index it to the growth in the average or median wage. Wages rise faster than prices; if the minimum wage were linked to inflation, it would not keep pace in terms of purchasing power growth relative to average or median wage growth, much like the poverty threshold which is indexed to inflation. Indexing with reference to the average or median wage is used, for example, in establishing the threshold for Social Security’s insurance contributions (FICA).125Average wages are used to update the threshold for wages subject to FICA. The wage threshold changes every year based on average wage growth. (Social Security Administration, Contribution and Benefit Base)

Improve or eliminate subminimum wages

The minimum wage is currently $7.25 per hour and applies to the majority of employees covered by the Fair Labor Standards Act.126U.S. Department of Labor, Wage and Hour Division. Wages and the Fair Labor Standards Act. The FLSA enumerates, however, types of employees who may be paid at subminimum wage rates.127U.S. Department of Labor, Wage and Hour Division. Subminimum Wage. Some require employers to obtain a certificate granting exception to the FLSA:

  • Workers with disabilities128According to the Department of Labor, “a worker who has disabilities for the job being performed is one whose earning or productive capacity is impaired by a physical or mental disability, including those relating to age or injury. Disabilities which may affect productive capacity include blindness, mental illness, developmental disabilities, cerebral palsy, Alcoholism and drug addiction.” (U.S. Department of Labor, Fact Sheet #39: The Employment of Workers with Disabilities at Subminimum Wages)An investigation into the use of subminimum wage practices for workers with disabilities by the U.S. Commission on Civil Rights found that its use violated the civil rights of workers with disabilities, did not lead to higher employment, and recommended repealing the section of the Fair Labor Standards Act (14(c)) that allows for subminimum wages. (U.S. Commission on Civil Rights, Subminimum Wages: Impacts on the Civil Rights of People with Disabilities)
  • Student workers129Defined as “a student who is at least 16 years of age (or at least 18 years of age if employed in an occupation which the Secretary of Labor has declared to be particularly hazardous), who is receiving instruction in any accredited school, college or university and who is employed by an establishment on a part-time basis, pursuant to a bona fide vocational training program.” (U.S. Department of Labor, Instructions for Form WH-205: Application to Employ Student-Learners at Subminimum Wages)
  • Industrial homeworkers (sometimes called pieceworkers)130The industries in which employers may apply for certificates granting exception include “those that manufacture: women’s apparel; knitted outerwear; gloves and mittens; buttons and buckles; handkerchiefs; embroideries; and jewelry. There are two different types of certificates…” One is for individuals facing circumstances that limit their ability to work outside the home, and the other for employers to employ homeworkers more broadly; this certificate does not apply to the women’s apparel industry. (U.S Department of Labor, Industrial Homeworker)

Workers under 20 years of age can be paid a wage as low as $4.25 an hour for the first 90 calendar days after which they are employed under the Youth Minimum Wage unless state or local laws prohibit the practice.131U.S. Department of Labor, Wage and Hour Division. Fact Sheet #32: Youth Minimum Wage – Fair Labor Standards Act.Minimum wage laws in each state are available at minimum-wage.org.

Certain other workers may be paid less based on type of work or type of industry:

  • tipped workers for whom the federal minimum wage for direct pay is $2.13; 132The minimum wage for tipped employees exceeds $2.13 in all but 15 states. (U.S. Department of Labor, Minimum Wages for Tipped Employees).
  • and some agricultural workers.133All agricultural workers are covered by the federal minimum wage except in cases of “work performed on a farm which is not incidental to or in conjunction with such farmer’s farming operation” … and “operations performed off a farm if performed by employees employed by someone other than the farmer whose agricultural products are being worked on. Other exemptions include:1) Agricultural employees who are immediate family members of their employer; 2) Those principally engaged on the range in the production of livestock; 3) Local hand harvest laborers who commute daily from their permanent residence, are paid on a piece rate basis in traditionally piece-rated occupations, and were engaged in agriculture less than thirteen weeks during the preceding calendar year; and 4) Non-local minors, 16 years of age or under, who are hand harvesters, paid on a piece rate basis in traditionally piece-rated occupations, employed on the same farm as their parent, and paid the same piece rate as those over 16 (U.S. Department of Labor, Fact Sheet #12: Agricultural Employers Under the Fair Labor Standards Act (FLSA)). Only seven states cover agricultural workers in their state’s minimum wage laws. In two of those, such workers have a specified lower wage than other workers. In twenty-three states, some agricultural workers are covered but there are limitations/exceptions. In the remaining twenty states, agricultural workers are either altogether excluded from the state’s minimum wage laws or the state has no minimum wage laws (Farmworker Justice, Wages Map).

In addition, the Fair Labor Standards Act applies only to employees. Though not specified in the legislation, subsequent court rulings have found that incarcerated individuals employed by their jail or prison, or contracted by their jail or prison to another industry, are not employees under the FLSA, and therefore do not have to be paid a minimum wage.134Hale v. Arizona in 1993 ruled that prisoners are not entitled to the minimum wage under the FLSA. (Hale v. Arizona, 993 F.2d 1387 (9th Cir. 1993)). Lynn Gibson of the Government Accountability Office testified on the matter before the Senate Committee on Labor and Human Resources. The most recent estimate puts the average wage of incarcerated individuals at 86 cents per day.135Sources: Prison Policy Initiative. 2017. How Much Do Incarcerated People Earn in Each State? and State and Federal Prison Wage Policies and Sourcing Information. There are several work arrangements that fall outside the employer-employee relationship, such as interns or independent contractors, who are also not subject to the minimum wage. This category includes all gig workers, such as ride-sharing drivers.136The issue of whether ride-share drivers in particular should be treated as employees or independent contractors, and what sorts of benefits the drivers should be entitled to, has come to a head in California. Policy Options:

1. End subminimum wages for workers with disabilities. Seven states have already eliminated, or are in the process of phasing-out subminimum wages for these workers. 137U.S. Commission on Civil Rights. 2020. Subminimum Wages: Impacts on the Civil Rights of People with Disabilities. p. 179.

