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Compensating Differential Effecting The Labor Market and Wages  

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Compensating Differential Effecting The Labor Market and Wages  

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Licensing Requirements Effecting The Labor Market and Wages  

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Licensing Requirements Effecting The Labor Market and Wages  

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licensing requirements decrease labor supply, thereby raising the wages of those who do get licenses.

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Instructions:  View instructions on the section padlet.

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Instructions:  View instructions on the section padlet.

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Team:  Students will do one chapter per section.  View your assigned padlet at this link.

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Team:  Students will do one chapter per section.  View your assigned padlet at this link.

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Human capital - accumulated knowledge and skills that make a worker more productive.

Signal – action taken to convey information that is hard to verify

Efficiency wage – a higher wage paid to encourage greater worker productivity. Can reduce turnover and increase worker effort.

When it is hard or costly to monitor worker productivity, employers often pay a higher wage.

Compensating differentials- a difference in wages to offset the undesirable aspects of a job

People with similar human capital earn different wages.

Higher pay for more unpleasant jobs.

Depends on preferences of other workers.

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Discrimination: Treating people differently based on characteristics such as their gender, race, ethnicity, sexual orientation, religion, disability, social class, or other factors.

Some wage differences are due to differences in human capital – others may be discrimination

Discrimination can cause occupations to be underpaid, some traditionally female-dominated jobs

Types of discrimination:

Prejudice - A preconceived bias against a group that's not based on reason or experience.

Implicit bias – attributing particular qualities to members of specific groups

Statistical discrimination – using average characteristics of a group to make inferences about an individual

Prejudice is costly to employers because since it limits the pool of talent available. More productive workers may be overlooked.

The source of discrimination can be employers, customers, or co-workers.

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Gender wage gap – difference in pay between women and men.

Women make 20% less, partly because:

Women tend to work fewer hours and weeks, partly due to family obligations.

More likely to take time away from work for childbirth or family care.

Women may choose lower paying jobs because of discrimination. Lower pay but less hostility.

Taking these into account, women are paid 8 - 9% less than men.

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(WXYZ) - Starting on January 1, Michigan's minimum wage will move up to $9.87 per hour from $9.65 per hour, that's an increase of 22 cents.

That's not all, in the new year, the tipped minimum wage will go up from $3.67 to $3.75 per hour and the rate for minors who are 16 or 17 is also increasing from $8.20 to $8.39 per hour. Once again, only adding a few extra cents to a Michigander's wallet.

But with the current inflation rate and price increases on goods and services, who will feel the heat? And most importantly, what's the solution?

"We are a one-income family, my husband works so it's a struggle for us and you know we just try to live within our means. But no, 22 cents will not make a difference," said Kimberley Williams.

Williams, a mother of three, is frustrated with Michigan's minimum wage still under 10 dollars, leaving her family to cut corners just to make ends meet.

"We try not to overeat," she said.

After wages were stagnant in Michigan at $7.40 for a couple of years, in 2014, the state passed a law to raise its minimum wage annually, until it reaches $12.05 by 2031.

Financial expert Rick Bloom says this will be a challenge for many low-income earners.

"You are talking about an increase of less than $500 for the year and unfortunately, we've seen inflation take off for the last year, look at the price of gas, just getting to work is a lot more expensive today," said Bloom.

According to the Federal Consumer Price Index, inflation has gone up by 6.2% in the past 12 months, meaning prices are rising 2.5 times faster than Michigan's minimum wage.

But after post-COVID-induced lockdowns, more and more employers have been sweetening the deal by offering more money, so who does the minimum wage really impact?

Economist Paul Traub says they are students, young adults in the service and hospitality industry as well as unskilled workers.

"Our young adults and labor force are the bedrock of our economy, yet we have done a lot to minimize their success," said Traub.

Besides Michigan, in 2022 there will be only four other states that will still have a low minimum wage after legislative increases: Pennsylvania at $7.25, Montana, at $9.20, Ohio at $9.30, and Nevada at $9.50 for employees who receive health benefits.

"I think one of the confusions ... is that minimum wage is different than a living wage, you know living wage, what it costs someone to live, for a single person that would be close to 13 to 14 dollars an hour," said Bloom.

But there is still hope in the new normal. For instance, entrepreneurs like Joe Renkiewicz are happy to offer better pay packages as they understand the value of hard-working employees.

"Once we opened full time, we are still back to 31 hours, when unemployment stopped, we continued to pay our employees for 40 hours of work. We increased their salary and their commission," said Renkiewicz.

Minimum Wage and Overtime by WXYZ-TV Channel 7 Detroit on Scribd

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Michigan minimum wage increasing 22 cents as workers struggle to make ends meet amid rising prices

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(WXYZ) - Starting on January 1, Michigan's minimum wage will move up to $9.87 per hour from $9.65 per hour, that's an increase of 22 cents. That's not all, in the new year, the tipped minimum wage will go up from $3.67 to $3.75 per hour and the rate for minors who are 16 or 17 is also increasing from $8.20 to $8.39 per hour.

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Technology makes it easy for the best to reach millions of customers.

The best performers capture a large share of market, vary high pay.

Slightly less skilled get little or no share.

Winner-take-all occupations include actors, authors, and athletes.

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Minimum Wage Effecting The Labor Market and Wages 

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Minimum Wage Effecting The Labor Market and Wages 

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Opponents of a higher minimum argue that setting the minimum wage too high will lead to unemployment, which is even worse than a low-wage job. Proponents of a higher minimum wage argue that many workers earn low wages because they lack bargaining power.

Economists have conducted hundreds of studies to try to evaluate the effects of raising the minimum wage, and there’s an ongoing debate about the evidence. On average these studies show that a higher minimum wage reduces employment, but quite a few studies show that this effect is quite small, and in some cases it may be barely detectable. However, there are also studies suggesting that the longer-run effects may be larger than what we see in the short run, since it can take a while for businesses to adapt to the higher cost of workers. Whether the minimum wage has small or large effects on employment depends on the elasticity of labor demand. The evidence so far suggests that labor demand is relatively inelastic, but it becomes more elastic over time.

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Unions Effecting The Labor Market and Wages 

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Unions Effecting The Labor Market and Wages 

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The logic of unions is that when workers band together they have more bargaining power and can push for a better deal. Effectively, the union is working to raise the wage at which their members are willing to supply labor.

On average, unionized workers earn 10 to 20 percent more than a comparable worker in a comparable non-union job. However, only around 11% of U.S. workers are unionized.

Managers often resist unions because they’re worried that the greater bargaining power of workers might reduce their profits. But by providing a voice for their members, unions can improve communication between management and workers, allowing for an increase in efficiency

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A business using its bargaining power as a major buyer of labor to pay lower prices, including lower wages. A monopsony is the only buyer of a good, similar to a monopoly, the only seller of a good. Examples include the federal government being the dominant buyer of labor in Washington, DC.; universities being the main employer in towns like Ann Arbor, Ithaca, and Chapel Hill; tech companies like Google, Meta, and Apple hire tech talent in Silicon Valley.

Monopsony power affects whether minimum wages hurt employment. If monopsony power is holding down wages, then minimum wages that push companies to pay higher wages won’t necessarily lead to less employment. Instead, these laws might simply ensure that workers get a better deal from their bosses.

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1. Labor demand and human capital
2. Labor supply and compensating differentials
3. Institutional factors
4. Discrimination

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Labor Demand: What Employers Want What skills do businesses want from workers?

Labor Supply: What Workers Want How do wages depend on the characteristics of the job?

Institutional Factors That Explain Why Wages Vary  How do regulations and institutions shape wages?

How Discrimination Affects Wages How does discrimination affects outcomes in the labor market?

Personnel Economics How do smart employers get their workers to do more with less?

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General skills: skills useful to many employers. Because these skills are portable to other companies, it is seen as a bad invest for a company to pay the cost of general skills training when the benefits could end up at other companies.

Job-specific skills: skills that are only useful in a job with one particular employer. Because these skills are specific to a company, they won't help the the workers of that company find a better job elsewhere.

There is an additional benefit of offering training to your employees. It doesn’t just make your workers more productive, it also attracts a specific type of worker to your company—those who are motivated to learn new things and who want to advance in their field.

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Linking the income a worker earns to the quality of their performance. Examples include commissions, piece rates, bonuses, or promotions.

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Extrinsic motivation: the desire to do something for its external rewards such as higher pay.

Intrinsic motivation: the desire to do something for the enjoyment of the activity itself.  Poorly designed incentives can undermine intrinsic motivation

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Different types of discrimination and percents

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Different types of discrimination and percents

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What is employment discrimination from the EEOC

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What is employment discrimination from the EEOC

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You may be familiar with the word "discrimination." But do you know what it really means? And do you understand how it applies in the context of your job?

To "discriminate" against someone means to treat that person differently, or less favorably, for some reason. Discrimination can occur while you are at school, at work, or in a public place, such as a mall or subway station. You can be discriminated against by school friends, teachers, coaches, co-workers, managers, or business owners.

The EEOC is responsible for protecting you from one type of discrimination - employment discrimination because of your race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, disability, age (age 40 or older), or genetic information. Other laws may protect you from other types of discrimination, such as discrimination at school.

The laws enforced by EEOC protect you from employment discrimination when it involves:

Unfair treatment because of your race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, disability, age (age 40 or older), or genetic information.

Harassment by managers, co-workers, or others in your workplace, because of your race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, disability, age (age 40 or older), or genetic information.

Denial of a reasonable workplace change that you need because of your religious beliefs or disability.

Improper questions about or disclosure of your genetic information or medical information.

Retaliation because you complained about job discrimination or assisted with a job discrimination proceeding, such as an investigation or lawsuit.

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You may be familiar with the word "discrimination." But do you know what it really means? And do you understand how it applies in the context of your job?

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Article about gender discrimination in the workplace

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Article about gender discrimination in the workplace

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About four-in-ten working women (42%) in the United States say they have faced discrimination on the job because of their gender. They report a broad array of personal experiences, ranging from earning less than male counterparts for doing the same job to being passed over for important assignments, according to a new analysis of Pew Research Center survey data.

The survey - conducted in the summer before a recent wave of sexual misconduct allegations against prominent men in politics, the media and other industries - found that, among employed adults, women are about twice as likely as men (42% versus 22%) to say they have experienced at least one of eight specific forms of gender discrimination at work.

One of the biggest gender gaps is in the area of income: One-in-four working women (25%) say they have earned less than a man who was doing the same job; one-in-twenty working men (5%) say they have earned less than a female peer.

Women are roughly four times as likely as men to say they have been treated as if they were not competent because of their gender (23% of employed women versus 6% of men), and they are about three times as likely as men to say they have experienced repeated small slights at work because of their gender (16% versus 5%).

There are significant gaps on other items as well. While 15% of working women say they have received less support from senior leaders than a man who was doing the same job, only 7% of working men report having a similar experience. One-in-ten working women say they have been passed over for the most important assignments because of their gender, compared with 5% of men.

The survey, which was conducted July 11-Aug. 10, 2017, with a nationally representative sample of 4,914 adults (including 4,702 who are employed at least part time), also asked about sexual harassment in a separate question. It found that while similar shares of women and men say sexual harassment is at least a small problem in their workplace (36% versus 35%), women are about three times as likely as men to have experienced it personally while at work (22% versus 7%).

In more recent surveys conducted by other organizations, the share of women reporting personal experiences with sexual harassment has fluctuated, depending in part on how the question was asked. In an ABC News/Washington Post survey conducted Oct. 12-15, for example, 54% of women said they have received unwanted sexual advances from a man that they felt were inappropriate whether or not those advances were work-related; 30% said this had happened to them at work. In an NPR/PBS NewsHour/Marist poll conducted Nov. 13-15, 35% of women said they have personally experienced sexual harassment or abuse from someone in the workplace.

The Center's survey asked about sexual harassment specific to the workplace. The survey was conducted as part of a broader forthcoming study on women and minorities in science, technology, engineering and math (STEM) fields.

Differences by education

Among employed women, the share saying they have experienced sexual harassment in the workplace is roughly similar across racial and ethnic, educational, generational and partisan lines. But when it comes to specific forms of workplace discrimination tested in the survey, there are significant differences among women that are rooted mainly in their level of education.

Women with a bachelor's degree or more education report experiencing discrimination across a range of items at significantly higher rates than women with less education. And in some regards, the most highly educated women stand out. While 57% of working women with a postgraduate degree say they have experienced some form of gender discrimination at work, for example, the same is true for 40% of women with a bachelor's degree and 39% of those who did not complete college.

Roughly three-in-ten working women with a postgraduate degree (29%) say they have experienced repeated small slights at work because of their gender, compared with 18% of those with a bachelor's degree and 12% with less education. Similarly, working women with a postgraduate degree are much more likely than their less-educated counterparts to say they have received less support from senior leaders than a man doing the same job (27% of postgraduate women, compared with 11% of women with bachelor's degrees and 13% of women with less education). The pattern is similar when it comes to being passed over for promotions and feeling isolated at work.

When it comes to wages, working women with a bachelor's degree or more are much more likely than those with less education to say they have earned less than a man who performed the same job. Women with family incomes of $100,000 or higher stand out here as well - 30% of them say they've earned less than a man who was doing comparable work compared with roughly one-in-five women with lower incomes (21%). But overall, women with higher family incomes are about equally likely to have experienced at least one of these eight forms of gender-based discrimination at work.

