(Photo: AP/Pablo Martinez Monsivais)
Welcome to The American Prospect's weekly roundup highlighting the best reporting and latest developments in the labor movement.
(Compiled by Justin Miller-Edited by Harold Meyerson)
The DOL's Final Push
On Wednesday, Labor Secretary Tom Perez will unveil the final version of the embattled new fiduciary rule, which would require brokers to act in their client's financial interest when advising on retirement investment.
The announcement will be the latest in a string of long-awaited worker-friendly rulemakings that the Department of Labor has pushed out in the fourth quarter of President Obama's second term, despite categorical opposition from a vocal big-business lobby.
Obama's Department of Labor has been advocating for a series of labor reforms through the bureaucratic channels since his first term, but it's been a long schlep. Obama first introduced the fiduciary rule in 2010, but the initial version was scrapped and rewritten in the face of intense protests from the financial industry.
Late last month, the DOL released a new rule strengthening workers' exposure limits to dangerous silica dust. That rule had been 40 years in the making, and down to the last day the construction-trades industry was lobbying the administration to loosen up on the exposure limits. Days before that, the agency issued its long-awaited "persuader" rule that requires companies to publicly disclose when it hires union-busting consultants.
Other actions include a bold new guidance on employee misclassification that could prompt employers to rely less on independent contractors, as well as a new mandate on federal government contractors to provide (more than 800,000) workers with one week of paid sick leave each year.
The next hurdle that the DOL must clear after the fiduciary rule is promulgated will be to safeguard the Obama administration's heralded new overtime rule, which proposes to dramatically raise the income threshold for overtime eligibility, potentially covering millions of new workers. Republicans in Congress have attempted to rollback the scope of the rule and special-interest pushback has been heated. The DOL is focused on finalizing the language of the rule and the implementation timeline has been moved back toward the end of 2016.
The overtime rule, if successful, will be the DOL's hallmark achievement-so count on a full-court press from the administration to ensure its safe passage in the coming months.
Looking back, the burnished activist streak at the DOL will be a major boon for Obama's legacy on labor issues, which critics say is tarnished by his push to pass the Trans-Pacific Partnership trade deal.
Fifteen's Feasibility
With great minimum wage increases comes great uncertainty from liberal economists. That's the theme that's emerged since California and New York reached political deals to incrementally raise their minimum wages to $15 an hour.
While liberal economists agree that high-wage economies in major cities can absorb the costs of a $15 minimum wage, many are worried about the impact that such an increase would have on low-wage economies in smaller cities and towns. And that's now the reality that the new statewide hikes have ushered in.
Some argue that uncertainty requires caution. "Although the plight of low-wage workers is a national tragedy, the push for a nationwide $15 minimum wage strikes me as a risk not worth taking," Princeton economist Alan Krueger wrote in a New York Times op-ed late last year, "especially because other tools, such as the earned-income tax credit, can be used in combination with a higher minimum wage to improve the livelihoods of low-wage workers."
Others argue that decades of wage stagnation warrant ambitious increases. "The fact that these proposals are outside the bounds of recent experience does not automatically make them ill-conceived," Economic Policy Institute's Larry Mishel and David Cooper wrote. "Moving beyond the timidity of most recent minimum wage hikes is exactly what is needed if we are to undo decades of falling wages and deteriorating living standards for the lowest-paid third of America's workforce."
The divide on the left has popped up in the Democratic presidential primary as well-though with starker lines.
Hillary Clinton aligns with the liberal economic consensus by pushing a more modest $12 federal minimum, allowing cities and states to pass $15 minimums as they see fit. Bernie Sanders, on the other hand, calls for a $15 federal minimum, arguing that such an increase is a critical tool in decreasing income inequality.
The risk of job losses is the primary point of criticism for those opposed to $15. But economics professor David Howell argues in the Prospect that with these new wins, it's time to shift the minimum-wage policy debate away from job loss.
"Why isn't a $15 minimum wage in 2021 or 2022 worth the risk?" Howell asks. "How should we compare the costs of the very uncertain possibility of some loss in mostly very high turnover jobs, against the certainty of additional demand-driven increases in employment, the certainty of reduced pressure on public budgets to fund social assistance for working poor families, and above all the certain wage benefits, which in the case of New York state and California, would provide substantial income gains for over one-third of the workforce?"
"In short, raising the federal statutory minimum wage is easily worth the risk," Howell continues. "The criterion for setting the appropriate level of the minimum wage is not a No Job Loss standard. It is a Minimum Living Wage (MLW) standard. And it is hard to imagine that the MLW could be less than $15 in 2016, even in low-cost-of-living, non-metropolitan America."
In the next few years, California and New York's wage hikes will provide data that could potentially shift the center-left establishment consensus on the minimum wage from $12 to $15, and further, away from the job-loss specter and toward a living-wage standard.
