Unemployment Down; Minimum Wage Increases

work and smile

Paying workers a reasonable amount of money works out well fro economies. Raising minimum wage is happening in a few jurisdictions throughout North America and the results are coming in that the wage increase for the lowest-paid employees benefits everyone. In Ontario the minimum wage was increased last year and economic growth continued unabated, so much so that unemployment is now at a 18-year low in the province.

“It is tough to find a lot of evidence that employment has been negatively impacted,” said Josh Nye, senior economist with Royal Bank of Canada. “In terms of the minimum-wage hike, it has come at a good time when the economy is able to absorb that. Demand for labour is so strong and labour market conditions are quite tight. Employers don’t have much of a choice,” he said.

The minimum-wage hike has helped boost paycheques. In Ontario, the average hourly rate increased 4.3 per cent to $27.16 over July of last year. Across Canada, average hourly earnings rose by 3.2 per cent to $26.61.

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How Good Policy Alongside Good Design Improves Lives

subway transit

Tishaura Jones, the first female treasurer of St. Louis, set out to improve her city through good design. Through her own struggles dealing with the city’s bureaucracy she identified many problems with how information is presented, she noted she wasn’t the only one running into bad design. Jones decided to do something about it; the policies were there but nobody knew how to understand them since the information was presented in a Byzantine way. She has led St. Louis to alter how information gets communicated to its citizens.

As treasurer of St. Louis, she used two key design techniques to improve policy delivery and outcomes. First, she reached out to other cities that had prototyped and tested new, human-centered policies. Building on what other cities had learned allowed St. Louis to springboard forward instead of getting stuck reinventing wheels. Second, she brought together policy and processes, applying people-centered design to the rules that governed services and the delivery of them. By building connective tissue between policy, process, and people, Jones was able to built new trust in old institutions to deliver real change impacting residents’ lives.


Justin King, policy director of the family-centered social policy program at New America, where I did research, has spent his career working on issues at the intersection of children’s lives and government policies. “Tishaura and Jose before her are reinventing what’s possible inside government,” he says. “People see the state and municipal government, in a lot of cases, as a predator on them and their communities . . . [Their work] is against the tide. It is really positive and really innovative and really worth talking about.”

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Economists: Improve the Economy by Empowering Workers

economic chart

Attacks on unions isn’t anything new, even when workers are asking for safer conditions or a little job security. What is new is that economists are starting to realize that we need stronger worker groups to advocate for labour or the economy as a whole suffers. Over the last few decades we’ve witnessed the rise of massive corporations that bully governments and workers; inevitably this process will gut the productive parts of planet (with fantastic short-term gains!). So, if we want our economy to do well for decades on end we need to ensure that all people involved in it get a share of the benefits.

A complementary approach would be to increase workers’ power. Historically, this has been most effectively done by bringing more workers into unions. Across advanced economies, wage inequality tends to rise as the share of workers who are members of unions declines. A new paper examining detailed, historical data from America makes the point especially well. Henry Farber, Daniel Herbst, Ilyana Kuziemko and Mr Naidu find that the premium earned by union members in America has held remarkably constant during the post-war period. But in the 1950s and 1960s the expansion of unions brought in less-skilled workers, squeezing the wage distribution and shrinking inequality. Unions are not the only way to boost worker power. More radical ideas like a universal basic income—a welfare payment made to everyone regardless of work status—or a jobs guarantee, which extends the right to a government job paying a decent wage to everyone, would shift power to workers and force firms to work harder to retain employees.

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Need a Job? Let’s Give Jobs to Everybody!

Interview

Underemployment runs rampant in too many sectors of our economy; and this contributes to a long-term unsustainable economic system. For example, people born in the 1980s are now the brokest generation since the Depression (for reasons why see this post). With these problems in mind, some thinkers are calling for a radical solution by providing jobs to anybody who wants one. It’s like universal income but for work.

To advocates, the payoff from this kind of program would be immense: In a single stroke, the government could not only eliminate involuntary unemployment but also alter the private job market. The wages and benefits at guaranteed public jobs would effectively set a floor for private employment. With more workers fully employed at higher wages, there’d be less demand for social services like food stamps. And although the program would require a significant initial investment, it would ultimately spur economic growth, as workers go out and spend their new paychecks.

Advocates of a jobs guarantee are clear on the need for on-the-ground leadership. The CBPP plan calls for federal administrators of a jobs guarantee program to work closely with state and local governments, and it advises that project proposals be developed “in conjunction with community leaders, local government officials, labor organizations, and local residents.”

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Worker-Owned Companies can Save Capitalism

conversation

We’re all well aware of the harm caused by the box-box retailers on local communities and their international suppliers; indeed, the people hurt the most are the workers. As a result of the pressures of large multinational corporations mixed with poor working conditions an old solution is gaining new traction. Worker-owned corporative corporations help deal with the profit-focused multinationals by empowering workers to be focussed on the economic sustainability of the company. Worker-owned co-ops are brewing in popularity amongst employees and entrepreneurs who don’t want the companies they built to fail.

“We are in a wave of growth right now,”, Hoover says. Worker-owned cooperatives, she says, have undergone several major “waves” over the last 40 years, each fueled by a different goal. In the 1970s, many newly formed cooperatives were tied to people desiring a counter-cultural lifestyle outside of traditional economies, but today, Hoover observes that more co-ops are being formed in response to economic stressors. “People don’t feel secure at their jobs anymore, and having ownership of something gives them security,” Hoover says. And some aging baby boomers implement co-op models as a way to keep their businesses open after retirement — by transferring ownership to employees.

Similar cooperatives have secured comparable benefits for staff. Whereas the state of Oregon’s minimum wage is $10.25 an hour, Blue Scorcher offers a flat wage of around $15 to $16 per hour including tips. At Austin’s Black Star Co-op brewery, employees start at around $12 per hour and receive pay increases after three months to $13.10 per hour — nearly twice the state’s standard minimum wage. Employees can pursue additional raises if they work towards a role on the managerial-level governing body called the Workers Assembly, which comprises roughly half of the brewery staff. In addition to the living wage, Black Star gives all employees paid time off, and staffers, regardless of their leadership role, are also empowered in the decision-making process. “We operate democratically, so there’s no one person making decisions,” says Black Star business team leader Jodi Mozeika.

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