There are differences by race and ethnicity as well. While roughly half of employed black women (53%) say they have experienced at least one type of gender discrimination at work, fewer white and Hispanic women say the same (40% for each group). One area in particular where black women stand apart is in their reporting of having been passed over for the most important assignments because of their gender - 22% of employed black women say this has happened to them, compared with 8% of whites and 9% of Hispanics.

Women's experiences with discrimination in the workplace also differ along party lines. Roughly half (48%) of working Democratic women and Democratic-leaning independents say they have experienced at least one form of gender discrimination at work, compared with a third of Republican and Republican-leaning women. These party differences hold up even after controlling for race. The partisan gap is in keeping with wide party differences among both men and women in their views of gender equality in the U.S.; a separate 2017 Pew Research Center survey found Democrats largely dissatisfied with the country's progress toward gender equality.

About the survey: These are some of the findings from a survey conducted among a nationally representative sample of 4,914 adults, ages 18 and older, from July 11-Aug. 10, 2017. The survey, which was conducted online in English and in Spanish through GfK's Knowledge Panel, included an oversample of employed adults working in science, technology, engineering and math-related fields. The margin of sampling error based on the 4,702 employed adults in the sample is plus or minus 2.0 percentage points. The margin of sampling error based on the 2,344 employed women in the sample is plus or minus 3.0 percentage points. See the for exact question wording.

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Gender discrimination comes in many forms for today's working women

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American women who say they have faced discrimination on the job because of their gender report a broad array of personal experiences.

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Podcast about discrimination in the workplace

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Podcast about discrimination in the workplace

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In this episode of The Forum Podcast, Ashley Oolman (Lifeworks) leads listeners through a discussion about how disability status may not be as protected as other classes in the workplace.

Though there are laws dating back to 1938 ensuring access to resources, employment, and equal rights, people with disabilities experience discrimination in overt and profound ways especially when contrasted with other protected classes. From interviewing and hiring programs to disclosure and accommodations, explore how you and your organization can put an end to common practices continuing to have a disproportionate and discriminatory impact on employees with disabilities right in front of us.

Learning Outcomes

Contrast scenarios with other protected classes to examine the pervasive issue of disability discrimination

Examine existing laws in place to prevent cycles of unemployment and poverty amongst the disability community

Review best practices and common etiquette to ensure disability inclusion

Episode Resources

Handout - Overt Discrimination in the Workplace Questions and Resources

Sponsored by

Transcript
Overt Discrimination in the Workplace- Disability and the Law
Intro: [00:00:00] The Forum on Workplace Inclusion podcast is sponsored by US Bank. Embracing what makes us unique creates more possibilities for all. Learn more at usbank.com/diversity US Bank member FDIC equal housing lender.

[00:00:12] You're listening to The Forum on Workplace Inclusion podcast. We get to engage people, advance ideas and ignite change because the generous support from our community. If you find our resources meaningful or valuable, please consider supporting the Forum today. Visit forumworkplaceinclusion.org/donate that's forumworkplaceinclusion.org/donate. Thank you very much for your support and generosity.

[00:00:35] Nominations are now open for our 2021 diversity awards. The diversity awards program recognizes individuals or organizations showcasing exemplary insight and fortitude in the area of workplace diversity, equity and inclusion. Know someone that you'd like to nominate. Visit forumworkplaceinclusion.org, and submit your nomination today.

[00:00:56] With that I'd like to say thank you to all our listeners and subscribers. You help support the growth of the podcast and reach new listeners. If you like what you're hearing on the Forum podcast, please consider writing a review on Apple podcasts or wherever you listen to your podcasts. If you've already written a review. Thank you. Please consider sharing our podcast with a friend, family member or a colleague you think might find value in the content. Word of mouth is the best way the Forum grows. So thank you very much for listening and sharing. Thanks again. And enjoy the show.

[00:01:27]

Benjamin Rue: [00:01:27] Hello and thank you for joining us for today's podcast, Overt Discrimination in the Workplace with Ashley Oolman - she,her - of LifeWorks and Allied Folk.

[00:01:37] This session will lead listeners through a discussion about how disability status may not be as protective as other classes in the workplace, though, there are laws dating back to 1938, ensuring access to resources, employment, and equal rights. People with disabilities experience discrimination in overt and profound ways, especially when contrasted with other protected classes.

[00:02:02] From interviewing and hiring programs to disclosure and accommodations explore how you and your organization can put an end to common practices, continuing to have a disportionant and discriminatory impact on employees with disabilities right in front of us.

[00:02:17] This podcast we'll contrast scenarios with other protected classes to examine the pervasive issue of disability discrimination. Examine existing laws in place to prevent cycles of unemployment and poverty amongst the disability community and review best practices and common etiquette to ensure disability inclusion.

[00:02:39] Ashley Oolman, disability inclusion manager at LifeWorks, and also founder and inclusion consultant of Allied Folk guides, partners through evidence-based best practices, product developmentand progressive thought leadership. From large corporations to individual allies. She transforms strategic business initiatives and advances equitable community spaces. With more than a decade of leadership experience and advocacy, employment, and workplace culture. She understands how to navigate complex environments and provide actionable insights for growth.

[00:03:12] Ashley strives to advance community equity through her contributions on collective impact task force and serves on a coalition of providers supporting transracially, adopted youth to reinforce their development of positive black identity and in her free time, she enjoys creating space to coach local parents on inclusive parenting, including children and critical conversations.

[00:03:37] Ashley gained an MBA with a concentration on human resource management, a BA in psychology with a minor in human development and family studies and a certification in organizational diversity and inclusion. Most recently, Ashley was elected as a Josie R Johnson Leadership Academy fellow and completed the YWCA's Racial Justice Facilitator program.

[00:04:03] She has committed to inclusion as a means to advance human rights for all people in all walks of life.

[00:04:11] Ashley Oolman: [00:04:11] Well, hello listeners. And thank you so much for joining me today. As Ben mentioned, my name is Ashley. I identify with she, her pronouns and I am a black neurodivergent woman from Minneapolis, Minnesota.

[00:04:23] My professional journey with a learning disability and the ways in which my mind interacts with the world around me is one of the reasons why I am so passionate about this topic. I know firsthand what it feels like to be misunderstood, underestimated, and counted out. And for that reason, I hope I'm able to make this message connect with you all on a personal level, too.

[00:04:43] The topic of this episode is disability employment law through exploration of compliance and how inclusion goes beyond policy. Together we'll uncover some of the ways ableism shows up on the job before the end of our time. We'll contrast scenarios with other protected classes to examine the pervasive issue of disability discrimination.Examine existing laws in place to prevent cycles of unemployment and poverty amongst the disability community and review best practices and common actions to ensure disability inclusion.

[00:05:16] My goal is that every listener will leave feeling determined to uproot problematic areas in their own workplace to end the legacy of ableism and disability based discrimination.

[00:05:26] So to kick it off, let's begin with reflection. I'm going to ask you a few questions. These are about you and your experiences in the workplace. Say your answers out loud, if you can.

[00:05:37] First, have you ever worked with a colleague with a disability?

[00:05:43] Have you ever had a supervisor with a disability?

[00:05:47] Do you know about accessibility at your workplace?

[00:05:50] And last, do colleagues talk openly about their disabilities at work?

[00:05:56] These are all important to note because they are questions that start to unravel the degree to which ableism has permeated our own workplace. How many questions were you able to answer? Yes. More critical to consider is what is happening to cause so many of us to answer no to working with, or being supervised by people with disabilities.

[00:06:18] And then digging in even farther. Isn't it strange that we don't often think or talk about disabilities on a consistent basis, considering that one in four US citizens have a disability. By the way, in case you weren't aware that one in four stat includes apparent and non-apparent disabilities, such as depression, ADHD, and chronic health conditions.

[00:06:41] Benjamin Rue: [00:06:41] Thank you so much, Ashley. It's so important to take time for reflection before beginning an important conversation, especially one on something that affects so many people, myself included, you know, withnon-apparent disability myself. Can you talk a little more about some problematic ways that discrimination or inaccessibility impacts people's lives?

[00:07:04] Ashley Oolman: [00:07:04] Absolutely. So simply stated there are tremendous gaps in the landscape of disability employment. For example, taken from data gathered nationwide in 2018 for the American community survey. These are some of their staggering findings for education attainment. 15% of people with disabilities have a BA or higher bachelor's degree. Or higher compared to 30% of people without disabilities.

[00:07:31] In the area of employment. 37% of people with disabilities are employed versus people without disabilities who are employed at a rate of 80%. The average household income is $46,900 per year, for people with disabilities versus $74,400 per year for people without.

[00:07:51] Benjamin Rue: [00:07:51] Wow.

[00:07:52] Ashley Oolman: [00:07:52] I know. I know. And then finally, regarding poverty, 26% of people with disabilities live below the poverty line versus only 10% of people without.

[00:08:03] So to recap, people without disabilities are two times more likely to attend college. And two times as likely to be employed on the flip side, people with disabilities make approximately $28,000 less per year, and are more than two times as likely to live below the poverty line.

[00:08:24] So likely, Ben, you find the data as upsetting as I do. And I can promise that the more you dig, the more you'd find. For me of the hardest hitting notions,attitudinal bias is the highest reported and most significant barrier to obtaining employment. So to be clear, not a person's real or perceived limitations, but what other people think of them?

[00:08:46] Benjamin Rue: [00:08:46] Wow, you're right. That, I mean, that is really upsetting data like mindblowing, but how's that how's this even possible. I know, I know there are laws in place to prevent this. Can you give an overview?

[00:08:59] Ashley Oolman: [00:08:59] Yeah, of course, let's review a quick list of disability, employment laws in place that are intended to protect the rights of Americans with disabilities and ensure equal opportunity. So I only pulled three. There are quite a few, but some of, some of the most notable are the Rehabilitation Act of 1973, which prohibits discrimination on the basis of disability and programs conducted by federal agencies and programs receiving federal financial assistance in federal employment and in employment practices of federal contractors.

[00:09:35] The next one, which just actually had an anniversary 30 year anniversary this year is the Americans with Disabilities Act of 1990, and that is a civil rights law prohibiting discrimination against individuals with disabilities in all areas of public life, including jobs, schools transportation and all public and private places open to the general public.

[00:09:59] And then we also have The Workforce Innovation and Opportunity Act of 2014, which is designed to strengthen and improve our nation's public workforce system and help get Americans, including youth and those with significant barriers to employment, into high quality jobs and careers that help employers retain and hire skilled workers.

[00:10:21] So, you know, really this legacy of significant legislation yet on the employment side, we have this trail of noncompliance. By reviewing a timeline of disability discrimination charges filed each year. You would find between just 2010 and 2018, there was an average of 25-28,000 cases annually.

[00:10:44] So in less than 10 years, there were a quarter of a million disability discrimination cases alone

[00:10:50] Benjamin Rue: [00:10:50] With that bleak of a picture, it's even more important to know how this shows up in everyday interactions as well. Can give our listeners an overview of that and some examples of real life scenarios.

[00:11:03] Ashley Oolman: [00:11:03] Yes. Absolutely. Thank you for asking.

[00:11:05] So we know that law forbids discriminate when it comes to any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoffs, training, fringe benefits, and any other term or condition of employment.

[00:11:21]We also know that it's illegal to harass an applicant or employee because of they have a disability, had a disability in the past or is even believed to have a physical or mental impairment that is, that is not transitory and minor.

[00:11:35] So despite all that, Ben, disability discrimination totally shows up at work.

[00:11:40] Here are a few of those real life scenarios to help illustrate how.

[00:11:44] First up is restroom restriction, it's a commonoccurrence, if you digback into EEOC complaints and cases like that, that have been filed. It's essentially telling employees they can't relieve themselves when they need to, or refusing employees to take a break.

[00:12:02]Our first case to review is from 2017 in Kentucky, when an Amazon call center employee asked managers for flexibility in the company's break schedule. Essentially he needed to accommodate bathroom needs stemming from Crohn's disease, which is a painful chronic and unpredictable inflammatory bowel condition. Instead of giving him those breaks, the supervisor accused him of stealing time and he was fired.

[00:12:28] So I want to, in addition to just, you know, acknowledging that that is, an occurrence that is happening, and acknowledging, you know, that specific instance. I want to now pause for a moment and just do a comparison with another protected class. Can you imagine if an older employee, protected by law based on age, was accused of stealing time for needing to take frequent or sporadic bathroom breaks?

[00:12:51] Benjamin Rue: [00:12:51] No, of course not.

[00:12:53] Ashley Oolman: [00:12:53] I know it's so it's just kind of wild to when we pause for a moment and think about, you know, essentially the same laws that protect all protected classes and kind of how we interpret them differently based on the person or the situation, especially with the lens of disability inclusion.

[00:13:10] The next violation is career suppression, which is limiting employees right to work or advance in their career based on their disability. So our next case is from the year 2000, it happened in Wisconsin and the EEOC brought a suit against Chuck E Cheese, following unsuccessful efforts to resolve the case through conciliation.

[00:13:32] The lawsuit was filed in federal court based on an administrative finding that a regional manager fired an employee from his job as a janitor. After speaking that Chucky, excuse me, after stating that the employee did not hire quote, "those kinds of people." The firing took place, despite the vigorous protest of the restaurant's manager, who was the employee's immediate supervisor.