2. Tie the subminimum wage for tipped workers to 70 percent of the minimum wage.138This proposal was included under Section 2(b) of the H.R. 1010 (113th): Fair Minimum Wage Act of 2013. This policy would keep a two-tiered wage system in effect, but would peg it at a reasonable percentage of the minimum wage.

3. End subminimum wages for all employees. Adopting this option would include subminimum wages currently allowed by the FLSA and would also end the Youth Minimum Wage and the Tipped Minimum Wage.

4. Reform wages for incarcerated persons. The goal of such reform would make work performed by incarcerated workers subject to a higher minimum wage.

5. Require companies that pay independent contractors to provide proof that each contractor earned at least the minimum wage.

Update overtime and work scheduling rules

The Fair Labor Standards Act establishes a 40-hour workweek and requires that any additional hours of work be paid at overtime rates defined as 1.5 times the usual wage.139U.S. Department of Labor, Wage and Hour Division. Overtime Pay.

Workers earning above a certain wage are exempt from overtime provisions and may be paid a flat salary regardless of how many hours they work. The current exempt salary is $684 per week, or $35,568 per year.140U.S. Department of Labor, Wage and Hour Division. Fact Sheet #17G: Salary Basis Requirement and the Part 541 Exemptions Under the Fair Labor Standards Act (FLSA) These dollar amounts were arrived at using wage percentiles with $35,568 being the 20th percentile of earnings of salaried workers in the lowest earning Census regions. 141Specifically, “Using pooled 2018/2019 [Current Population Survey–Merged Outgoing Rotation Group Earnings] data to represent the July 2018 through June 2019 period, a salary level of $684 corresponds to the 20th percentile of earnings for full-time salaried workers in the South Census Region and/or in the retail industry.”The same rules are related to the overtime threshold for highly compensated employees, which is currently $107,432 per year using data for the 80th percentile of weekly, full-time salary workers nationally. This exempts employees who are highly compensated annually, but who do not receive a consistent salary. (U.S. Department of Labor, Highlights of the Final Rule on Overtime Eligibility for White Collar Employees)

Additional aspects of worker hours, besides total length, have emerged as issues in recent years. Some employers use just-in-time scheduling or call-in scheduling, where workers are notified of the hours of their shift on short notice, including the morning of.142Lambert et al. 2019 explores the extent to which U.S. workers deal with precarious work schedules, and how such work schedules contribute to economic insecurity. In a 2020 essay, Lambert lays out the “dimensions of problematic work schedules,” evidence from states that have taken action, and how better scheduling benefits both employers and employees in the long run. Harknett et al. 2021 inspected the impacts of Seattle’s Secure Scheduling Ordinance in the second year after its implementation and found “increased work schedule stability and predictability, 2) increased job satisfaction and satisfaction with work schedules, 3) increased overall happiness and sleep quality, and 4) reduced material hardship” for Seattle workers. From the employer perspective, Kamalahmadi et al. 2019 find that day-of scheduling reduces both worker productivity and profit levels in the restaurant industry. The Center for Popular Democracy outlines the goals of “The Fair Workweek Initiative”. Certain states and localities have passed regulations that require a minimum advance notice of shifts in “good faith” in certain industries, after which the shift may not be canceled without pay or penalty.143Oregon, for example, requires that employers notify employees at least fourteen days in advance of their shift (or their “on-call” shift). (Oregon Bureau of Labor & Industries. Predictive Scheduling) Some employers also do not have any regulation regarding time in between shifts. Certain states and localities have thus passed a minimum shift time rule that requires a minimum amount of time off between shifts spanning two calendar days.144In New York City, for example, fast food workers must “consent in writing before being scheduled to work or working two shifts over two calendar days when the first shift ends a day and there are less than 11 hours between shifts.” For such shifts, employers must pay the employees a $100 premium. (NYC Department of Consumer and Worker Protection, Fair Workweek Law: Frequently Asked Questions). Addressing these issues has been broadly dubbed Fair Workweek laws.145Wykstra 2019 offers an overview of the breadth and goals of Fair Workweek laws

Options:

1. Index the salary thresholds for overtime-exempt status to growth in the average or median wage. This policy would increase the salary thresholds every year rather than intermittently. Indexing the exempt status to wages, rather than prices, is used, for example, in establishing the threshold for Social Security’s insurance contributions.146Average wages are used to update the threshold for wages subject to FICA. The wage threshold changes every year based on average wage growth (Social Security Administration, Contribution and Benefit Base).

2. Raise the salary threshold for overtime-exempt status and index it to the growth in the average or median wage. Rather than use the current 20th percentile salary for the lowest earning region, use the 25th percentile nationwide. Regional, statewide, or citywide metrics would ensure that overtime exemption levels are commensurate to local costs-of-living.

3. Explore the need for a commission in the U.S. Department of Labor to study existing state and local Fair Workweek Laws and make federal recommendations for adoption. Given the policy experimentation at the state and local level and its recency, this policy would give the Department of Labor a fixed window to assess those policies.

4. Explore options to provide better predictability for workers. When workers are asked to work without sufficient notice, this option would entitle them to increased pay. The window of sufficient notice and amount of pay increase vary. Options, such as some number of days required notice and/or extra compensation, should be evaluated.147National Women’s Law Center. 2019. State and Local Laws Advancing Fair Work Schedules.

Update wage and hiring rules

The majority of states have put in place rules that limit the information employers may collect from prospective workers during the application process because some information might be used to discriminate in hiring decisions or regarding salary once hired.

Options:

1. Prohibit the requirement that applicants must disclose prior criminal records during the job application process. This prohibition is commonly referred to as Ban the Box 148See Remove Barriers to Opportunity for People with Criminal Records under Equity policy for more details. or fair chance hiring and is in place in 36 states. 149Avery, Beth, and Han Lu. 2020. Ban the Box: U.S. Cities, Counties, and States Adopt Fair Hiring Policies. , 150Washington, DC, enacted ban the box legislation with the Fair Criminal Record Screening Amendment Act of 2014. The law prohibits employers with eleven or more employees “from asking job applicants about: arrests; criminal accusations made against the applicant that are not pending or did not result in a conviction; or criminal convictions. However, an employer may ask about criminal conviction(s) after extending a conditional offer of employment (the employer can never ask about arrests or criminal accusations that aren’t pending). An employer who properly asks about a criminal conviction can only withdraw the offer or take adverse action against the applicant for a legitimate business reason that is reasonable under the six factors listed in the Act” (DC.gov Office of Human Rights, Returning Citizens and Employment). Stacy and Cohen 2017 review the impacts of DC’s legislation, and discuss improvements, including stronger equal employment legislation and enforcement, provision of training for employers, better outreach to those with criminal records, and others. As of 2019, 89 percent of employers used county/statewide criminal background searches in the hiring process, and 85 percent used national criminal searches.151National Association of Professional Background Screeners. 2019. How Human Resources Professionals View and Use Background Screening in Employment.

