How not to fight inflation

Oh my!

Three New Year’s Resolutions to lift up workers and their families in 2023

As we look toward a new year and a new Congress, we hope policymakers will resolve to: 

1. Strengthen unions and the right to strikeUnion approval hit its highest point since 1965, yet only 11.6% of workers are represented by a union. Labor law reforms that restore workers’ right to form unions and strengthen the right to strike would help ensure workers have the leverage they need to secure their share of economic growth.

2. Boost worker pay and tackle wage inequality The value of the federal minimum wage is at its lowest point in 66 years. After the longest period in history without an increase, the federal minimum wage today is worth 27% less than 13 years ago—and 40% less than in 1968. Meanwhile, worker productivity has continued to increase, but the typical worker has not seen that reflected in their wages: Productivity has grown 3.7 times as much as worker pay since 1979.

3. Make pay more equitable for teachers and address the educator shortage The teacher pay penalty hit a new high of 23.5% in 2021. This gap in pay has been worsening over time, hurting students in public education by undermining teacher retention and recruitment.

Economic Policy Institute (EPI)

See how easy it is, just give more. Surely there are no consequences to strikes, and higher pay independent of other factors.

Unions are fine as long as they are run by responsible leaders who see the mutual concerns of workers and companies and act accordingly. Merely stretching the right to strike is a losing deal. EPI and other liberal organizations often fail to take the long view on just about anything. For example, they may site a company’s great earnings in a year during a labor dispute as a good reason for higher pay and benefits. Improvements in pay and benefits are generally not only permanent, but growing and compounding. A dollars increase in pay is not a dollars, but $1.00 plus all payroll taxes and benefits related to pay, most often retirement plans. Those great profits are not permanent or guaranteed.

The federal minimum wage is nearly irrelevant. Thirty states have a minimum wage above the federal level. Those states with the highest number of minimum wage workers are in the south, in lower cost of living areas. Minimum wage workers are young and not married. See for yourself. Not even two percent of worker earn the federal minimum wage or less.

The teacher pay penalty is nonsense. You cannot compare the job of teacher with other jobs with a same level degree. Teachers work less hours – I know it not just eight hours a day. Other jobs are funded by sales of products and services. Teachers are funded by property taxes which generally are not income related for taxpayers.

Everyone of these ideas pushed by the EPI are inflationary and increase the financial burden of all citizens. It’s fine to seek equitable treatment, but that is more than one side giving more.

3 comments

  1. The minimum wage is not observed except in a handful of cases. No one will work for the 7.25 or whatever it is. Raising it is just virtue signaling on behalf of some pols.

    As mentioned earlier, the bottom 25% of workers should be raised. Sounds good but then the the worker next up the line expects a raise so you have an unhappy crew on your hands until everybody gets a boost.
    Anyway, hope everyone had a nice Christmas and Santa didn’t heap too much coal in your stockings.

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  2. 1. Why are we worried about union workers? Some of the highest paid workers, who have the union fighting for them already. The other 88.4% of workers are on their own.

    2. Boost worker pay, hell yes, but only the bottom 25%. Enough said, IMHO.

    3. Teachers are paid well for the hours worked and school administrators are over paid.

    4. The minimum wage sets the wage floor and $7.25 is way to low.
    When I was 18 in 1974 minimum wage was $2, that equals $14.57 per
    hour in todays dollars. So, with the production gains we have seen in the
    last 40+ years, it is time for a $15 minimum wage. If not, I guess workers
    today will be much worse off by retirement, than most of us Boomers.

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  3. Caught me of guard with this one. I thought it was going to be about the latest $1.7 Trillion spending bill.

    Teachers are leaving because of the lack of enforced discipline in the classroom and all the crazy rules that they must follow. Many private schools and home schooling parents have proven that throwing money at teachers does not improve test scores.

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