[00:13:56] So again, a little comparison. Can, can you imagine a regional manager using that same phrase and taking the same action? Let's say against a BiPOC employee in the year 2000.

[00:14:10] Benjamin Rue: [00:14:10] Yeah. I mean, it seems crazy, but look where we are.

[00:14:15] Ashley Oolman: [00:14:15] It's kind of like the, I think that's part of why I became so fascinated with this topic of kind of the compare and contrast with protected class. And, you know, the use of let's say it's derogatory language or, or whatever it might be. It's really fascinating when you start to kind of unpack and unravel some of the social, you know, the social norms. Those social, things that we've adhered to. So of course, you know, using, let's say racial slurs or saying if, if we were talking about a BiPOC employee and we said, you know, we don't hire air quotes, those kinds of people.

[00:14:47]I think we both. Can agree that that would be absolutely like unheard of unimaginable almost. With employees with disabilities, or let's say, people who are seeking employment with disabilities. It's a really common phrase. I've heard it myself in some of the non-profit work that I've done. You know, hearing employers say, well, we don't really have those types of jobs, and that's a totally loaded, a totally loaded phrase.

[00:15:10] Oh yeah, all this microagression.

[00:15:13] Oh, Absolutely, I totally agree. So moving into our third workplace scenario is accommodation denial, a common response hiring managers engage in when discussing the notion of hiring a person with a disability is speculating on the person's disability to get the job done or denying employee's need for an accommodation.

[00:15:35] So case in point in 2015, here in Minnesota, an employee requested a larger monitor at the cash register to accommodate vision issues she had related to diabetes, but she was simply sent home and her hours were reduced. Bath &Body Works corporate human resources department was contacted by the employee, but did not try to provide the larger monitor.

[00:15:59] Instead, the store manager bought a cheap magnifying glass and humiliated the employee by presenting it to her in front of her coworkers. And it, you know, the thing about that one too, is that, you know, when we, when we think about the right to disclose, you know, it's really up to each individual person/employee with a disability to make that decision for themselves, whether or not they are comfortable with disclosing, they feel it's necessary or, you know, simply they want to talk about that part of their identity at work. So of course, you know, we're violating that person's rights. To decide to disclose, but then digging further because in this case, you know, it's, it's about, Her health essentially. So we've also got protected health information, essentially being disclosed by the, by the manager's behavior as well.

[00:16:51] So quick comparison. Can, can you imagine a pregnant employee experiencing multiple changes to their body, essentially asking for a tool to ensure they can perform their job well?Only to be mocked for needing support based on the changes to their body.

[00:17:06]Of course not.

[00:17:08] NO, It's like. It's you know, this started as a project and since then, I have to be honest with you, Ben, it's turned into this fascination with, you know, how can we essentially have a law or multiple laws, you know, protecting the rights of, of employees and who they are and who they bring, you know, to work. And we, we say statements as you know, D E and I leaders about how we want people to bring their whole selves to work. And we want. You know, people that feel like they belong at work, but I think it's really, really important for us to understand how much nuance there is in essentially like the everyone's at the workplace or within the workforces ability to adhere to those norms or to, you know, uphold those beliefs or those kind of mantras. Depending on the employee that we're talking about.

[00:17:58] So my final scenario is about workplace bullying. And this is going, this is going to talk about how people with disabilities report, workplace bullying at a much higher rate than colleagues without disabilities. And before I move into this last example, I do want to give, the listeners a content warning.

[00:18:18] The repeated behavior that took place in this scenario is harmful and truly does show no regard for the employees dignity. So with that said, the case is from 2014 in Michigan, Herbruck hired a line worker who also has ADD and Tourette syndrome. The employee was harassed by her supervisor and coworkers because of her ADD and Tourettes. They referred to her by using several names and mocked the employees tourettes by biting their tongues and making exaggerated head movements.

[00:18:52] The employee complaint, of course, and rightfully so to her supervisor and to human resources as well. After doing so, unfortunately, the supervisors, mockery intensified, they th that person sped up the conveyor line where she worked to make her her job more difficult, began to follow the employee during bathroom breaks. Began to time the, the person's bathroom breaks and berated the employee for wasting time.

[00:19:21] Benjamin Rue: [00:19:21] Just awful.

[00:19:22] Ashley Oolman: [00:19:22] I know and the really unfortunate thing is it gets, it actually gets worse. So the supervisor eventually followed that employee into the bathroom and was waiting as she exited the stall, which to me is just absolutely unimaginable, you know,

[00:19:37] High school mean girl bullying.

[00:19:39] Absolutely. Absolutely. The supervisor then began to shout that the person or the, that the employee person needed to sign a disciplinary write-up and started jabbing their finger in that employee's face. So can you, I mean, I really can't imagine, you know, having my supervisor follow me into a private space, like the bathroom, and then, you know, as I'm trying to navigate my way to the sink to wash my hands, you know, they're, they're hollering at me in a way that I would, I would go as far to say likely make me feel physically unsafe at that point. yeah. And then, you know, to say like, you need to sign this. It's like, okay, that's really inappropriate. So then what happened,is that the employee fled the situation because of course I'm sure that they didn't feel, you know, very safe as that situation was escalating. And as everyone can imagine, they reported the incident to the human resources rep. Get this, the human resources representative told the employee that she could not be transferred to another position. And that nothing could be done to address her concerns until she returned to her shift. So basically what happened in the end was because of the intolerable working conditions, the employee just resigned and that day

[00:20:55] Benjamin Rue: [00:20:55] That's so just heartbreaking.

[00:20:57] Ashley Oolman: [00:20:57] I know. And the thing for me, Ben, is that it's 2014, right? Like we're not talking about, you know, I don't know, 30 years ago or 40 50 years ago. I mean, this is like really, really, I mean, really, really recent. So, so in 2014, the culture in this workplace was so fractured that this employee who simply just wanted to work was treated as though their value was absolutely meaningless.

[00:21:23] This example, obviously it doesn't really need a comparison to point out how drastic drastic the allegations are or how overt the discrimination was. So instead on this one, I would like to ask Ben, you and the listeners to ponder this. How long do we think it took for the workplace culture to get to a place where this behavior was accepted at so many levels within the organization? And then further if harassment to that degree was acceptable. I'm also curious how many less agregious violations were occurring that essentially led up to something, you know, this, this catastrophic.

[00:22:03] Benjamin Rue: [00:22:03] I, yeah, I can't imagine it's it's mind boggling. It's baffling. I it's just so sad. I am. There's nothing to compare it to.There's no comparison. Like you said, nothing like this would happen to any other protected group in the workplace.

[00:22:21] Ashley Oolman: [00:22:21] I know and, Oh, sorry, go ahead, Ben.

[00:22:24] Benjamin Rue: [00:22:24] I was just gonna say it, not even though this was, you know, six years ago now, but it's still very recent. It's still just a heartbreaking.

[00:22:31] Ashley Oolman: [00:22:31] Absolutely. I think the thing that, that, I don't know, something that kind of like came to mind as I was reading through that case in particular was again, you know, when we go back to the stats and the data, it takes people oftentimes. a longer time to get employed or to receive job offers because of disability, you know, discrimination and bias barriers, just, just upon entry. And so, you know, again, as a person, myself with an unseen or non apparent disability, you know, it's just, it's so. And this particular scenario, the employee in addition to Tourette's was neurodivergent like myself as well. So it's like, I, on some levels I can relate and it's it's, I just can't imagine, you know, after getting employed and of course we all have been there right. Where we get a new job and we're like, Hazzah, I made it!You know, I've got to, to kind of be met with that type of, bullying. And I would go as far to say, I mean, like workplace abuse, you know, that's, that's pretty, pretty catastrophic.

[00:23:34] Benjamin Rue: [00:23:34] So, I mean, following someone into the bathroom, that's I that's, I mean, it's just so overwhelming to dig into just how disability discrimination shows up. Even though there are laws in place to prevent this, like, how does this cycle continue?

[00:23:49] Ashley Oolman: [00:23:49] Yeah. So though, a person can take steps to fight for their rights under the ADA, a person must first take, what's make what's called a prima facie case. So in this type of suit, like a disability discrimination suit, prima fasci is referring to the evidence the employee must present to move the case forward. So what that means is that the burden of proof is with the employee to prove discrimination, took place in order for something to progress.

[00:24:19] Benjamin Rue: [00:24:19] Wow.

[00:24:20] Ashley Oolman: [00:24:20] Yeah. And that, I mean, that's not uncommon. There are, you know, that type of scenario is common in a lot of different cases. But I think that the more important thing I think. Is for us to pause and just kind of reflect, you know, let's say you're a person who you're, let's say you are the person that was in any of those scenarios that we talked through, you know, after you've experienced something like that, how, how much energy and how exhausting, you know, and how, how much, how much, you know, do you decide to put yourself through, to seek justice? And, you know, I think a lot of us, myself included. I could totally see myself just wanting to put it behind me because it was so traumatizing. And so, you know, that burden of proof in a scenario like that is pretty intense.

[00:25:04] Benjamin Rue: [00:25:04] That's a really strong person to, after dealing with something like that to them. Try to continue it.

[00:25:11] Ashley Oolman: [00:25:11] Absolutely. Absolutely. I want to close this section with a critical topic. it's a good time to talk again a little bit more about disclosure. So according to the Harvard business review, only 39% of employees with disabilities disclose that with their employer based on the cases that we just reviewed. I think we can begin to draw our own conclusions as to why a person may not want to disclose their disability at work.

[00:25:39] Remember, one of the most significant barriers to employment that is reported is what non-disabled people think, believe and how they act towards people with disabilities.

[00:25:50] Benjamin Rue: [00:25:50] That is such an amazing point. I know I struggled, with deciding on when and how to disclose it to my, to my, to the team, even though I have the best team in the world, it's still very difficult. Something to feel difficult with to come forward to about, but I'm very glad I did. And they've been extremely supportive and I mean, I know I'm very fortunate, so thank you Forum.But I also want to encourage any, you know, those with unseen disabilities, or you have to just. It helps so much. Much like coming out.

[00:26:22] Ashley Oolman: [00:26:22] I agree. I totally agree. And it's like the interesting thing I think about it. and, and something that I would like the listeners to kind of sit with and take with them is what is our role in creating that climate? Right. For employees to feel like coming out or disclosing or however, you know, they view that moment, as something that will be received well and positive, you know, and, and, and celebrated, you know, I, I think one of the biggest things that I think we talk about a lot and can apply in this, in this type of situation is, you know, how do we. How do we make it beyond, you know, acceptable? How do we make it, celebrated and how do we, you know, kind of like calibrate our meetings and our trainings, you know, in our team culture to create that space for disabled employees to feel like not only they can be, you know, just be space, but also like lean into some of the ways in which the disabled, you know, parts of their identity and like the things, the ways that they have interacted with with having a disability, like bringing that innovation and that like tenacity and that like creative thinking and all of those things, should be, I think, you know, celebrated and, and really like incorporate it into the work that we do.

[00:27:37] Benjamin Rue: [00:27:37] Well that, statement, Perfectly leaned into my next question, which is gonna, sadly have to be one of the final ones as we begin to wind things down. But as you know, the, the theme of our 33rd annual conference in 2021 is Workplace Revolution from talk to collective action in that spirit. What can our listeners do, do moving forward?

[00:28:00] Ashley Oolman: [00:28:00] Oh, such a great question. Well, first, I'm going to answer your question with a question for listeners. So listeners, I guess it's a rhetorical question.

[00:28:09] How are you doing, with all of that, that we just talked through, you might be feeling disbelief, confusion, maybe even disgust. The good news is there are quite a few. Quite a few things that we can do. And so I'll talk about what, what that is and how we can really start to make our mark and disrupt that pattern of discriminatory policies and practices.

[00:28:30] So a quick breakdown, easy do's and don'ts in the area of workplace culture to ensure belonging. So first let's start off with the shoulds. You should recognize disability as the intersectional community/identity that it is. Create an environment that's supportive of human variation in general and ensure that everyone's success is a priority.

[00:28:54] So no more of that kind of like if you've heard the 80/20 rule kind of a thing, like we want to, we want to shoot for all, you know what I mean? We wanna, we wanna aim for everyone being able to be successful and, and, you know, thrive in the workplace. Yes.

[00:29:09] And then on the flip side, the should nots or the don'ts don't use fluffy language, that, that essentially, makes it comfortable for non-disabled people to use.

[00:29:20] So an example of that would be like, Special, you know, special abilities or, you know, we hear all sorts of yeah. Terminology and you know, that's not too, that's not too, like downplay, you know, the, the intentions of why groups like that, or, or labels like that. Right. Or groups like that might be. In existence.

[00:29:40] But I think the, the really important question, if, if you work in a place that has something like that happening, or, or in place who created that label, was it people/employees with disabilities themselves or was it non-disabled employees that created, you know, essentially created that fluffy, more comfortable terminology, which is essentially like, it's a signal that you're not comfortable yet to talk about disabilities and having disabilities exist at work.

[00:30:07]A couple more don'ts. Don't separate working space or assignments based on ability. So for example, like all of, all of your employees, let's say it is with an apparent or seen disability leave, it should not be in a specific place or, you know, back to the comment I made earlier about "that kind of work" air quotes, you know, type of, don't have that type of work only be for certain types of people.