2. Prohibit the requirement that applicants must disclose prior salary or pay information during the job application and salary negotiation process. Commonly referred to as a salary history ban, this prohibition is in place in 19 states.152H.R. Dive. 2020. Salary History Bans. A recent study finds that salary history bans substantially increase pay for both female and Black workers.153Bessen, James E., Chen Meng, and Erich Denk. 2020. Perpetuating Inequality: What Salary History Bans Reveal About Wages. SSRN.The authors discuss their findings here.

Improve labor law enforcement

The four federal primary bodies for enforcing laws related to the labor market are the Wage and Hour Division (WHD) and the Occupational Health and Safety Administration (OSHA) in the Department of Labor, the Equal Employment Opportunity Commission (EEOC), and the National Labor Relations Board (NLRB).

Options:

1. Increase staffing and funding at the labor regulatory bodies: WHD, OSHA, EEOC, NLRB. Any update to labor law regulations should be accompanied by a commensurate update to labor law enforcement capabilities. A recent piece by the Washington Center for Equitable Growth states that, for example, As of May 1, 2020, the [WHD] employed 779 investigators to protect more than 143 million workers, which is fewer than the 1,000 investigators it employed back in 1948 when it was only responsible for safeguarding the rights of 22.6 million workers [T]he International Labor Organization recommends a benchmark of one investigator per 10,000 workers, which would require roughly 13,500 more investigators to be hired.154Washington Center for Equitable Growth. 2021. Executive Action to Combat Wage Theft Against U.S. workers. This piece also outlines how the WHD might “prioritize strategic enforcement” to increase the perceived cost of labor law violations and “pursue co-enforcement with community-based organizations” to help uncover violations in industries where workers fear retribution for speaking up.

2. Review procedures for reporting workplace complaints at all four agencies and make recommendations for improvement. One of the agencies (WHD) does not allow for online submission of complaints, only phone calls, which can be difficult to place during the workday. Another (OSHA) has been subject to inspector general investigations about not following up on whistleblower complaints about workplace safety during the pandemic in a timely manner.155The full report of the Office of the Inspector General can be found here. A commission would evaluate both the worker-facing aspect of the agencies in collecting complaints as well as their performance in following up on them.

3. Make it easier for workers to choose to be represented by a union. The National Labor Relations Act establishes the right for workers to unionize. Limitations on forming unions have threatened this right.

Twenty-eight states, for instance, have Right to Work laws, which do not allow for compulsory membership in a union as a condition of employment. On the one hand, this means non-union members receive any benefit from a unionized workplace without paying dues toward the union. On the other hand, right to work laws ensure that workers who do not want to join a union are not forced to do so.156Workplace Fairness. Right to Work Laws. Employees deserve both the right to unionize and to not belong to a union should they choose. Policies to increase union representation range from increasing enforcement to preventing employer retaliation157Laufer and Loustaunau 2020document how U.S. employers engage in anti-unionization activities, from mandatory anti-union meetings to threats of job loss. They find that U.S. employers “collectively spend $340 million per year on ‘union avoidance’ consultants who teach them how to exploit the weaknesses of federal labor law to effectively scare workers out of exercising their legal right to collective bargaining.” to encouraging sectoral bargaining models.158“Sectoral bargaining—also known as multiemployer, industrywide, or broad-based bargaining—is a form of collective bargaining that provides contract coverage and sets compensation floors for most workers in a particular occupation, industry, or region” (Center for American Progress, What is Sectoral Bargaining?).

Provide support for unemployed workers

The primary means of providing financial support for workers who are looking for a job is Unemployment Insurance,159Woodbury 2014 provides an overview of U.S. unemployment insurance programs, as do Whittaker and Isaacs 2019. the state-administered program for workers who have worked previously, lost their job through no fault of their own, and continue to search for work. State workforce agencies and the U.S. Department of Labor (DOL) administer this program. Workers without a sufficient work history, including all new workers, are not eligible for Unemployment Insurance.

The Workforce Innovation and Opportunity Act (WIOA) is the primary vehicle for funding programs and supports to facilitate the development of the U.S. workforce, including through re-employment. Of WIOA’s many programs, a transitional job program is one intended for workers without a job. Transitional job programs provide temporary, wage-paying jobs, support services, and job placement help to individuals who have difficulty getting and holding jobs in the regular labor market.160Bloom 2010 discusses existing evidence around transitional jobs programs, goals for transitional jobs programs, and the testing of new strategies in transitional jobs programs.

Yahner and Zweig 2012 inspect which components of transitional jobs programs have the most impact in terms of positive employment and nonrecidivism for participants. The duration of one’s transitional job is the component that has the greatest impact on one’s likelihood of receiving unsubsidized employment following the transitional job. Those “who spent 30 workdays or more in a transitional job during the first six months of the follow-up period (at a rate of four workdays per week, which equates to two months of time) were 14 [percentage points] more likely than other TJ program participants to obtain an unsubsidized job in the subsequent six months (45% vs. 31%; see Figure 1, Model A).”

Barden et al. 2018 discuss the findings of the Enhanced Transitional Jobs Demonstration, which “tested seven transitional jobs programs that targeted people recently released from prison or low-income parents who had fallen behind in child support payments,” and tracked participants’ outcomes over thirty months following their enrollment in the programs. On average, those in the programs earned $700 more than the control group in the final year of the study and saw an employment rate of 64 percent compared to 60 percent in the control group in the final year.
The DOL-funded transitional jobs programs are currently only available to hard-to-employ populations, like formerly incarcerated individuals or those who experience disasters, mass layoffs, plant closing, or other events that precipitate substantial increases in the number of unemployed individuals.161Section 134 (a)(2)(A)(i)(II) of the Workforce Innovation and Opportunity Act, Public Law113–128—July 22, 2014, 128 STAT. 1520, 29 USC 3174.

