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age federal agencies to consider labor agreements by project or consider prehire collective bargaining agreements on large scale construction projects; and require that workers on service contracts who would otherwise lose their jobs as a result of the completion of a contract be given the right of first refusal for employment with successor contractors. 15 In addition, the president has consistently appointed pro-worker board members to the National Labor Relations Board, or NLRB, the independent federal agency charged with safeguarding workers’ right to organize into unions. In October 2015, the Obama administration helped jumpstart a national dialogue about how to strengthen worker voice and power by convening a White House summit on the issue. 16 Increased global competition A second shift that has driven a wedge between economic growth and wages for many U.S. workers is increased competition from low-wage labor in other countries. U.S. open-trade policies after World War II helped Europe, Japan, and other allies build or rebuild their middle classes. In the past 30 years, however, the United States has witnessed the opening of China, India, Eastern Europe, and other emerging economies around the world, absorbing new entrants to the global labor market with populations much larger than that of the United States, some of which also deploy aggressive export-led development strategies. 17 At the same time, rapid changes in technology and financial market incentives have enabled and encouraged U.S.-based companies to coordinate production across national borders, putting domestic workers into direct competition with workers in other countries. 18 The parallel rise of the “knowledge economy”—the growing importance of intellectual property, or IP—has also shifted the relative strength of labor versus capital at a global level. 19 In the past two decades, the ease of global transport and communication means that firms can shop around like never before for the lowest labor costs; weakest worker and environmental rights; minimal taxes; and highest subsidies. To obtain market access, companies also come under intense pressure from foreign govern- 30 Center for American Progress | Raising Wages and Rebuilding Wealth
ments to open production sites in local markets, as well as from competition from state-backed enterprises and industrial acquisition strategies. Together, we have witnessed a race to the bottom on a wide array of norms and standards. 20 A growing body of research documents the effects of trade on U.S. workers’ wages. MIT’s David Autor and others have shown that the more a U.S. region was exposed to Chinese import competition between 1990 and 2007, the more it experienced declining wages, employment, and labor force participation. 21 Another study exploring the reasons for the declining share of income going to employees’ wages, salaries, and benefits—which it calls the “payroll share”— found that globalization has been a key factor and that “increases in import exposure of U.S. businesses can explain about 3.3 percentage points of the 3.9 percentage point decline in the U.S. payroll share over the past quarter century.” 22 Rising global trade competition, of course, has also benefitted the middle class through lower costs and greater variety of goods. Fred Bergsten of the Peterson Institute for International Economics estimates that benefits from increased trade translated into an additional $9,000 in inflation-adjusted income between 1945 and 2003 for the average American household. And this is to say nothing of the millions of people in other countries able to join the middle class due to rising global trade. Trade and foreign market access are also important for tapping new growth opportunities for U.S.-based parts of the value chain. They can further help build a middle class around the world that can be a source of demand for U.S. goods and services, as well as a driver of new democracies. 23 But those benefits can only accrue when trade meets certain basic norms and standards. For example, trade law has long recognized the importance of a level playing field in the form of prohibitions on unfair “dumping” products abroad below their domestic cost or of governments subsidizing products or services to boost market share. 24 In recent years, progress has been made, for example, on better coordination of international tax transparency and by adding state-owned enterprise concerns into trade agreements. However, significant risks, practical details, and obstacles, such as insufficient enforcement, remain. The challenge of growing global low-wage labor competition can also be met, in part, with a vigorous set of policies to better tap the full potential of people and better adjust to the new realities of an IP- and skills-driven economy. Jobs and Wages | www.americanprogress.org 31