[00:30:33] You know, it shouldn't be, there shouldn't be jobs or titles or tasks based on, you know, people's ability or disability. and then another, the last don't that I have for today is don't ask people assumptive questions about their disabilities. So like avoid saying awkward or inappropriate things like, Oh, like did something bad happened? Was that an accident? You know? I suppose having ADHD, it's like really hard, you know, to concentrate. It's like, those are that's, that's really not something it's not the employee or your colleague's job to inform you. That's totally something we can Google, you know? So, yeah, those would be some of my don'ts.

[00:31:12] And then remember those four questions that we reflected on at the beginning. Here are a few tactical things that listeners can do that are targeting those areas that I was getting at.

[00:31:22] So the first question was, have you ever worked with a colleague with a disability? So going back, if you answered no check in with your workplace about your recruiting and your hiring practices and policies.

[00:31:35] For the next question. Have you ever had a supervisor with a disability if you answered? No. Similarly, check in with your workplace about your career progression and leadership development practices and policies. That's a pretty big signal if you don't have, you know, that goes for any marginalized group, really? Like if you don't have any. Lack leaders. If you don't have any disabled leaders, if you don't have, you know, whatever it might be, that's a pretty significant power dynamic or, or power. you know what I mean? Like for all of the dominant group to have leadership roles is a pretty important, I think, signal to be paying attention to.

[00:32:11] That third question was, do you know about accessibility at your workplace? If you did answer? No. I would encourage you to ask everyone you come in contact with until someone does then make sure that there's a discussion about where that information should be or should live so that it's more readily available to everybody.

[00:32:32] And then the last question, do colleagues talk openly about their disabilities at work if you answered? No. I highly recommend you connect with leaders in your organization to start to open up that dialogue about making those discussions safe at work. So again, kind of like how do we start to contribute and break down? You know, the, the barriers to that more inclusive climate that, that is necessary. I think for people to want to disclose that they have a disability.

[00:33:00] Benjamin Rue: [00:33:00] Wow. Thank you so much for that amazing list of do's and don'ts and actions that people can take. there are so many people with everything happening in the world, everything bad happening in the world right now, there's so many, so much good coming out and people really want to be able to take action and make the world better place for all their coworkers, their BiPOC, people disabilities, LGBT QA . So just great advice on how to really help and be an ally, for your, disabilities. So thank you for that. I, I hate to do this, but I have to ask my last question. because this has been such a great conversation. are there, are there any resources you'd recommend for listeners in addition to the great list of do's and don'ts and things to do you already provided?

[00:33:48] Ashley Oolman: [00:33:48] Yes. Yes. Yes. So, full disclosure, I'm a super nerd. I'll try to keep it brief.

[00:33:55] Benjamin Rue: [00:33:55] Oh. And also full disclosure. We will be posting this list as well.

[00:33:58] Ashley Oolman: [00:33:58] Spread it far and wide please. Yes, they're there. So there are all sorts of things. Free resources available that help employers get caught up in this area and then stay on track with workplace accessibility and disability inclusion.

[00:34:14] So, since you're posting the list, I'll just run through them quickly. We've got the job accommodation network, the employer resource assistance network. The society for human resource management. I'm sure a lot of the listeners are probably pretty familiar with that one. Yeah. Yep. The office of disability, employment policy, proposed public right of way accessibility guidelines. And then the last one that I listed, is the department for education and economic development. And then in addition to those, I, you know, those are, those are more kind of like workplace or community, you know, access related resources. There are also disabled activists all around the world that can be found on varying platforms who are advancing human rights and centering on disability, identity, culture, rights, justice, and more.

[00:35:05] And I mean, full disclosure, there are so many folks that have been doing this work a lot longer than I've been nerding out this area. So I do feel like I have to have these names, some of my favorites. So to round out the recommended resources list, here are some of those, we've got the national disability rights network, the national black disability coalition and the disability visibility project. Incase listeners are interested, I would love to keep this conversation going. So if anything comes up or you have any questions, please feel free to reach out. Ben, if you wouldn't mind, sharing my contact info in the show notes with those resources, that would be awesome.

[00:35:46] Benjamin Rue: [00:35:46] Oh yeah. We'll definitely be sharing that and I, will be including it in my, and my closing.

[00:35:52] Ashley Oolman: [00:35:52] Oh, very cool. Well, I would just like to thank everyone again for joining me today. And in closing people with disabilities have been effectively segregated from participation in the workforce, proven by the rate of unemployment being at least twice that of the remainder of the U S population. And that's across all 50 States.

[00:36:11] We just reviewed today that there are laws in place, but compliance with those laws. Only scratch the surface of disability inclusion opportunities for businesses to explore the session, open, direct, and critical dialogue about compliance and accessibility with an audience of professionals that I truly believe are most likely to influence that meaningful change.

[00:36:34] So from now on, I encourage you to move forward in the workplace with this knowledge, a hunger for more information and enough competence and audacity to make aggressive and necessary advancements in your own workplace and in the area of disability inclusion.

[00:36:49] Benjamin Rue: [00:36:49] Thank you so much for that wonderful conversation Ashley. If you'd like to learn more or continue a conversation yourself. Please feel free to contact Ashley at aoolman@lifeworks.org. Or visit her at www.lifeworks.org/community. You can listen to more episodes of The Forum podcasts at our website forumworkplaceinclusion.org/podcast. Or find us on Apple podcasts, Spotify, anchor, and Stitcher.

[00:37:18] Thank you again for listening. Have a great day.

[00:37:22]

Outro: [00:37:22] Thank you again for listening to the Forum on Workplace Inclusion podcast. Don't forget to subscribe to our podcast to get updates and the latest episodes. Also tell us what you think by reviewing our podcast. We'd love to hear your feedback for more information visit us at forumworkplaceinclusion.org, or search Workplace Forum on Facebook, Twitter, and LinkedIn. Thank you very much and have a great day.

[00:37:45] The Forum on Workplace Inclusion podcast is recorded at Augsburg University in Minneapolis, Minnesota. One of the most diverse private colleges in the Midwest. Augsburg University offers more than 50 undergraduate majors and nine graduate degrees to 3,400 students of diverse backgrounds at its campus in the vibrant center of the twin cities and nearby Rochester, Minnesota location.

[00:38:07] Augsburg educates students to be informed citizens, thoughtful stewards, critical thinkers, and responsible leaders. An Augsburg education is defined by excellence in the liberal arts and professional studies guided by the faith and values of the Lutheran church and shaped by its urban and global settings.Learn more at augsburg.edu.

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Podcast Ep. 45 - Overt Discrimination in the Workplace

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In this episode of The Forum Podcast, Ashley Oolman (Lifeworks) leads listeners through a discussion about how disability status may not be as protected as other classes in the workplace.

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Podcast should we raise the minimum wage?

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Podcast should we raise the minimum wage?

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‎The Indicator from Planet Money: Should We Raise The Minimum Wage? on Apple Podcasts

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Biden is calling for a $15 federal minimum wage. Is that a good idea for workers and small businesses? Stacey and Cardiff duke it out.

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By Saige Draeger | May 2021

A QUICK LOOK INTO IMPORTANT ISSUES OF THE DAY

In 1938, Congress passed landmark legislation codifying worker protections in America. The Fair Labor Standards Act (FLSA) created the framework governing workplaces today, restricting child labor, establishing a standardized workday and providing for overtime pay. The legislation also established a federal minimum wage, creating a guaranteed wage floor, irrespective of geographic location. In addition to the federal rate, the FLSA outlines wages for tipped workers, workers with disabilities, and students. The FLSA has been amended many times in its 83-year history, most commonly for the purpose of raising wages, or expanding worker coverage. Today's FLSA covers an estimated 143 million workers.

The minimum wage has long been a source of intense debate. The federal minimum wage is $7.25 an hour where it has stayed since 2009 after Congress last approved an incremental increase in 2007. In 2012, over 100 New York City fast-food workers walked off the job, protesting for higher wages, better working conditions and a union. This action gave rise to a series of demonstrations led by the Service Employee International Union (SEIU) and other grassroots efforts coalescing around raising the minimum wage to $15 an hour, a campaign now known as the " Fight for $15. "

DYK?

Approximately 47% of essential workers earn less than $15 an hour.

CBO analysis indicates that a $15 an hour federal minimum wage by 2025 would benefit 27 million workers.

Roughly eight in 10 Americans across all generations believe the federal minimum wage is too low.

Proponents of raising the minimum wage argue that the current federal rate is too low and not commensurate with the rising cost of living, pointing to its peak purchasing power in 1968 at over $12 when adjusted for inflation. Opponents, however, worry that an increase will place an undue burden on business owners, prompting layoffs and greater unemployment. Despite prolonged inaction at the federal level, efforts to raise the minimum wage remain popular, with states taking the lead in making such changes. In 2019, roughly two-thirds of American voters favored increasing the minimum wage to $15 an hour. While support for a $15 hourly minimum wage isn't consistent across party lines, recent research suggests that favorability towards raising the wage more generally has increased since the onset of the pandemic.

Many employers have taken proactive measures to increase wages. In 2018, one of the country's largest employers, Amazon, announced and implemented a starting wage of at least $15 an hour nationwide. Since making the change, the company has actively lobbied for a matching federal increase and backed efforts to raise wages to $15 an hour at the state level.

A growing number of businesses are following suit, including Costco, Target, and Starbucks. A recent Amazon/Ipsos study revealed that eight in 10 Americans believe employers should have a role in raising the minimum wage to $15 an hour, with over half of the respondents saying large employers should play a strong role in increasing wages. Moreover, a growing number of small- and medium-sized businesses are committing to incrementally raising wages to $15 an hour, with over 600 business owners signing on to organized efforts by Business for a Fair Minimum Wage.

State Action

The FLSA does not preclude states from enacting their own minimum wage rates. Currently, 29 states and D.C. have minimum wages above the federal minimum wage of $7.25 per hour. Five states do not have a state minimum wage: Alabama, Louisiana, Mississippi, South Carolina, and Tennessee. Two states, Georgia and Wyoming, have a minimum wage below $7.25 per hour. In all seven of these states, the federal minimum wage of $7.25 per hour applies.

Nineteen states began 2021 with higher minimum wages than in previous years. Nine states-Alaska, Arizona, Colorado, Maine Minnesota, Montana, Ohio, South Dakota, and Washington-automatically increased their rates based on the cost of living, while 10 states-Arkansas, California, Illinois, Maryland, Massachusetts, Missouri, New Jersey, New Mexico, New York, and Vermont-increased their rates due to previously approved legislation or ballot initiatives. At least 34 states are considering legislation to increase the minimum wage, with 29 states proposing an incremental increase to $15 an hour or more. Delaware's Senate recently passed $15 an hour legislation in late March with additional action expected in the House in April.

To date, nine states and the District of Columbia have enacted legislation or passed ballot measures incrementally increasing the state minimum to $15. Florida became the most recent addition in late 2020, after voters approved Amendment 2 with over 60% support. Amendment 2 raises the state's minimum wage to $15 an hour by 2026 and provides for automatic indexing-cost of living increases-starting Sept. 30, 2027. The amendment will raise the state's cash wage for tipped workers to $11.98 per hour by 2026.

Virginia also approved significant changes to its minimum wage rates in 2020. HB 395 increases the minimum wage to $9.50 per hour effective May 1, 2021, and provides for incremental increases each year until reaching $15 per hour in 2026; annual indexing will begin Jan. 1, 2027. The legislation stipulates that increases scheduled for 2025 and 2026 not take effect unless reenacted by the General Assembly prior to July 1, 2024. If such provisions are not reenacted, the minimum wage will instead index annually beginning Jan. 1, 2025, from a wage rate of $12 per hour. The measure also creates a training wage at 75% of the minimum wage for employees in on-the-job training programs lasting less than 90 days and expands state coverage to those exempted from the FLSA, including domestic workers and people with disabilities.

Federal Action

Congress has raised the minimum wage nine times since its creation in 1938. In the years succeeding the last approved increase in 2007, Congress has considered iterations of the Raise the Wage Act. If enacted, the Raise the Wage Act of 2021 would immediately lift the federal minimum wage to $9.50 an hour and incrementally increase it to $15 an hour over the course of five years, with annual indexing to median wage growth thereafter. For tipped workers, the bill would immediately more than double the cash wage to $4.98 an hour while providing for incremental increases until reaching uniformity with the non-cash wage. Tipped workers would still be allowed to keep any tips received. Additionally, the act phases out 14(c) waivers, which allow employers to pay people with disabilities subminimum wages, and the youth wage paid to employees under 20 for their first 90 days on the job.

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national conference of state legislatures

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The minimum wage has long been a source of intense debate. The federal minimum wage is $7.25 an hour where it has stayed since 2009 after Congress last approved an incremental increase in 2007. Here's a look at state and federal action on minimum wage.

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Article about human capital and how to improve it and why it's important

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Article about human capital and how to improve it and why it's important

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What is the value of your workforce?

Your company holds many assets. But some of them are easier to quantify than others.

For example, you can easily pull up a balance sheet to determine your economic assets. There's a simple number to showcase how much you have.

What these balance sheets don't tell you is how much your employees are worth.

It's difficult to put a number on intangible values like leadership, education, creativity, and past work experience. But it's clear that these have value for any company.

These assets allow employees to perform and thrive.

That's why it's crucial to the health of any organization to be aware of this value - so they can improve it.

The term used to describe the value of these assets is human capital.

Let's explore what human capital means and how you can increase the human capital in your own organization to achieve economic growth.

What is human capital?