Options:

1. Create a Job Seekers’ Allowance. Current support for unemployed jobseekers on Unemployment Insurance extends only to workers who were employed sufficiently in the past to qualify for UI benefits and were laid off. A new Job Seekers Allowance would provide a cash stipend for unemployed workers who either do not have a work history sufficient to receive UI benefits, or who have exhausted their UI benefits, while they actively seek paying jobs.162This sort of program is modeled after the United Kingdom’s Jobseeker’s AllowanceStrengthening Unemployment Protections in America outlines the creation of jobseeker’s allowance in the U.S., who such a program would target, and how it might be implemented (West et al. 2016).

2. Increase access to transitional jobs. The current program only provides transitional jobs to unemployed workers in certain situations. Funding is also insufficient to offer paid employment to the millions of unemployed and underemployed U.S. adults who, especially during periods of high unemployment, are unable to obtain paying jobs in the regular labor market. The transitional jobs program might be expanded, both in eligibility and resources, to be made available for any individual in need of work or experience.163Federal legislation to carry this option out was introduced in 2021 as the “Jobs for Economic Recovery Act” by Danny Davis (D-IL) in the House and by Ron Wyden (D-OR) in the Senate.

3. Increase funding and opportunities for job training. The primary legislation for directing funding to worker training is the Workforce Innovation and Opportunity Act (WIOA). WIOA funds a variety of programs, including Job Corps164“Job Corps is the largest nationwide residential career training program in the country and has been operating for more than 50 years. The program helps eligible young people ages 16 through 24 complete their high school education, trains them for meaningful careers, and assists them with obtaining employment. Job Corps has trained and educated over two million individuals since 1964” (What Is Job Corps, U.S. Department of Labor)., to train workers, primarily those who meet specific qualifications of need.165The Workforce Innovation and Opportunity Act and the One-Stop Delivery System outlines the many avenues through which WIOA funds workforce development activities (Bradley 2015, Congressional Research Service). Larger investments in Career and Technical Education (CTE)166CTE, also known as vocational education, focuses on equipping students with skills that translate more directly to the labor market. Catherine Gewertz discusses CTE in Education WeekBrunner et al. 2019 state that there is “increasing evidence that high-quality CTE programs in high school are actually complements—they can improve high school completion, employment, and earnings, all while not sacrificing general learning outcomes.” Their research found a 10 percentage point increase in graduation rates and a 30 percent increase in quarterly earnings for participants in CTE high schools in Connecticut, though all positive impacts accrued to males. and job training may improve the ability of the U.S. workforce to adapt to an evolving labor market, and in doing so improve wages and worker outcomes.