Page 1: AGENCY/PHOTOGRAPHER Raising Wages a
Page 5 and 6: Contents 1 Introduction and summary
Page 7 and 8: CHAPTER 1 Introduction and summary
Page 9 and 10: Nevertheless, public policy can and
Page 11 and 12: of growth came to an end. Middle-cl
Page 13 and 14: The main reason middle-class income
Page 15 and 16: The above analysis of incomes focus
Page 17 and 18: TABLE 1.2 Wealth across demographic
Page 19 and 20: FIGURE 1.6 The cost of education, h
Page 21 and 22: Policy response and recommendations
Page 23 and 24: • Address the labor market effect
Page 25 and 26: Health care • Address cost shifti
Page 27 and 28: Endnotes 1 Authors’ analysis of M
Page 29 and 30: Introduction and summary | www.amer
Page 31 and 32: CHAPTER 2 Jobs and Wages By Michael
Page 33 and 34: One of the most striking aspects of
Page 35: In sum, these five factors leave ma
Page 39 and 40: The deterioration of other regulato
Page 41 and 42: ate returned to its 2001 level. The
Page 43 and 44: This speaks to a larger challenge t
Page 45 and 46: Underinvestment produces chronic ro
Page 47 and 48: sidized jobs program that would hel
Page 49 and 50: Restore worker bargaining power We
Page 51 and 52: Rebuild labor standards and the bro
Page 53 and 54: Additional steps should also be tak
Page 55 and 56: Policymakers should work with stake
Page 57 and 58: At the same time, we can take actio
Page 59 and 60: Endnotes 1 Authors’ analysis of C
Page 61 and 62: 52 Charles Whalen and Felix Reichli
Page 63 and 64: 96 Julia Gordon, “Inequality, Opp
Page 65 and 66: prehensive immigration reform. Pass
Page 67 and 68: An Immigration Policy that Works fo
Page 69 and 70: CHAPTER 3 Early Childhood By Katie
Page 71 and 72: Due to these high costs, parents ar
Page 73 and 74: information available to parents. 2
Page 75 and 76: Policy recommendations Two new poli
Page 77 and 78: Endnotes 1 Annie E. Casey Foundatio
Page 79 and 80: Early Childhood | www.americanprogr
Page 81 and 82: CHAPTER 4 Higher Education By Ben M
Page 83 and 84: FIGURE 4.1 Average tuition and requ
Page 85 and 86: FIGURE 4.3 Net price of public four
Page 87 and 88:
Policy recommendations Increasing h
Page 89 and 90:
Endnotes 1 Bureau of Labor Statisti
Page 91 and 92:
for the same home. 9 Furthermore, t
Page 93 and 94:
LGBT People Face Significant Barrie
Page 95 and 96:
CHAPTER 5 Health Care By Maura Cals
Page 97 and 98:
Health care benefits are part of a
Page 99 and 100:
When combined, these trends meant t
Page 101 and 102:
Policy recommendations The ACA made
Page 103 and 104:
The notice should outline how much
Page 105 and 106:
Require drug companies to justify p
Page 107 and 108:
Endnotes 1 Mark W. Stanton, “Empl
Page 109 and 110:
Health Care | www.americanprogress.
Page 111 and 112:
Workers with disabilities are also
Page 113 and 114:
with disabilities, child care provi
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23 Faye Ong, ed., Inclusion Works!
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CHAPTER 6 Housing By Sarah Edelman
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FIGURE 6.1 Homeownership rate 75% 7
Page 121 and 122:
middle-class households: The share
Page 123 and 124:
Homebuyers in the coming decade may
Page 125 and 126:
Support and expand low down payment
Page 127 and 128:
Changes such as these have faced pu
Page 129 and 130:
for lots and rules against construc
Page 131 and 132:
20 Ibid. 21 Joint Center for Housin
Page 133 and 134:
63 CAP published a report in Decemb
Page 135 and 136:
African American and Latino workers
Page 137 and 138:
Endnotes 1 Due to a lack of disaggr
Page 139 and 140:
CHAPTER 7 Retirement By David Madla
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FIGURE 7.1 Households are not build
Page 143 and 144:
FIGURE 7.3 Middle class households
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The federal government plays a larg
Page 147 and 148:
Modernize survivorship and divorce
Page 149 and 150:
Fully implement the conflict of int
Page 151 and 152:
27 Christian E. Weller and David Ma
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Retirement | www.americanprogress.o
Page 155 and 156:
CHAPTER 8 Conclusion By Brendan Duk
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The country will elect a new presid
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Conclusion | www.americanprogress.o
Page 161 and 162:
Thomas Huelskoetter is the Research
Page 163 and 164:
Acknowledgements The authors would
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