The human capital definition can be explained as an intangible asset stemming from a person's talent and experience.

Human capital isn't an official asset you can quantify on a balance sheet. But it's still considered an economic value for a company.

That's because human capital empowers a company to service its clients, create its products, and innovate for new offers.

Human capital can be made up of several factors, including:

For the human capital of an entire economy, people calculate it a bit differently.

The Human Capital Index breaks down human capital scores (for an entire economy) between 0 and 1. It uses the following as indicators:

Probability of survival to age five

Expected years of school

Harmonized test scores

Survival rate from age 15-60

Fraction of children under five not stunted

With better human capital, companies - and entire countries - can increase their productivity and profitability.

How does human capital affect organizations?

Every company is what it is because of its employees. Individuals who make up a company's workforce are responsible for its success or failure.

Think of it this way. If your organization employs people who have more education, more developed skills, and more work experience, it'll be able to accomplish much more.

A higher human capital means employees are more capable of doing their job. But it also means they can innovate and find creative ways to solve a crisis.

They'll also be able to do their job more efficiently if they have higher human capital.

That's because they probably have more experience doing the job. But they can also achieve efficiency because of their rich life experience. This experience gives them a wider perspective on their problems.

Keep in mind that human capital can migrate from one place to another. Companies that don't do what it takes to retain human capital can experience a "brain drain."

Brain drain describes the phenomenon that occurs when human capital migrates from developing areas to urban and developed areas.

The same can happen to companies if they don't value their employees. Data from an MRI network study shows that 25% of employees leave their job to seek more compensation.

You can also lose human capital if you don't give advancement opportunities. 30% of employees leave their job due to a lack of career advancement, according to the same survey.

Furthermore, human capital has a huge impact on the success of not just an individual company, but also the economy.

For example, according to the Human Capital Index, 80% of the world's poor live in economies with a human capital index under 0.5.

The types of human capital

You can separate human capital into three types: knowledge capital, social capital, and emotional capital.

Let's look at some examples of each:

Knowledge capital

Trade school education

College degree

Hard skills

Work experience

Situational knowledge

Intelligence

Social capital

Relationships

Fame

Social status

Professional network

Health

Emotional capital

How to increase human capital

An obvious way to increase human capital is to hire more people.

But human capital isn't static. You can perform actions to improve it within your existing workforce.

Here are five ways that you can increase the human capital in your organization:

1. Improve education for your workforce

A highly educated workforce will be capable of achieving more.

You can provide training related to your industry. You can also sponsor employees to get college degrees or additional certifications. Leading companies also make sure they are providing ample opportunities for learning and professional development within the work itself. That might mean giving more decision-making authority, enabling people to pursue side initiatives, or pairing people with others they can learn from on collaborative projects. All of these options will help prepare them to take on more advanced roles in your organization.

People can always learn more. A company that invests in its employees' continued learning will keep growing its human capital without having to change anything else.

You'll also experience more employee productivity if your workforce sees that you value them. You will also see an increase in employee retention.

2. Provide a work culture that encourages creativity

Make some room for your employees to be creative. Creative thinking can lead people to innovate more. It can also lead to better employee engagement.

They can think outside the box and have better potential to solve problems in new ways.

Compare this to a culture that stifles creativity - such a culture limits what each person can achieve. The overall human capital suffers as a result.

3. Divide labor into specialized niches

Structure your company in a way that encourages specialized skill development.

The more someone specializes, the more they can focus on their zone of genius.

Instead of spending their resources learning several jobs, they can maximize their potential in one area of specialization.

By doing this, you get a workforce that's highly specialized and talented in several fields.

This is often better than a generalist workforce that does everything in a mediocre way (although many people and organizations have found successful ways to allow generalists to rotate through multiple specialties).

4. Hire a diverse workforce

A diverse workforce is made up of people from a variety of backgrounds.

When more people have different life experiences, they bring different competencies and points of view to the table.

According to a recent McKinsey study, executive teams with gender diversity are 25% more likely to achieve financial outperformance. The case for ethnic diversity is even better at 36%.

This is why embedding diversity, equity, and inclusion in your organization's DNA can help you increase your human capital.

5. Provide ongoing coaching

Education doesn't have to come in the form of traditional training or formal education.

You can also coach your workforce to:

With the right coaching, you can help more individuals in your organization reach their full potential.

Imagine running a business with people at their top potential. This is what it means to maximize human capital.

Prioritize human capital in your organization

Without human capital, a company is just objects and bank accounts. The true value of a company stems from its workforce.

That's why it's worth investing in your people to increase your human capital.

Even if it temporarily decreases your bottom line, this investment will allow your employees to efficiently produce more revenue and profit for your company in the long run.

They'll also stick around for the long term if they know you care about their development.

BetterUp can help you increase your human capital by providing high-performance coaching, improving leadership skills, and building inclusive workforces.

Schedule a demo to see how it works.

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Human capital - why it matters and 5 tips to improve it

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What is the value of your workforce? Your company holds many assets. But some of them are easier to quantify than others. For example, you can easily pull up a balance sheet to determine your economic assets. There's a simple number to showcase how much you have.

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Editorial Note: Forbes may earn a commission on sales made from partner links on this page, but that doesn't affect our editors' opinions or evaluations.

There are few political arguments more polarizing than raising the federal minimum wage.

The current federal minimum wage, which sits at $7.25 an hour, hasn't been raised since 2009. Democrats have proposed raising the wage to $15 an hour in the next stimulus package . And although the Senate parliamentarian has declared it cannot be passed through the budget reconciliation process , House Democrats are still leaving the language in the bill in hopes of getting it passed one way or another.

A closer look at the debate around raising the minimum wage reveals how arcane the surrounding research is. For every argument in favor of raising the wage, there seems to be an equally appealing argument against it.

But when looking at the bigger picture-who the minimum wage impacts, who would benefit from raising it, how it currently compares with inflation and its long-term effects for the economy-one thing is clear: An increase at the national level is overdue.

A Brief History of the Minimum Wage

The federal minimum wage was implemented in 1938 under the Fair Labor Standards Act. It was the first time the federal government stepped in to establish a standard of pay for workers-and though it was originally drafted to be 40 cents an hour, it was pared down to a mere 25 cents per hour, in order to win support from southern state representatives.

The federal minimum wage has increased 22 times since its inception, inching its way up from cents on the dollar to today's $7.25 rate. Through the 1940s-1960s, the wage increases kept pace with productivity growth (meaning more goods and services are produced per hour) and inflation. As America became economically stronger, workers throughout the labor chain were growing along with it.

Although economic productivity continued to grow, the pace of wage growth started slowing after 1968, and the minimum wage stopped rising with inflation.

It's clear that the federal minimum wage's purchasing power-the amount of goods or services that your money can buy-has severely eroded over time. The current federal minimum wage, adjusted in 2020 dollars, has less purchasing power than it did from the mid-1950's to around 1980.

It's important to differentiate here between minimum wage keeping pace with productivity and growing with inflation; if it simply grew with inflation (referred to as indexing), the money would have the same purchasing power over time. If it rose with productivity, minimum wage earners will continue to be able to buy more over time. That's why some economists and politicians argue that only raising the wage to account for inflation isn't necessarily the best option to help minimum wage earners.

Each year, the Bureau of Labor Statistics does a deep dive into who is living off the minimum wage. In 2019, 392,000 workers earned exactly the minimum wage, and 1.2 million workers earned below the minimum wage (these are typically people in the hospitality industry who receive tips to make up for their hourly wage being below the federal minimum, such as servers at restaurants). Together, these individuals represented 1.9% of all hourly paid workers.

The Effects of Raising the Minimum Wage

There are multiple ways researchers model the effect of a minimum wage increase, along with different variables that researchers focus on, such as industry or the age of people affected. As a result, there is debate on exactly how raising the minimum wage would affect employment, small businesses and the federal deficit. Here are common arguments for and against raising the minimum wage.

Raising Minimum Wage Will Kill Jobs and Increase Prices of Goods and Services

Arindrajit Dube, a professor of economics at the University of Massachusetts and a research associate at the National Bureau of Economic Research argues that the CBO's estimates are wrong due to its methodology, and the overall research that a minimum wage hike's effects on employment are difficult to accurately pin down. He estimates that a national minimum wage increase to $15 per hour, using the CBO report's evidence, would lead to just under 500,000 lost jobs.

Daniel Kuehn, research associate at The Urban Institute, says the overall consensus of the effects of minimum wage are that yes, it will result in jobs lost-but the number of jobs it removes from the economy aren't statistically significant (although they come at a human cost that's harder to quantify). Employers could also absorb the wage hike costs in other ways, such as reducing fringe benefits (such as free meals for restaurant servers or employee discounts for retail servers).

But what about those memes of a minimum wage hike turning your $7 Big Mac meal into a $20 splurge? Is that true? According to Kuehn, it's also unlikely to happen.

$15 minimum wage? congrats your taco bell order just became sit-down restaurant price

- 𝚑𝚊𝚗𝚗𝚊𝚑 𝚐𝚛𝚒𝚏𝚏🐉 (@yeahrightgirlhg) January 15, 2021

"A wage hike might raise prices of goods and services, but the increases will be spread out among many consumers," Kuehn says. Prices may increase, but not enough for consumers to really feel a burn in their wallet.

Arguments for Raising Minimum Wage: It Will Benefit Millions, Lift Struggling Workers Out of Poverty

The CBO report does have some silver linings: It estimates a federal minimum wage hike to $15 per hour would lift nearly one million people out of poverty and nearly 27 million workers would be affected by the increase.

Though the benefits of a minimum wage increase are positive in terms of the overall economy, it's important to note that effects can vary by location. Since some states have higher standards of living than others, the effects of a high $15 federal minimum wage could affect states like Kentucky or Alabama in much more consequential ways than states like California or New York, where prices and wages are already higher.

Kentucky and Alabama's current state minimum wages are the federal minimum, where California's is $13 or $14 an hour depending on the number of the company's employees, and New York's is $15 per hour. More than doubling the minimum wages for states like Kentucky and Alabama would likely be a shock for their small businesses, since the cost of living is already low, and therefore their revenues are likely smaller compared to companies where the cost of living is higher.

Twenty-one states and Washington D.C. currently have minimum wages above the federal minimum wage. The proposed increase to $15 per hour would happen in stages over a period of four years to give employers time to figure out how to balance the costs.

The Current Minimum Wage Debate: Where Democrats, Republicans Stand

Democrats are holding firm on their proposed federal minimum wage increase to $15. They're hoping to pass it as part of the next stimulus package, but the Senate parliamentarian has ruled that it cannot be included under the budget reconciliation process. So while it may pass in the House, it's likely to be removed from the bill that goes to the Senate.

Some Republicans have voiced support for raising the federal minimum wage, but not to $15 per hour. Sen. Mitt Romney (UT) and Sen. Tom Cotton (AR) offered a counterproposal of raising the minimum wage to $10 per hour over four years-but employers would have to prove that their workers are legally documented. A 2019 CBO report estimated that raising the federal minimum wage to $10 per hour would have much smaller effects for workers compared to a $15 per hour raise, and would have negligible effects on the number of people in poverty.

Why Raising the Minimum Wage is the Right Thing to Do

Looking at how the current federal minimum wage has flatlined over the past 12 years makes it clear: Low-wage earners are falling behind. They're working for less money, thanks to inflation, making them poorer over time.

Pew Research points out that wage growth has largely gone to the highest earners-and a separate EPI analysis notes that it has also remained unequal by race, with significant widening gaps in wages between Black and white Americans-but raising the minimum wage could help. Research about raising the minimum wage in 1966 reveals it led to a significant drop in earnings inequality between Black and white Americans, accounting for more than 20% in the reduction in racial earnings and the income gap. A stagnant minimum wage is clearly becoming a proponent of the widening racial wealth gap in the country.

Over 100 economists agree. A letter from the Economic Policy Institute (EPI) has garnered dozens of signatures from economists all over the country in support of raising the federal minimum wage to $15 per hour by 2024.

The letter cites the stagnant minimum wage growth as "directly responsible for growing inequality between the bottom and the middle class," and adds "this minimum wage increase would provide a significant and much needed boost to the earnings of low-wage workers."

What comes next for the federal minimum wage increase remains to be seen. What is known, though, is that most Americans support a $15 minimum wage; a recent poll from Reuters/Ipsos found 59% of respondents are in favor of the idea. We can expect to see both Democrats and Republicans battle to raise the wage in a separate bill, even if it doesn't land directly on $15 an hour.

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What You Need To Know About The Minimum Wage Debate

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There are few political arguments more polarizing than raising the federal minimum wage. The current federal minimum wage, which sits at $7.25 an hour, hasn't been raised since 2009. Democrats have proposed raising the wage to $15 an hour in the next stimulus package. And although the Senate parl

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The skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country.

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The True Story of the Minimum-Wage Fight.

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The True Story of the Minimum-Wage Fight.

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In the U.S., the official poverty threshold is $26,500 in annual income for a family of four. For a one-person household, it's just under $13,000. In 2019, the official poverty rate in the U.S. was 10.5 percent, down from 11.8 percent just a year earlier. In fact, this was the fifth annual drop in a row, and the 2019 figure was the lowest on record since 1959, when the poverty rate was first measured. But once the 2020 numbers come in, those gains are due to be reversed. A pandemic will do that. A series of government interventions have blunted the hit for many people. Still, it's estimated that some 8 million Americans have slipped below the poverty line during the pandemic. As you likely know, higher-income workers were generally hit less hard by the pandemic, as a lot of their jobs could be done remotely. For lower-income workers, there was a double whammy: more lost jobs and a higher likelihood of getting COVID-19. So, with this pandemic-induced poverty spike - and with Democrats now running the federal government - there's been a surge of interest in one of the most popular policies to fight poverty: a higher minimum wage.