  • 116
    U.S. Department of Labor, Wage and Hour Division. History of Changes to the Minimum Wage Law.
  • 117
    At full-time work (40 hours per week, 52 weeks per year), a minimum wage worker earning the federal minimum wage earns $15,080 annually. Had the minimum wage increased with inflation (CPI-U) since January 2009, it would have been $8.86 as of January 2021($18,429 annually). Had it increased with median weekly earnings since the first quarter of 2009, it would have been $9.74 as of the fourth quarter of 2019 ($20,259 annually). Had it increased with average hourly earnings in the private sector since January 2009, it would have been $9.88 as of January 2021 ($20,550 annually) (1/2021 data preliminary at time of extraction).
  • 118
    U.S. Department of Labor, Wage and Hour Division. 2021. Consolidated Minimum Wage Table.
  • 119
  • 120
    In 2014, SeaTac became the first city in the United States to institute a $15 minimum wage as a result of employers at SeaTac playing “hardball” during union negotiations. As leverage, union organizer David Rolf put a $15 minimum wage on the city ballot. Much to his surprise, it passed, and since then many other cities, counties, and states have followed suit (Bergman, 2015).
  • 121
    The National Law Review. 2020. Florida Minimum Wage To Increase. Volume X, Number 366.
  • 122
    Bureau of Labor Statistics. 2020. Characteristics of minimum wage workers, 2019.
  • 123
    The 2021 federal poverty guidelinesindicates that a household of four earning less than $26,500 is in poverty. At $12.75 for 40 hours a week, 52 weeks a year, an individual would take home $26,520. This calculation does not take into consideration payroll taxes, income taxes, sales taxes, or tax credits.
  • 124
    Oregon Minimum Wage. 2021. Oregon Bureau of Labor and Industries.
  • 125
    Average wages are used to update the threshold for wages subject to FICA. The wage threshold changes every year based on average wage growth. (Social Security Administration, Contribution and Benefit Base)
  • 126
    U.S. Department of Labor, Wage and Hour Division. Wages and the Fair Labor Standards Act.
  • 127
    U.S. Department of Labor, Wage and Hour Division. Subminimum Wage.
  • 128
    According to the Department of Labor, “a worker who has disabilities for the job being performed is one whose earning or productive capacity is impaired by a physical or mental disability, including those relating to age or injury. Disabilities which may affect productive capacity include blindness, mental illness, developmental disabilities, cerebral palsy, Alcoholism and drug addiction.” (U.S. Department of Labor, Fact Sheet #39: The Employment of Workers with Disabilities at Subminimum Wages)An investigation into the use of subminimum wage practices for workers with disabilities by the U.S. Commission on Civil Rights found that its use violated the civil rights of workers with disabilities, did not lead to higher employment, and recommended repealing the section of the Fair Labor Standards Act (14(c)) that allows for subminimum wages. (U.S. Commission on Civil Rights, Subminimum Wages: Impacts on the Civil Rights of People with Disabilities)
  • 129
    Defined as “a student who is at least 16 years of age (or at least 18 years of age if employed in an occupation which the Secretary of Labor has declared to be particularly hazardous), who is receiving instruction in any accredited school, college or university and who is employed by an establishment on a part-time basis, pursuant to a bona fide vocational training program.” (U.S. Department of Labor, Instructions for Form WH-205: Application to Employ Student-Learners at Subminimum Wages)
  • 130
    The industries in which employers may apply for certificates granting exception include “those that manufacture: women’s apparel; knitted outerwear; gloves and mittens; buttons and buckles; handkerchiefs; embroideries; and jewelry. There are two different types of certificates…” One is for individuals facing circumstances that limit their ability to work outside the home, and the other for employers to employ homeworkers more broadly; this certificate does not apply to the women’s apparel industry. (U.S Department of Labor, Industrial Homeworker)
  • 131
    U.S. Department of Labor, Wage and Hour Division. Fact Sheet #32: Youth Minimum Wage – Fair Labor Standards Act.Minimum wage laws in each state are available at minimum-wage.org.
  • 132
    The minimum wage for tipped employees exceeds $2.13 in all but 15 states. (U.S. Department of Labor, Minimum Wages for Tipped Employees).
  • 133
    All agricultural workers are covered by the federal minimum wage except in cases of “work performed on a farm which is not incidental to or in conjunction with such farmer’s farming operation” … and “operations performed off a farm if performed by employees employed by someone other than the farmer whose agricultural products are being worked on. Other exemptions include:1) Agricultural employees who are immediate family members of their employer; 2) Those principally engaged on the range in the production of livestock; 3) Local hand harvest laborers who commute daily from their permanent residence, are paid on a piece rate basis in traditionally piece-rated occupations, and were engaged in agriculture less than thirteen weeks during the preceding calendar year; and 4) Non-local minors, 16 years of age or under, who are hand harvesters, paid on a piece rate basis in traditionally piece-rated occupations, employed on the same farm as their parent, and paid the same piece rate as those over 16 (U.S. Department of Labor, Fact Sheet #12: Agricultural Employers Under the Fair Labor Standards Act (FLSA)). Only seven states cover agricultural workers in their state’s minimum wage laws. In two of those, such workers have a specified lower wage than other workers. In twenty-three states, some agricultural workers are covered but there are limitations/exceptions. In the remaining twenty states, agricultural workers are either altogether excluded from the state’s minimum wage laws or the state has no minimum wage laws (Farmworker Justice, Wages Map).
  • 134
    Hale v. Arizona in 1993 ruled that prisoners are not entitled to the minimum wage under the FLSA. (Hale v. Arizona, 993 F.2d 1387 (9th Cir. 1993)). Lynn Gibson of the Government Accountability Office testified on the matter before the Senate Committee on Labor and Human Resources.
  • 135
  • 136
    The issue of whether ride-share drivers in particular should be treated as employees or independent contractors, and what sorts of benefits the drivers should be entitled to, has come to a head in California.
  • 137
  • 138
    This proposal was included under Section 2(b) of the H.R. 1010 (113th): Fair Minimum Wage Act of 2013.
  • 139
    U.S. Department of Labor, Wage and Hour Division. Overtime Pay.
  • 140
  • 141
    Specifically, “Using pooled 2018/2019 [Current Population Survey–Merged Outgoing Rotation Group Earnings] data to represent the July 2018 through June 2019 period, a salary level of $684 corresponds to the 20th percentile of earnings for full-time salaried workers in the South Census Region and/or in the retail industry.”The same rules are related to the overtime threshold for highly compensated employees, which is currently $107,432 per year using data for the 80th percentile of weekly, full-time salary workers nationally. This exempts employees who are highly compensated annually, but who do not receive a consistent salary. (U.S. Department of Labor, Highlights of the Final Rule on Overtime Eligibility for White Collar Employees)
  • 142
    Lambert et al. 2019 explores the extent to which U.S. workers deal with precarious work schedules, and how such work schedules contribute to economic insecurity. In a 2020 essay, Lambert lays out the “dimensions of problematic work schedules,” evidence from states that have taken action, and how better scheduling benefits both employers and employees in the long run. Harknett et al. 2021 inspected the impacts of Seattle’s Secure Scheduling Ordinance in the second year after its implementation and found “increased work schedule stability and predictability, 2) increased job satisfaction and satisfaction with work schedules, 3) increased overall happiness and sleep quality, and 4) reduced material hardship” for Seattle workers. From the employer perspective, Kamalahmadi et al. 2019 find that day-of scheduling reduces both worker productivity and profit levels in the restaurant industry. The Center for Popular Democracy outlines the goals of “The Fair Workweek Initiative”.
  • 143
    Oregon, for example, requires that employers notify employees at least fourteen days in advance of their shift (or their “on-call” shift). (Oregon Bureau of Labor & Industries. Predictive Scheduling)
  • 144
    In New York City, for example, fast food workers must “consent in writing before being scheduled to work or working two shifts over two calendar days when the first shift ends a day and there are less than 11 hours between shifts.” For such shifts, employers must pay the employees a $100 premium. (NYC Department of Consumer and Worker Protection, Fair Workweek Law: Frequently Asked Questions).
  • 145
    Wykstra 2019 offers an overview of the breadth and goals of Fair Workweek laws
  • 146
    Average wages are used to update the threshold for wages subject to FICA. The wage threshold changes every year based on average wage growth (Social Security Administration, Contribution and Benefit Base).
  • 147
    National Women’s Law Center. 2019. State and Local Laws Advancing Fair Work Schedules.
  • 148
    See Remove Barriers to Opportunity for People with Criminal Records under Equity policy for more details.
  • 149
  • 150
    Washington, DC, enacted ban the box legislation with the Fair Criminal Record Screening Amendment Act of 2014. The law prohibits employers with eleven or more employees “from asking job applicants about: arrests; criminal accusations made against the applicant that are not pending or did not result in a conviction; or criminal convictions. However, an employer may ask about criminal conviction(s) after extending a conditional offer of employment (the employer can never ask about arrests or criminal accusations that aren’t pending). An employer who properly asks about a criminal conviction can only withdraw the offer or take adverse action against the applicant for a legitimate business reason that is reasonable under the six factors listed in the Act” (DC.gov Office of Human Rights, Returning Citizens and Employment). Stacy and Cohen 2017 review the impacts of DC’s legislation, and discuss improvements, including stronger equal employment legislation and enforcement, provision of training for employers, better outreach to those with criminal records, and others.
  • 151
    National Association of Professional Background Screeners. 2019. How Human Resources Professionals View and Use Background Screening in Employment.
  • 152
    H.R. Dive. 2020. Salary History Bans.
  • 153
    Bessen, James E., Chen Meng, and Erich Denk. 2020. Perpetuating Inequality: What Salary History Bans Reveal About Wages. SSRN.The authors discuss their findings here.
  • 154
    Washington Center for Equitable Growth. 2021. Executive Action to Combat Wage Theft Against U.S. workers. This piece also outlines how the WHD might “prioritize strategic enforcement” to increase the perceived cost of labor law violations and “pursue co-enforcement with community-based organizations” to help uncover violations in industries where workers fear retribution for speaking up.
  • 155
    The full report of the Office of the Inspector General can be found here.
  • 156
    Workplace Fairness. Right to Work Laws.
  • 157
    Laufer and Loustaunau 2020document how U.S. employers engage in anti-unionization activities, from mandatory anti-union meetings to threats of job loss. They find that U.S. employers “collectively spend $340 million per year on ‘union avoidance’ consultants who teach them how to exploit the weaknesses of federal labor law to effectively scare workers out of exercising their legal right to collective bargaining.”
  • 158
    “Sectoral bargaining—also known as multiemployer, industrywide, or broad-based bargaining—is a form of collective bargaining that provides contract coverage and sets compensation floors for most workers in a particular occupation, industry, or region” (Center for American Progress, What is Sectoral Bargaining?).
  • 159
    Woodbury 2014 provides an overview of U.S. unemployment insurance programs, as do Whittaker and Isaacs 2019.
  • 160
    Bloom 2010 discusses existing evidence around transitional jobs programs, goals for transitional jobs programs, and the testing of new strategies in transitional jobs programs.