Cory BOOKER: Here in Congress, there is a big movement to raise the minimum wage. And it will pass the House of Representatives because that's a majoritarian body. The question is, can it pass in the Senate?

BOOKER: I am one of the two senators from the state of New Jersey.

Booker is one of several Democrats promoting the Raise the Wage Act of 2021. It calls for the federal minimum wage to more than double over the next four years, to $15 an hour.

BOOKER: I just think that this is a basic fairness proposition in America. Do we want people who work a full-time job, and catch extra shifts where they can, to be below the poverty line?

The current federal minimum wage is $7.25 an hour, with some exceptions for seasonal workers, apprentices, and tipped employees. Someone working full-time at $7.25 an hour, 40 hours a week, would earn a bit more than $15,000 a year, which is actually a bit above the official poverty line for an individual. Still, the last time the federal minimum wage was raised was 2009. Meanwhile, as Senator Booker points out-.

BOOKER: Childcare is going up, the cost of college is going up, consumer products have gone up. And this is a defining issue in America. We have seen the dignity be stripped from work, the security be stripped from work. We see more and more Americans having this feeling on both sides of the political aisle that they're working harder and making less.

Support for a $15 minimum wage is extremely strong among Democratic voters - 86 percent in favor - and fairly strong among Republican voters, at 43 percent. But there is much less support among Republican politicians. Their primary argument is that a higher minimum wage would punish businesses, especially small businesses, and ultimately cost jobs. This debate has been going on for a good long while. In 2013, President Obama took it on.

Betsey STEVENSON: Yeah, so there was a push to raise the federal minimum wage to $10.10.

As in 10 dollars, 10 cents an hour. Betsey Stevenson was chief economist at the Department of Labor under Obama.

STEVENSON: And in fact, one of the things that President Obama did was raised the minimum wage for federal contractors because he had the authority, then indexed it to inflation going forward.

Stevenson also served on the Council of Economic Advisors during Obama's push for a broader $10.10 minimum wage. So she is familiar with the standard Washington choreography.

STEVENSON: There is a constant back-and-forth where Democrats point to the fact that people simply cannot live on the minimum wage and Republicans point out that all sorts of people will lose their jobs because employers won't want to hire people at that new, higher wage.

So Obama's bill for $10.10 failed in the Senate, with minimal Republican support. Maybe it's useful here to have a bit of minimum-wage history. The first minimum-wage law in the U.S. was passed in 1938, under Franklin Roosevelt, during the Great Depression. There had been some earlier, local minimum-wage laws, which the Supreme Court had declared unconstitutional. But the Court reversed itself in 1937, opening the door for F.D.R.'s federal policy. The original federal wage was 25 cents an hour, and it mainly covered manufacturing jobs. Over time, it was expanded to cover retail and service jobs as well as agriculture. And it's been raised during every presidency except four: Reagan, Ford, Obama, and Trump. But the minimum wage has never been indexed to inflation or the median wage, so its purchasing power starts to erode the moment it's raised. Which leaves politicians to constantly fight over re-raising the wage.

STEVENSON: What else would politicians do?

But again, we're talking about the federal minimum-wage. We happen to live in a funny country, where for certain issues, individual states are free to charge forward with their own laws. We heard about this last week on the show with marijuana legalization. Since 2014, 29 states have passed a minimum wage that's anywhere from a little bit higher than the federal wage to more than double, with several cities, like New York and San Francisco and Seattle, passing their own higher wage. So with all that variation, all those natural experiments, you'd think that economists could easily answer the key question we all care about: is a higher minimum wage, on balance, a winning policy?

Jacob VIGDOR: The estimates in the literature are all over the map.

Today on Freakonomics Radio, we'll try to decipher that map.

David NEUMARK: Well, I think we know a lot, actually. We don't all agree.

And we'll tell you exactly why a $15 minimum wage is a brilliant idea. Or a terrible idea. A brilliant idea? Or maybe a terrible idea?

Also: the trickiest thing about making economic policy:

Betsey STEVENSON: People are not cogs in machines. They are people.

* * *

David Neumark is a labor economist at the University of California, Irvine.

NEUMARK: I'd say my mission as an economic researcher is to really try to provide the most solid and most objective evidence I can on policy questions, and the ones I'm most interested in are policy questions relating to inequality. Really, two dimensions I focus on. One is anti-poverty policy: How do we raise earnings of people at the bottom? And the other dimension I focus on is discrimination. DUBNER: So if you're concerned with anti-poverty, I would assume that you are a big supporter of minimum-wage laws, including the new proposed $15 federal minimum-wage law, yes? NEUMARK: Not exactly, no.

Again, a little history here is useful - this time about the economic research on the minimum wage. In 1976, a survey by the American Economic Association found that 90 percent of its members agreed that if you raise minimum wages, you decrease employment for younger and less-skilled workers. The idea was that employers don't want to overpay workers who they think aren't worth the wage. Another survey in 1990 found this was still the consensus view, with 80 percent of economists saying that higher minimum wages are bad for what they call total employment.

NEUMARK: When I was starting out in graduate school, the professor, Jim Medoff, came in, and he plopped down these five volumes, like the old New York phone book for those who remember what those are. And this was the report of the Minimum Wage Study Commission, and it was, I don't know, 100 papers. And he said, "One thing you shouldn't work on is minimum wages because we know everything."

This may shock you, but it turns out that economists didn't know everything. But also: things were changing. In the late 1980s, with rising inflation and a stagnant minimum wage, some states started raising their wages.

NEUMARK: Suddenly you had this multitude of different strategies for estimating minimum-wage effects.

Meaning: there were new data - and new research methods - to address the old minimum-wage question. In 1994, the economic consensus was abruptly overturned in a paper by the economists Alan Krueger and David Card. They took advantage of the fact that New Jersey had raised its wage while neighboring Pennsylvania didn't. Analyzing employment data from fast-food chains on either side of the border, Krueger and Card found that the new law did boost the earnings of low-income workers without reducing employment. So: did the economics profession begin to converge around a new consensus, a pro-minimum-wage consensus? They did not. At this moment the field is, essentially, split. In a recent survey of academic economists, 45 percent agree that a federal minimum wage of $15 would lower employment; but 33 percent said they were uncertain, with the remainder mostly disagreeing. Even when asked if it would be good to peg the federal minimum wage to some kind of cost-of-living index, an astonishing 42 percent of economists were uncertain. And let me say this: economists almost never profess uncertainty around anything - even non-economic issues - so a 42-percent uncertain vote on this question is bizarre. Why is this such a hard issue to figure out? Let's try to understand. As we heard, David Neumark is not a big fan of a $15 federal wage. Why?

NEUMARK: So my research on the minimum wage, one of the things it tends to say is there definitely is some job loss. And I'm quite convinced of that. So on net, there are winners and there are losers. I think then the question is, how do you add those up? So one reasonable metric is to say, "Well, okay, do we reduce poverty?" If we do, then maybe the costs are acceptable relative to the benefits. My reading of the evidence is that it's pretty hard to find convincing evidence that poverty will fall.

But how can that be? How can an anti-poverty policy not reduce poverty?

NEUMARK: So the minimum wage is a blunt instrument to target the poor. What we would like to do to eliminate or reduce poverty is pass a law that says, "Thou shalt not be poor" or "We shall not have poor families." But the law we actually pass when we raise the minimum wage is, "Thou shalt not pay low wages."

And this law, Neumark says, fails for two reasons.

NEUMARK: One is: there's a lot of minimum-wage workers who - they're not in poor families. They're not even in low-income families. Who are they? Well, like my daughter when she was in high school and had a job. I'm upper-middle income or upper income, depending on your definition. We lived in San Francisco, which was one of the first cities to pass a high minimum wage. And she came home one day in high school, all excited about her raise from the city minimum wage. And I said, "I will bet you I make three times more than the guy you work for." The point being, some of this benefit from the higher wage bill we're going to make employers pay was going to actually flow up the income distribution, not down.

About one in five people who currently work at the federal minimum wage are teenagers; about two in five are under 25 years old. What are the biggest sectors for minimum-wage jobs? As of 2019, nearly 40 percent of the people earning the federal minimum wage work in restaurants, hotels, or other hospitality jobs. More than 20 percent work in retail, with another 14 percent in education and healthcare.

NEUMARK: The second reason it's a blunt instrument is because the single biggest reason people are poor is that nobody in the family works. More than half of poor families have zero workers. So raising the minimum wage, unless it somehow brings some of them into the labor market, it's not doing anything for them at all.

There is evidence that higher minimum wages do pull some people into the workforce, but the vast majority of people who don't work aren't holding out for a higher wage. So if Neumark thinks a $15 federal minimum wage is a bad policy to reduce poverty, what does he suggest?

NEUMARK: We could write checks to the poor. Or we could expand the earned-income tax credit, which basically writes checks to the working poor - which is something conservatives can get behind too, because at least they have to work, and it encourages work. Why are small business owners the ones who have to pay to fix this problem? The owner of the laundromat down the street from me has to pay more because we have a high minimum wage in San Francisco and in California and would everywhere if this bill passes. But the guy who works at Goldman Sachs who makes way more than the person who owns my laundromat isn't going to pay anything for it.

Because so many states have raised their minimum wage, the federal wage of $7.25 an hour is only applicable in 21 states, including Mississippi, Texas, Louisiana, and Indiana. What would happen in those states with a federal raise to $15 an hour?

NEUMARK: What would happen with $15 is that the share of workers affected would be tremendous.

Indeed: a $15-an-hour minimum wage in those states would be roughly the same as the median wage. Which means something like 50 percent of all workers in those states would be affected.

NEUMARK: And when we study past minimum-wage increases, a small percentage of workers are affected. There may be a lot of ways for companies to adjust around that aside from reducing employment. If you're a restaurant, the portions get a little smaller, the bathrooms get a little dirtier, whatever it is. But if it's 50 percent of your workforce or more, suddenly your hands are tied. You're talking about businesses, the small ones, operating on small margins. And how are they going to adjust? They can raise prices a lot, but then it's not clear we've made low-income people better off at all. My well-reasoned fear is that the losses here may be quite large. And I'm worried that these extrapolations from past estimates are way too optimistic.

David Neumark is not the only economist who worries about this. And among the political class, it's not just the Republicans who worry about it either. When Senate Democrats tried to put a $15 minimum-wage proposal in the latest Covid relief package, eight Democratic Senators joined the Republicans in opposition. One of the lead Democratic voices was Joe Manchin of West Virginia.

BOOKER: He's a dear friend.

That, again, is New Jersey Senator Cory Booker.

BOOKER: He often makes the argument that a $15 minimum wage would be great in areas like where I live in New Jersey, which is the New York metropolitan area, the Philly metropolitan area, but is a lot different in his area now. My counter to him is that if you just look at the cost of living in West Virginia - take, for example the least populous, most rural county in West Virginia. An average family with two adult earners and two children would need nearly $75,000 to afford an adequate standard of living without significant government assistance. And unfortunately, today's median household income there is just over $46,000. So, even in your most rural areas, out away from big metropolitan areas like L.A. or New York or Chicago, the cost of living in America has become so staggeringly high that $15 an hour is arguably what families would need to make it.

Democrats like Booker have vowed to keep pushing for a $15 federal minimum wage; just this week, President Biden announced that he's raising the minimum wage for federal contractors to $15. What would be the effects of a $15 wage for everyone? The Congressional Budget Office, a non-partisan agency that analyzes legislative proposals, took a hard look at a $15 federal minimum wage. Their conclusion? Over 10 years, they said, it would "cost 1.4 million jobs and increase the deficit by $54 billion" - that's the bad news - but also, they said, it would raise income for 17 million people and "lift 900,000 people out of poverty." In other words: big benefits and big costs. Which is exactly why some economists, like David Neumark, are against the policy - and why other economists are in favor:

Arin DUBE: I think the minimum wage so far has been a successful policy.

That's Arin Dube, an economist at the University of Massachusetts, Amherst.

DUBE: It tends to raise wages at the bottom, lower poverty. And honestly, I think the highest quality research suggests job loss has been pretty small. As a result, I think we can explore a higher minimum wage going up to say, $15 by 2025.

Among economists who support a $15 target, Dube is one of the most prominent voices. And some of the high-quality research he mentioned is his own. One study looked at wages over 18 years in counties that border each other.

DUBE: Imagine a control group and imagine a treatment group. One side of the border raises the minimum wage, the other side does not. The bet here is that the side not raising the minimum wage is a good proxy to what would have happened had the treatment side not raised their minimum wage.

In this 2010 study, Dube and his coauthors looked at restaurants across 316 county borders - and found no negative employment effects after the introduction of a higher minimum wage. In more recent research, he's come up with new analytic methods.

DUBE: Until very recently, most studies focused on particular subgroups.

Teenagers, for instance. Remember: around one in five minimum-wage workers are in their teens.

DUBE: So you're leaving out four-fifths of low-wage workers when you study teens.