    Yahner and Zweig 2012 inspect which components of transitional jobs programs have the most impact in terms of positive employment and nonrecidivism for participants. The duration of one’s transitional job is the component that has the greatest impact on one’s likelihood of receiving unsubsidized employment following the transitional job. Those “who spent 30 workdays or more in a transitional job during the first six months of the follow-up period (at a rate of four workdays per week, which equates to two months of time) were 14 [percentage points] more likely than other TJ program participants to obtain an unsubsidized job in the subsequent six months (45% vs. 31%; see Figure 1, Model A).”

    Barden et al. 2018 discuss the findings of the Enhanced Transitional Jobs Demonstration, which “tested seven transitional jobs programs that targeted people recently released from prison or low-income parents who had fallen behind in child support payments,” and tracked participants’ outcomes over thirty months following their enrollment in the programs. On average, those in the programs earned $700 more than the control group in the final year of the study and saw an employment rate of 64 percent compared to 60 percent in the control group in the final year.
  • 161
    Section 134 (a)(2)(A)(i)(II) of the Workforce Innovation and Opportunity Act, Public Law113–128—July 22, 2014, 128 STAT. 1520, 29 USC 3174.
  • 162
    This sort of program is modeled after the United Kingdom’s Jobseeker’s AllowanceStrengthening Unemployment Protections in America outlines the creation of jobseeker’s allowance in the U.S., who such a program would target, and how it might be implemented (West et al. 2016).
  • 163
    Federal legislation to carry this option out was introduced in 2021 as the “Jobs for Economic Recovery Act” by Danny Davis (D-IL) in the House and by Ron Wyden (D-OR) in the Senate.
  • 164
    “Job Corps is the largest nationwide residential career training program in the country and has been operating for more than 50 years. The program helps eligible young people ages 16 through 24 complete their high school education, trains them for meaningful careers, and assists them with obtaining employment. Job Corps has trained and educated over two million individuals since 1964” (What Is Job Corps, U.S. Department of Labor).
  • 165
    The Workforce Innovation and Opportunity Act and the One-Stop Delivery System outlines the many avenues through which WIOA funds workforce development activities (Bradley 2015, Congressional Research Service).
  • 166
    CTE, also known as vocational education, focuses on equipping students with skills that translate more directly to the labor market. Catherine Gewertz discusses CTE in Education WeekBrunner et al. 2019 state that there is “increasing evidence that high-quality CTE programs in high school are actually complements—they can improve high school completion, employment, and earnings, all while not sacrificing general learning outcomes.” Their research found a 10 percentage point increase in graduation rates and a 30 percent increase in quarterly earnings for participants in CTE high schools in Connecticut, though all positive impacts accrued to males.
  • 116
    U.S. Department of Labor, Wage and Hour Division. History of Changes to the Minimum Wage Law.
  • 117
    At full-time work (40 hours per week, 52 weeks per year), a minimum wage worker earning the federal minimum wage earns $15,080 annually. Had the minimum wage increased with inflation (CPI-U) since January 2009, it would have been $8.86 as of January 2021($18,429 annually). Had it increased with median weekly earnings since the first quarter of 2009, it would have been $9.74 as of the fourth quarter of 2019 ($20,259 annually). Had it increased with average hourly earnings in the private sector since January 2009, it would have been $9.88 as of January 2021 ($20,550 annually) (1/2021 data preliminary at time of extraction).
  • 118
    U.S. Department of Labor, Wage and Hour Division. 2021. Consolidated Minimum Wage Table.
  • 119
  • 120
    In 2014, SeaTac became the first city in the United States to institute a $15 minimum wage as a result of employers at SeaTac playing “hardball” during union negotiations. As leverage, union organizer David Rolf put a $15 minimum wage on the city ballot. Much to his surprise, it passed, and since then many other cities, counties, and states have followed suit (Bergman, 2015).
  • 121
    The National Law Review. 2020. Florida Minimum Wage To Increase. Volume X, Number 366.
  • 122
    Bureau of Labor Statistics. 2020. Characteristics of minimum wage workers, 2019.
  • 123
    The 2021 federal poverty guidelinesindicates that a household of four earning less than $26,500 is in poverty. At $12.75 for 40 hours a week, 52 weeks a year, an individual would take home $26,520. This calculation does not take into consideration payroll taxes, income taxes, sales taxes, or tax credits.
  • 124
    Oregon Minimum Wage. 2021. Oregon Bureau of Labor and Industries.
  • 125
    Average wages are used to update the threshold for wages subject to FICA. The wage threshold changes every year based on average wage growth. (Social Security Administration, Contribution and Benefit Base)
  • 126
    U.S. Department of Labor, Wage and Hour Division. Wages and the Fair Labor Standards Act.
  • 127
    U.S. Department of Labor, Wage and Hour Division. Subminimum Wage.
  • 128
    According to the Department of Labor, “a worker who has disabilities for the job being performed is one whose earning or productive capacity is impaired by a physical or mental disability, including those relating to age or injury. Disabilities which may affect productive capacity include blindness, mental illness, developmental disabilities, cerebral palsy, Alcoholism and drug addiction.” (U.S. Department of Labor, Fact Sheet #39: The Employment of Workers with Disabilities at Subminimum Wages)An investigation into the use of subminimum wage practices for workers with disabilities by the U.S. Commission on Civil Rights found that its use violated the civil rights of workers with disabilities, did not lead to higher employment, and recommended repealing the section of the Fair Labor Standards Act (14(c)) that allows for subminimum wages. (U.S. Commission on Civil Rights, Subminimum Wages: Impacts on the Civil Rights of People with Disabilities)
  • 129
    Defined as “a student who is at least 16 years of age (or at least 18 years of age if employed in an occupation which the Secretary of Labor has declared to be particularly hazardous), who is receiving instruction in any accredited school, college or university and who is employed by an establishment on a part-time basis, pursuant to a bona fide vocational training program.” (U.S. Department of Labor, Instructions for Form WH-205: Application to Employ Student-Learners at Subminimum Wages)
  • 130
    The industries in which employers may apply for certificates granting exception include “those that manufacture: women’s apparel; knitted outerwear; gloves and mittens; buttons and buckles; handkerchiefs; embroideries; and jewelry. There are two different types of certificates…” One is for individuals facing circumstances that limit their ability to work outside the home, and the other for employers to employ homeworkers more broadly; this certificate does not apply to the women’s apparel industry. (U.S Department of Labor, Industrial Homeworker)
  • 131
    U.S. Department of Labor, Wage and Hour Division. Fact Sheet #32: Youth Minimum Wage – Fair Labor Standards Act.Minimum wage laws in each state are available at minimum-wage.org.
  • 132
    The minimum wage for tipped employees exceeds $2.13 in all but 15 states. (U.S. Department of Labor, Minimum Wages for Tipped Employees).
  • 133
    All agricultural workers are covered by the federal minimum wage except in cases of “work performed on a farm which is not incidental to or in conjunction with such farmer’s farming operation” … and “operations performed off a farm if performed by employees employed by someone other than the farmer whose agricultural products are being worked on. Other exemptions include:1) Agricultural employees who are immediate family members of their employer; 2) Those principally engaged on the range in the production of livestock; 3) Local hand harvest laborers who commute daily from their permanent residence, are paid on a piece rate basis in traditionally piece-rated occupations, and were engaged in agriculture less than thirteen weeks during the preceding calendar year; and 4) Non-local minors, 16 years of age or under, who are hand harvesters, paid on a piece rate basis in traditionally piece-rated occupations, employed on the same farm as their parent, and paid the same piece rate as those over 16 (U.S. Department of Labor, Fact Sheet #12: Agricultural Employers Under the Fair Labor Standards Act (FLSA)). Only seven states cover agricultural workers in their state’s minimum wage laws. In two of those, such workers have a specified lower wage than other workers. In twenty-three states, some agricultural workers are covered but there are limitations/exceptions. In the remaining twenty states, agricultural workers are either altogether excluded from the state’s minimum wage laws or the state has no minimum wage laws (Farmworker Justice, Wages Map).
  • 134
    Hale v. Arizona in 1993 ruled that prisoners are not entitled to the minimum wage under the FLSA. (Hale v. Arizona, 993 F.2d 1387 (9th Cir. 1993)). Lynn Gibson of the Government Accountability Office testified on the matter before the Senate Committee on Labor and Human Resources.
  • 135
  • 136
    The issue of whether ride-share drivers in particular should be treated as employees or independent contractors, and what sorts of benefits the drivers should be entitled to, has come to a head in California.
  • 137
  • 138
    This proposal was included under Section 2(b) of the H.R. 1010 (113th): Fair Minimum Wage Act of 2013.
  • 139
    U.S. Department of Labor, Wage and Hour Division. Overtime Pay.
  • 140
  • 141
    Specifically, “Using pooled 2018/2019 [Current Population Survey–Merged Outgoing Rotation Group Earnings] data to represent the July 2018 through June 2019 period, a salary level of $684 corresponds to the 20th percentile of earnings for full-time salaried workers in the South Census Region and/or in the retail industry.”The same rules are related to the overtime threshold for highly compensated employees, which is currently $107,432 per year using data for the 80th percentile of weekly, full-time salary workers nationally. This exempts employees who are highly compensated annually, but who do not receive a consistent salary. (U.S. Department of Labor, Highlights of the Final Rule on Overtime Eligibility for White Collar Employees)
  • 142
    Lambert et al. 2019 explores the extent to which U.S. workers deal with precarious work schedules, and how such work schedules contribute to economic insecurity. In a 2020 essay, Lambert lays out the “dimensions of problematic work schedules,” evidence from states that have taken action, and how better scheduling benefits both employers and employees in the long run. Harknett et al. 2021 inspected the impacts of Seattle’s Secure Scheduling Ordinance in the second year after its implementation and found “increased work schedule stability and predictability, 2) increased job satisfaction and satisfaction with work schedules, 3) increased overall happiness and sleep quality, and 4) reduced material hardship” for Seattle workers. From the employer perspective, Kamalahmadi et al. 2019 find that day-of scheduling reduces both worker productivity and profit levels in the restaurant industry. The Center for Popular Democracy outlines the goals of “The Fair Workweek Initiative”.
  • 143
    Oregon, for example, requires that employers notify employees at least fourteen days in advance of their shift (or their “on-call” shift). (Oregon Bureau of Labor & Industries. Predictive Scheduling)
  • 144
    In New York City, for example, fast food workers must “consent in writing before being scheduled to work or working two shifts over two calendar days when the first shift ends a day and there are less than 11 hours between shifts.” For such shifts, employers must pay the employees a $100 premium. (NYC Department of Consumer and Worker Protection, Fair Workweek Law: Frequently Asked Questions).
  • 145
    Wykstra 2019 offers an overview of the breadth and goals of Fair Workweek laws
  • 146
    Average wages are used to update the threshold for wages subject to FICA. The wage threshold changes every year based on average wage growth (Social Security Administration, Contribution and Benefit Base).
  • 147
    National Women’s Law Center. 2019. State and Local Laws Advancing Fair Work Schedules.
  • 148
    See Remove Barriers to Opportunity for People with Criminal Records under Equity policy for more details.
  • 149
  • 150
    Washington, DC, enacted ban the box legislation with the Fair Criminal Record Screening Amendment Act of 2014. The law prohibits employers with eleven or more employees “from asking job applicants about: arrests; criminal accusations made against the applicant that are not pending or did not result in a conviction; or criminal convictions. However, an employer may ask about criminal conviction(s) after extending a conditional offer of employment (the employer can never ask about arrests or criminal accusations that aren’t pending). An employer who properly asks about a criminal conviction can only withdraw the offer or take adverse action against the applicant for a legitimate business reason that is reasonable under the six factors listed in the Act” (DC.gov Office of Human Rights, Returning Citizens and Employment). Stacy and Cohen 2017 review the impacts of DC’s legislation, and discuss improvements, including stronger equal employment legislation and enforcement, provision of training for employers, better outreach to those with criminal records, and others.
  • 151
    National Association of Professional Background Screeners. 2019. How Human Resources Professionals View and Use Background Screening in Employment.
  • 152
    H.R. Dive. 2020. Salary History Bans.
  • 153
    Bessen, James E., Chen Meng, and Erich Denk. 2020. Perpetuating Inequality: What Salary History Bans Reveal About Wages. SSRN.The authors discuss their findings here.
  • 154
    Washington Center for Equitable Growth. 2021. Executive Action to Combat Wage Theft Against U.S. workers. This piece also outlines how the WHD might “prioritize strategic enforcement” to increase the perceived cost of labor law violations and “pursue co-enforcement with community-based organizations” to help uncover violations in industries where workers fear retribution for speaking up.
  • 155
    The full report of the Office of the Inspector General can be found here.
  • 156
    Workplace Fairness. Right to Work Laws.
  • 157
    Laufer and Loustaunau 2020document how U.S. employers engage in anti-unionization activities, from mandatory anti-union meetings to threats of job loss. They find that U.S. employers “collectively spend $340 million per year on ‘union avoidance’ consultants who teach them how to exploit the weaknesses of federal labor law to effectively scare workers out of exercising their legal right to collective bargaining.”
  • 158
    “Sectoral bargaining—also known as multiemployer, industrywide, or broad-based bargaining—is a form of collective bargaining that provides contract coverage and sets compensation floors for most workers in a particular occupation, industry, or region” (Center for American Progress, What is Sectoral Bargaining?).
  • 159
    Woodbury 2014 provides an overview of U.S. unemployment insurance programs, as do Whittaker and Isaacs 2019.
  • 160
    Bloom 2010 discusses existing evidence around transitional jobs programs, goals for transitional jobs programs, and the testing of new strategies in transitional jobs programs.