Dube developed a way to assess the overall impact of a wage increase.

DUBE: It is basically pretty simple. How many jobs are paid below the new minimum wage? Let's say the minimum rises to $10. How many fewer jobs in Massachusetts for raising the minimum wage to $10? And then compare that to how many more jobs being exactly 10 or maybe 11 or 12. And doing that actually allowed us to jointly estimate what the impacts are on wages, on wage spillovers, on employment.

The British government, wanting guidance on whether a minimum-wage hike would lead to job loss, recently asked Dube to apply his methodology to various economies around the world. Britain has had a minimum wage since 1997, and it's been raised nearly every year. It now stands at around $12 U.S.D. an hour, with carve-outs for younger workers. So what did Dube find when he analyzed minimum-wage laws in multiple countries?

DUBE: I didn't see very much convincing evidence that job losses had occurred. And following that, the U.K. chancellor decided to pursue the minimum wage all the way to two-thirds, 66 percent, of their median wage.

In the U.S., the median wage is just under $20 an hour. And so, if you fit this global analysis onto the U.S. economy-

DUBE: I think that $15 in 2025, which would be something like $13.50 in today's dollars, is a reasonable target.

This brings us back to a fundamental, and contentious question: who pays for these higher wages?

DUBE: Middle- and higher-income consumers end up subsidizing wages at the bottom. And if you ask those individuals, most people in this country are very happy to do that.

But think back to David Neumark's concern:

NEUMARK: Why are small business owners the ones who have to pay to fix this problem? The owner of the laundromat down the street has to pay more but the guy who works at Goldman Sachs isn't going to pay anything for it.

How does Arin Dube respond to that?

DUBE: It is the case that some employers may see reduction in profit, but if you look at the price pass-through, it's actually quite substantial and in some cases, may cover almost 100 percent of the wage increase.

"Price pass-through" meaning: businesses pass the higher costs on to customers. Evidence from Hungary, for instance, estimates that 75 percent of a wage increase gets passed on as higher prices. Consider what might happen at a McDonald's.

DUBE: The price of a burger may rise like 50 cents. That's a substantial increase in the price of a burger. However, most goods and services are not minimum-wage intensive. And as a result, if you look at the overall C.P.I., the inflation rate, it's going to be affected in a very small manner, even though particular services and products - especially, for example, fast food - those are going to see some larger increases. DUBNER: But if low-price items are more typically consumed by low- income people, doesn't that affect the very people that the raise of the minimum wage is meant to improve? DUBE: Sure, but the wage gains are 10 times larger.

That said, organizations like the National Restaurant Association have come out strongly against a minimum wage hike. After surveying 2,000 of its members, the association said: "Nearly all restaurant operators say they will increase menu prices. But what is clear is that raising prices for consumers will not be enough for restaurants to absorb higher labor costs." Amazon.com, meanwhile, which is the second-largest private employer in the U.S. has already raised its own minimum wage to $15 an hour, and it strongly supports a federal raise to $15. You might think that Amazon is simply championing a policy it believes in. Or, if you're a bit cynical - maybe "realistic" is the better word - you might think that Amazon stands to benefit if all firms have to pay more, since most of them don't have the resources and scale that Amazon has to absorb the cost. If you own one restaurant, meanwhile, that's an entirely different proposition - especially as the Raise the Wage Act of 2021 would eliminate the so-called tip credit that lets restaurants pay some of their workers less than the minimum wage. Arin Dube again:

DUBE: Especially right now, given the difficulties faced by small restaurants and the hospitality sector, I can see a very reasonable argument for providing some tax credits, some assistance. And also, I think there's a reasonable argument to stretch out the phase-in period to make sure that there's not very large increases while the economy is recovering from the pandemic. DUBNER: In New York City, which has raised the minimum wage, and it's affected restaurants, you hear this very complicated complaining game, where people complain that restaurant workers are underpaid, so they want the wage to rise. So there's popular support for that. But then the restaurant owners say, "Well, if I raise wages, then we're going to have to raise prices significantly." And then the consumers say, "Well, that's okay that's the way the economy works." And then they raise the prices, and then the customers stop going there, and the restaurant goes out of business, and everybody's left to blame everybody else. So this is not your problem to solve, Arin, I realize. But when that argument gets played out over and over and over again, not just in restaurants, but all kinds of small businesses, how would you suggest that people learn to balance these benefits and costs in a way that does what most voters want - which is pay people more - but that doesn't punish the employers so much that they suffer? DUBE: It may not be surprising to hear that I actually don't think that the price increases have had very strong overall business closures. I do think there is some that happened, some especially lower-productivity firms are more likely to go out of business. We are seeing some evidence of that, reallocating work to more higher-productivity firms. You could think that's a good thing. DUBNER: I just want to make sure I'm understanding you when you talk about the productivity of the firms that may go out of business. Basically, if a firm is not running itself well enough to withstand slightly higher wages, then they deserve to go out of business, right? I mean, I don't mean to be brutal about it, but that's essentially the argument. DUBE: That's essentially the argument. STEVENSON: If there's a business that's right on the margin, and the only way they is by paying people no more than $7.25 an hour, then they're just not adding that much to society.

The former Obama labor economist Betsey Stevenson again.

STEVENSON: And if they see themselves only as generating value when they're doing it off the backs of people who are being underpaid, I don't want that business to keep existing. And I don't think that's harsh because there's some other business that will come into its place.

Okay, we've heard some minimum-wage history. We've heard some minimum-wage economic analysis, which fails to produce a clear way forward. So how about a case study?

VIGDOR: There's no place like Seattle.
* * *
Roughly three-quarters of the published economic research argues that raising the minimum wage leads to job loss. But a lot of newer research essentially argues the opposite. Which means you're left with a lot of economists arguing with one another.

VIGDOR: Just these really bare-knuckled arguments. Starting to study the minimum wages is like walking into a bar where there's a fight going on. And I've worked on plenty of controversial stuff in the past, but nothing like this.

Jacob Vigdor is an economist at the University of Washington in Seattle. In the other areas he's done research - like housing policy, education policy, even immigration policy - things are different.

VIGDOR: If one study says the number is big and the other study says the number is small, then everybody sort of agrees that, well, the truth probably lies somewhere in between. But that's just not the way that the scholars in the minimum-wage literature go about this debate. It's more on the order of, "My number's right and your number's wrong."

Here's how the economist Jennifer Doleac recently put it in a tweet about minimum-wage research: "I study lots of controversial topics but would never go near that one, thanks. So political. A nightmare." So perhaps it was understandable that Jacob Vigdor wasn't all that keen on studying the minimum wage. But in 2014, the city of Seattle passed a minimum-wage law.

VIGDOR: The city decided to raise the minimum wage to $15. And the same day they passed that ordinance, they passed a resolution that said there should be an academic study of this minimum wage.

And guess who was invited to be director of the Seattle Minimum Wage Study? I'll give you a hint. It rhymes with Shmacob Shmigdor.

VIGDOR: I remember sitting in a meeting, back in 2014, deciding whether I wanted to devote five years of my life to this study and thinking to myself, this is a pretty crowded literature. I don't know that you could write something about Seattle and really have it move the needle on our understanding of the minimum wage.

But he began to reconsider when he heard about the data he and his team would have access to.

VIGDOR: When it was revealed that there actually was hours data in the Washington state data, that was the game changer for me.

"Hours data" meaning - well, just what it sounds like: how many hours each employee works at their hourly wage.

VIGDOR: The limitation of studies that can't use hours data - which is the vast majority of them - we think that when you raise the minimum wage, employers will make adjustments. Most of the work that's been done on the minimum wage so far has looked for one particular type of adjustment, which is: the employer lays people off, the employer decides to go with a smaller workforce. That's not the only potential way that an employer could adjust. They could decide to keep their workforce the same size and just have everybody work fewer hours. That is a reaction that is invisible in most data sets, because most data sets used to study the minimum wage, you get information on the total number of employees, but you don't get the information on how many hours they work.

If that's surprising to you - that economists and other researchers try to do robust research with such imperfect data - well, it's a reminder how hard it can be to get the right data to do robust research. This means you have to do a lot of intellectual jujitsu: coming up with proxies, with estimates, with workarounds. But not this time: Vigdor was given access to all the hours worked at all the jobs in the state of Washington, along with earnings data. And because it was only the city of Seattle raising the minimum wage, he could use the rest of the state as control conditions.

VIGDOR: Most of our analysis is using a technique called synthetic control, which basically says, let the data show us where the right control regions are. A lot of them were in the suburban fringe of the Seattle-Tacoma metropolitan region.

In 2014, Seattle's minimum wage was $9.47 an hour. The new law gradually increased it to $15 by 2021.

VIGDOR: We first got our hands on the Washington State data for purposes of analysis in early 2016.

So what'd they find?

VIGDOR: From the first runs of the data to today, the story has remained remarkably consistent: We see evidence that when the minimum wage goes up, hours decline.

These declines in hours worked were primarily driven by whether a business was busy or not.

VIGDOR: It's periods of time where there's not as much work, where it might make more sense to send people home, to not have as many people working.

So what's the net effect for workers? Is the higher wage enough to offset the reduction in hours?

VIGDOR: If you're an experienced worker, this looks like it's not such a bad deal.

Which implies experienced workers are less likely to get sent home when business is slow. So, for those workers-.

VIGDOR: Their income at the end of the day is higher.

How much higher?

VIGDOR: The estimates from our data suggest that when you raise the minimum wage by what Seattle did in the period we studied, which is about 34 percent, that the more experienced workers were seeing their total incomes go up on the order of 9 percent at most. So as a tool for delivering more money to these families, it does deliver some. But it's a real leaky bucket. And the leaks come from the forms of cutbacks in hours.

So some workers benefit under the higher wage, though not by too much. Other workers may lose enough hours that they earn less money, even at a higher wage. And yet other workers may be crowded out entirely.

VIGDOR: If you are looking for your first job, never been employed before, and therefore you've never been in our data, it looks like it's become harder to find your way into our data.

In other words, you're not in the data because you're not in the workforce. Why's that? Maybe an employer doesn't want to pay a relatively high wage to a young or inexperienced worker.

VIGDOR: A teenage worker comes up to you on Thursday and says, "Can I have Saturday night off? You know, I want to hang out with my friends." The manager says back, "No, I need you to work Saturday night." And the teenager says back, "Well, I quit." And what we heard over and over again from the business owners and managers is that with a higher minimum wage, I want someone experienced. I need someone who I can rely on, who I don't have to train on the job, who I can expect to be reliable day in and day out. And the older workers who have the track record, they have the references that you can check, and when you get right down to it, they need the job. They have to have the job. And that's going to lead them to be a more reliable worker than the kid who is sort of indifferent between showing up for work and playing Fortnight.

Not all teenagers, of course, would treat a job so cavalierly. But Vigdor's research suggests that a higher minimum wage may lead employers to treat all teenagers as a risk. And what happens when a young person who wants to work can't get in the workforce? Walter Williams, the prominent Black economist who died last year, argued that minimum-wage laws contributed to the high rate of unemployment among Black men, since kids who used to get their first job at 13 or 15, like he did, were now getting priced out of the market by employers. And then many of them, especially those with low education, would never enter the labor force. I asked the economist David Neumark about this theory.

NEUMARK: I think it's a very interesting hypothesis. It's plausible on the surface. There is disappointingly little evidence either way on that question. If it forecloses a young person getting a job, that has longer-run adverse implications for what we call their human capital accumulation. I mean, two huge contributors to wage growth, why people earn more, are schooling and job experience. And there's actually some evidence on that. I have a paper that looks at if you're a teenager where minimum wages are high, how are you doing later, like 30 or so? And the answer is a little bit worse. BOOKER: Well, that's sort of saying, "Let's not raise the minimum wage because we have an inferior education system."

Senator Cory Booker again.

BOOKER: You know, why don't we fix those problems, as opposed to saying we're going to pay workers substandard wages, lock millions into poverty or near- poverty, to make up for structural racism that exists?

Booker's point is that poverty exists on many dimensions, and even a $15 minimum wage won't fix everything. To that end, both the Trump and Biden Covid relief packages have sent money directly to families in need, and Biden has proposed several other anti-poverty measures, including money for childcare, paid leave, and free community college. Meanwhile, back to the minimum-wage debate: Jacob Vigdor's analysis of Seattle's minimum wage didn't quite turn into the bar fight he feared, but it was met with some intensity. Here's a Washington Post headline: "A 'Very Credible' New Study on Seattle's $15 Minimum Wage Has Bad News for Liberals." Some critics argued the study wasn't representative enough.

VIGDOR: So, a critique that a lot of people will say about our work, and it's a completely valid critique, is there's no place like Seattle. I mean, the big challenge is coming up with your estimate of what would have happened in Seattle in the absence of the minimum-wage increase. You need to compare Seattle to someplace else. And the basic message is, there's no place like Seattle. You just can't do this.

Seattle, after all, has a red-hot, high-wage economy with firms like Microsoft and Amazon, with strong trickle-down demand for restaurants and other services. Also: Seattle has a relatively low population of teenagers - and many of them come from higher-income families. But Vigdor thinks his findings are useful.

VIGDOR: I think that what our study illuminates that could be more generalizable is more information about the adaptation, and what are the sorts of things that you can expect businesses to do when they face higher labor costs, whether we're talking about Seattle or Mississippi.

So where does Vigdor land on the minimum-wage argument overall?