    Yahner and Zweig 2012 inspect which components of transitional jobs programs have the most impact in terms of positive employment and nonrecidivism for participants. The duration of one’s transitional job is the component that has the greatest impact on one’s likelihood of receiving unsubsidized employment following the transitional job. Those “who spent 30 workdays or more in a transitional job during the first six months of the follow-up period (at a rate of four workdays per week, which equates to two months of time) were 14 [percentage points] more likely than other TJ program participants to obtain an unsubsidized job in the subsequent six months (45% vs. 31%; see Figure 1, Model A).”

    Barden et al. 2018 discuss the findings of the Enhanced Transitional Jobs Demonstration, which “tested seven transitional jobs programs that targeted people recently released from prison or low-income parents who had fallen behind in child support payments,” and tracked participants’ outcomes over thirty months following their enrollment in the programs. On average, those in the programs earned $700 more than the control group in the final year of the study and saw an employment rate of 64 percent compared to 60 percent in the control group in the final year.
  • 161
    Section 134 (a)(2)(A)(i)(II) of the Workforce Innovation and Opportunity Act, Public Law113–128—July 22, 2014, 128 STAT. 1520, 29 USC 3174.
  • 162
    This sort of program is modeled after the United Kingdom’s Jobseeker’s AllowanceStrengthening Unemployment Protections in America outlines the creation of jobseeker’s allowance in the U.S., who such a program would target, and how it might be implemented (West et al. 2016).
  • 163
    Federal legislation to carry this option out was introduced in 2021 as the “Jobs for Economic Recovery Act” by Danny Davis (D-IL) in the House and by Ron Wyden (D-OR) in the Senate.
  • 164
    “Job Corps is the largest nationwide residential career training program in the country and has been operating for more than 50 years. The program helps eligible young people ages 16 through 24 complete their high school education, trains them for meaningful careers, and assists them with obtaining employment. Job Corps has trained and educated over two million individuals since 1964” (What Is Job Corps, U.S. Department of Labor).
  • 165
    The Workforce Innovation and Opportunity Act and the One-Stop Delivery System outlines the many avenues through which WIOA funds workforce development activities (Bradley 2015, Congressional Research Service).
  • 166
    CTE, also known as vocational education, focuses on equipping students with skills that translate more directly to the labor market. Catherine Gewertz discusses CTE in Education WeekBrunner et al. 2019 state that there is “increasing evidence that high-quality CTE programs in high school are actually complements—they can improve high school completion, employment, and earnings, all while not sacrificing general learning outcomes.” Their research found a 10 percentage point increase in graduation rates and a 30 percent increase in quarterly earnings for participants in CTE high schools in Connecticut, though all positive impacts accrued to males.