VIGDOR: What I take away from actually doing the analysis is that the actual impacts of the minimum wage are not necessarily worth all the sound and fury. I mean, we didn't find any evidence that it destroys businesses because the businesses adapt. It does not necessarily transform workers' lives because of the hours question, really. So it's a big fight over what is really not that transformative of a policy.

Betsey Stevenson, the Obama veteran, is a bit more enthusiastic about the transformative power of a higher minimum wage.

STEVENSON: You can go to any C.B.O. report and they'll tell you how many people are lifted out of poverty.

C.B.O. is the Congressional Budget Office.

STEVENSON: It'll tell you how many children are lifted out of poverty. And if I gave you a policy proposal that had the benefits that C.B.O. cites and the costs that C.B.O. cites and didn't tell you what it was and said, "Is this something that you think will be good for society?" I think most people would say, "Yeah, I'd take those tradeoffs." But the problem is that somehow the idea of a minimum wage has been very hard for the United States to wrestle with.

In other words: the minimum-wage argument has become, like many economic arguments, a political argument. But there's another angle to entertain - probably a much more important angle in the long run. David Neumark again:

NEUMARK: So there's certainly a popular perception and anecdotal evidence that a higher minimum wage spurs automation.

That makes sense, doesn't it? That as human labor gets more expensive, it becomes more attractive to automate labor.

NEUMARK: There is some evidence that this happens. The data are consistent with the anecdotes. Now, I think you've got to be really careful about this, because automation is going to happen anyways, right? I mean, if we compare the economy to where we were before 1938, when the minimum-wage law passed, we have a lot more technology and a lot more automation doing things workers used to do. Is that all because the minimum wage? No, of course not.

And Arin Dube again:

DUBE: Automation doesn't just reduce employment. It can sometimes change what kind of employment happens. As you increase automation, you change tasks. So workers don't do certain tasks anymore, but then they do other tasks. And as a result, I actually don't believe in the very pessimistic version of automation.

Is this true? Do automation and robotics and other work-changing technologies really create more, even better opportunities for human workers? That's the question we'll ask next week.
* * *
Freakonomics Radio is produced by Stitcher and Renbud Radio. This episode was produced by Zack Lapinski. Our staff also includes Alison Craiglow, Greg Rippin, Mark McClusky, Matt Hickey, Mary Diduch, Emma Tyrrell, Lyric Bowditch, and Jacob Clemente. We had help this week from Jasmin Klinger. Our theme song is "Mr. Fortune," by the Hitchhikers; the rest of the music was composed by Luis Guerra. You can subscribe to Freakonomics Radio on Apple Podcasts, Stitcher, or wherever you get your podcasts.

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The True Story of the Minimum-Wage Fight - Freakonomics

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Backers of a $15 federal wage say it's a no-brainer if you want to fight poverty. Critics say it's a blunt instrument that leads to job loss. Even the economists can't agree! We talk to a bunch of them - and a U.S.

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I think a lot of people don't look deeper into how an increase in minimum wage would affect things across the coutry, they just think about being paid more for doing less. This article does a great job of listing out the Pro's and Con's.

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On July 18, 2019, the U.S. House of Representatives passed an amended version of the Raise the Wage Act of 2019, which would gradually increase the federal minimum wage to $15 an hour by 2025. The current federal minimum wage is $7.25 an hour and has not been increased since 2009.

The bill died in the Senate, however, as the Senate Committee on Health, Education, Labor, and Pensions declined to vote on the legislation (or to discuss any increase in the minimum wage, for that matter). As a result, the debate about whether to lift the minimum wage rages on.

With Joe Biden winning the presidential election in November 2020, a federal minimum wage of $15 an hour might be closer, as it is one of his policy agendas. The discussion around the increase in the federal minimum wage brings both pros and cons.

Key Takeaways

Understanding the Minimum Wage

Minimum wage refers to the legally established lowest amount that employers are required to pay their employees for their work. It serves as a baseline wage that is intended to ensure that workers receive a fair compensation for their labor, covering basic living expenses and preventing the exploitation of low-wage workers.

The primary purpose of minimum wage is to provide workers with a level of income that allows them to meet their essential needs. It acts as a safeguard against extremely low wages and helps reduce poverty and income inequality within a society. By setting a minimum wage, governments aim to promote decent working conditions and provide a degree of economic security for workers.

National and sub-national government entities analyze several factors when considering whether to raise or maintain the current level of minimum wage. As the general increase in prices over time, inflation can erode the purchasing power of wages. Economic conditions such as the state of economy may call for adjusted labor market dynamics. Social equity considerations may call for more livable wages. Regardless of the consideration, there are various reasons to support and to detract from raising the minimum wage.

Pros of Raising the Minimum Wage

The primary argument advanced in favor of raising the minimum wage is that higher earnings would improve the overall standard of living for minimum wage workers by providing them with a more appropriate income level to handle the cost of living increases.

A 2022 study by the Congressional Budget Office analyzed the macroeconomic impact of the standard minimum wage reaching $15 per hour in 2027. The data reported 10.9 million workers would be directly affected, while an additional 9.2 million workers would potentially be affected. The total directly or potentially affected workers by 2032 would surpass 23 million.

While some proponents of raising the minimum wage estimate that a much larger number of individuals and families will move out of poverty if they earned more money, a related potential benefit is a projected reduction in the need for federal and state government expenditures on financial aid for poor and low-income individuals.

Meanwhile, an intangible benefit that could translate into tangible benefits for both companies and employees is improved employee morale resulting from higher wages. Business owners frequently note the challenge of providing sufficient encouragement to spur workers to put maximum effort into their job duties, and that this is particularly problematic with low-wage workers who feel that their job efforts aren't keeping them out of poverty.

Increasing employee morale could easily translate into more tangible benefits, such as increased employee retention and reduced hiring and training costs. Employees who are more inclined to stay with a company longer could benefit from greater advancement and from an overall reduction in job-related relocation expenses.

A boost to economic growth is another potential advantage of increasing the minimum wage, as consumer spending typically increases along with wages. A higher minimum wage would put more discretionary dollars in the pockets of millions of workers; money that would then flow to retailers and other businesses.

Cons of Raising Minimum Wage

Among the disadvantages of increasing the minimum wage is the probable consequence of businesses increasing prices, thus fueling inflation.

Opponents argue that raising the minimum wage would likely result in wages and salaries increasing across the board, thereby substantially increasing operating expenses for companies that would then increase the prices of products and services to cover their increased labor costs.

Increased prices mean a general increase in the cost of living that could essentially negate any advantage gained by workers having more dollars in their pockets.

Another projected problem resulting from an increased minimum wage is that of potential job losses. Many economists and business executives who point out that labor is a major cost of doing business argue that businesses will be forced to cut jobs to maintain profitability.

The same 2022 study mentioned above by the Congressional Budget Office also analyzed how higher wages may result in the elimination of roles. By 2027, the CBO estimated that up to 1.6 million jobs would be lost. By 2023, this would increase to 1.9 million lost jobs.

One potentially negative impact that is less readily apparent is the possibility that a higher minimum wage would result in increased labor market competition for minimum wage jobs.

The net outcome of an increased minimum wage might be a large number of overqualified workers taking minimum wage positions that would ordinarily go to young or otherwise inexperienced workers. This could impede younger, less experienced entrants to the job market from obtaining work and gaining experience to move their careers forward.

How Does Minimum Wage Affect the Economy?

The impact of minimum wage on the economy is a complex issue. Supporters argue that increasing minimum wage can stimulate consumer spending and boost the overall economy by putting more money in the hands of low-wage workers. Critics, on the other hand, warn that higher labor costs might lead to job cuts, automation, and increased prices for goods and services.

Is Minimum Wage the Same for All Workers?

No, minimum wage laws often take into account different categories of workers. For example, there might be different minimum wage rates for adult workers, minors, or workers in specific industries. Tipped employees, like servers in restaurants, may also have a lower minimum wage due to the expectation of receiving tips.

Does Inflation Impact Minimum Wage?

Yes, inflation can erode the purchasing power of minimum wage over time. To address this, some governments index minimum wage to inflation rates. This means that the minimum wage is adjusted periodically to ensure that its real value remains relatively constant.

How Does Minimum Wage Affect Small Businesses?

The impact of minimum wage increases on small businesses can vary. Some small businesses might struggle to absorb the additional labor costs, potentially leading to layoffs or reduced hours. Others might adapt by increasing prices or finding operational efficiencies to mitigate the impact.

Do All Countries Have Minimum Wage Laws?

While minimum wage laws are prevalent in many countries, not all nations have implemented such legislation. The presence and level of minimum wage often depend on a country's economic structure, labor policies, and social priorities.

The Bottom Line

Raising the federal minimum wage to $15 an hour is a policy goal for many lawmakers. Increasing the minimum wage is expected to lift individuals out of poverty and improve work ethic, however, it also comes with many possible negative implications, such as inflation and a loss of jobs.

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What Are the Pros and Cons of Raising the Minimum Wage?

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With the debate on wages continuing in Congress and in the public arena, here are some of the major pros and cons of raising the minimum wage.

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I figured it might be nice to have this here as well as in the book.

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The Minimum Wage Explained in One Minute

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Understanding the breadth of wage discrimination charges is critical to ensuring that the United States pursues solutions responsive to the diverse needs of workers.

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I found this article to be very interesting. It mentioned that with the country's labor shortage, many companies have tried offering higher pay to new employees.

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Starbucks announced Wednesday it will be raising its minimum wage across the country to $15 an hour. The news comes amid a labor shortage that has swept the country in the wake of the COVID-19 pandemic, and after President Biden signed an executive order in April raising federal contractors' minimum wage to $15 an hour. Starbucks said the pay increase, which is set to be enacted by summer 2022, is one of the most significant investments in its "partners" (what the company calls its employees) in its history.

According to the announcement, the pay hike will "recognize and reward" tenured staff, with hourly employees earning an average of $17 an hour and a new range of $15 to $23 an hour for baristas by the summer.

In November 2020, Starbucks increased its hourly wages for baristas as voters showed support for a higher minimum wage. But, according to Business Insider, many Starbucks workers have been pushing for an across-the-board pay raise, petitioning for a $15 minimum starting wage. Analysts say a pay hike would cut the company's bottom line, particularly because they are not a franchise and therefore have no franchisees to cover the added costs.

"As Starbucks celebrates our 50th anniversary we are reminded that our heritage is based on the simple concept that our green apron partners are the heartbeat of Starbucks and that success is best when it's shared," said Kevin Johnson, Starbucks president and chief executive officer. "Today, we are announcing another historic investment in our partners, knowing that when we take care of our partners, they take care of our customers, and all stakeholders benefit. This is how we continue to build a great and enduring company. One that is committed to the ideal that doing good for one another - and for society - is good for business over the long-term."

Many companies have tried to attract more employees with increased pay during the country's labor shortage which has seen workers quitting and stores closing early due to being understaffed. And the plight of food workers during the pandemic has not made it any easier to bring on new talent right now.

In a letter to all U.S. Starbucks employees, Rossann Williams, Starbucks' executive vice president and president of North America, said the "partner experience" was essential to Starbucks.

"When others were closing stores and laying off people, we doubled down with COVID-19 pay and benefits AND we made a record investment in partner wages and experience," said Williams in the letter. "And today, we're announcing yet again one of the biggest partner investments in our history!"

Effective in late January 2022, employees with two or more years of service could receive up to a 5% raise and staff with five or more years could receive up to a 10% raise.

In today's job market where there's a noticeable shortage of workers, Starbucks said they will double down on recruitment, extending $200 referral bonuses to help attract new talent.

Williams said in the letter that these raises represent an investment of more than $1 billion on the part of Starbucks in less than 24 months and that the investments the company will be making go beyond enhanced wages.

Starbucks will also invest in more in-store training for new hires, redesigning their "Barista Basics" program and increasing training time for all roles.

Further innovations will include testing of a "shifts app" that would make it easier for partners to work available shifts that meet their personal needs, improvements in store design and equipment and testing a Cold Beverage Station in select stores around the country.

All this comes as Democrats seeks to increase the federal minimum wage, which is currently $7.25 to $15 an hour. Some economists think that the rate increase is a good idea as jobs in the service industry are necessary and demanding, while others say the hike would make it difficult for many restaurants to stay in business.

"Research has shown companies that pay higher wages have lower turnover, which can raise productivity through lower search, training, absentee and vacancy costs and higher morale," Erica Groshen, Senior Economics Advisor at the Cornell University School of Industrial and Labor Relations, told TODAY Food. "So, there is a benefit to the companies that can mitigate the apparent higher costs of raising wages."

Groshen believes it is possible for business profits to be higher with higher wages.

"For the restaurant and other industries, this may lead some companies to change their business models to offer better-developed career paths and emphasis on worker training, rather than hoping that robots will lead to a minimum number of interchangeable workers," she said.

"Median worker compensation in inflation-adjusted terms has been stagnant for 40 years," she continued. "It is possible that the pandemic has triggered a combination of individual, corporate, policy and organized actions sufficient to finally move the needle."

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Starbucks is raising its minimum wage across the country to $15 an hour

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Starbucks announced Wednesday it will be raising its minimum wage across the country to $15 an hour. The news comes amid a labor shortage that has swept the country in the wake of the COVID-19 pandemic, and after President Biden signed an executive order in April raising federal contractors' minimum wage to $15 an hour.