Cheerleading might sound like a fun job, but as lawsuits against five NFL teams this year show, there’s lots of hard work that goes into the smiling faces and crisp routines—work that is barely rewarded. Cheerleaders for the Oakland Raiders, Buffalo Bills, Cincinnati Bengals, and New York Jets allege that they are paid less than minimum wage—saying their annual salaries sometimes come to just $2 an hour, when time spent at games and practices are taken into account—and that they have been made to use that small sum of money to buy their own travel, hair styling, and makeup.
But cheerleaders aren’t the only ones getting screwed over by low pay. We’re all working very hard. And many of us aren’t getting a whole lot in return. The bottom 60 percent of the workforce hasn’t gotten a raise in a decade, and, for some, pay has even fallen. That’s in spite of the fact that productivity has continually climbed higher, as have corporate profits—both outpacing wage growth by a long shot. The basic bargain that Americans put in a hard day’s work and share in some of the bounty they produce has been broken.
The current status of wages in America is even more galling if you consider the myriad tools we have to make sure work pays enough to live on. One incredibly simple way is to raise the minimum wage (although Republicans have stood in lockstep against an increase during the Obama years despite their support under Bush). It would put millions more in the pockets of working people. In the 1960s, the minimum wage kept a family of three out of poverty; now it’s not enough to keep a parent, working full time, year round, above that level. And it wouldn’t just benefit those at the very bottom. Millions making just above that wage level would also likely see a raise as pay levels adjust to take the new floor into account. Those who oppose the wage warn that the benefits would be offset by job losses, but there’s reason to believe damage would be minimal or perhaps even nonexistent.
Many workers aren’t even getting the pay they’ve been promised for the work they do. Complaints of wage theft, like that experienced by NFL cheerleaders, jumped by 400 percent between 2000 and 2011. It’s rampant in some industries: 89 percent of fast food workers say they’ve been made to work for free off the clock, denied overtime pay, or simply paid less than minimum wage. More is stolen from low-wage workers than is robbed from banks, gas stations, and convenience stores combined. Lawmakers in a handful of cities and two states, Colorado and New York, have passed anti-wage theft ordinances to crack down on companies that steal wages and make it easier for workers to bring claims.
But that’s just a start. There are other ways to reconnect hard work and decent pay that don’t involve government action, but instead hand employees more power so they can ask for more. Historically unions have played a significant role in this equation. But falling unionization rates have coincided with a drop in middle class incomes and an increase in income inequality. It’s become harder to unionize, but easing the way for workers to band together and demand better pay would start to balance the power. “We’re not really going to get wages to grow in line with productivity without a more robust system of collective bargaining,” Lawrence Mishel, president of the Economic Policy Institute, told me. One way to get there would be to “develop a system where collective bargaining can emerge that covers an entire occupation or an entire industry,” he suggested, rather than shop by shop as it is now, particularly in sectors like fast food, where each location is owned by a different franchisee. (Although the path to unionizing fast food workers may now be easier with the National Labor Relations Board saying that McDonald’s is responsible for what happens in all of its stores, franchises or no.)
Combating unemployment can also increase wages, even for people who are employed. “The last time we really had serious, broad-based wage growth was when unemployment was under 4 percent, in the late 1990s,” said Mike Konczal, a fellow at the Roosevelt Institute. A tighter labor market makes each worker more valuable because there are fewer of them waiting in the wings for any given job. Companies can no longer expect to hire or keep employees at a low wage. “Then you see employers do things like hunt [for more workers], try to find workers who have been unemployed a long time, or make special efforts to train people,” he added. The idea isn’t just to try to backfill the crater created by the Great Recession, but to aim for full employment, when all people who want a job have one for as many hours as they need.
One tool for fighting unemployment lies with the Federal Reserve. “In general, in the past 30 years, the Fed has been much more concerned about inflation than unemployment,” Konczal said. The Fed is in the business of expectation setting, and if it said it would tolerate higher inflation, that could change the way companies view their priorities. “The recovery would probably be swifter,” he explained. “Companies that understand that inflation would go up would be quicker to invest and sit on less cash. Instead they’d invest, they’d hire more people and more money would circulate in the economy.” All of that would help the unemployment rate drop—perhaps all the way to full employment.
Other nudges to get companies to invest instead of hoard their money would also go a long way. The German model is to put workers on company boards to represent the interests of their peers. It also helps “keep a little bit more wealth in the firm, rather than using firms as piggy banks to pump money out to shareholders,” Konczal said. “You see a lot more [money being put toward] dividends and corporate buybacks and less in investment than you would have historically, and that in turn involves wages for everyday workers.” For example, for the same sum that Walmart spends on buying back its own stock shares, it could raise every one of its workers’ pay to $25,000 from the $8.50 an hour cashiers make on average. Even if companies didn’t put that money directly toward higher pay, just spending more on new product lines or equipment would likely require them to hire more workers—which in turn would also help drive up wages by reducing unemployment overall.
Finally, immigration reform may sound unrelated—or, for some critics, counter-productive to raising wages—but it could actually help increase them if it were to ever escape the current gridlock. Undocumented workers make significantly less than documented peers: Undocumented Mexican immigrants earn about 28 percent less than Mexican immigrants who come legally. “When one group of workers is working for substandard or degraded wages, it hurts them and it hurts other people like them in the market,” Mishel said. “One of the things that the presence of undocumented workers does is create a large pool of exploitable, vulnerable workers.” Just as with high rates of unemployment, having lots of workers you can pay less and treat worse means companies don’t have to pay everyone else better wages. “The fight for citizenship for the undocumented is also a wage issue,” Mishel said. “It’ll lift up those workers and lift up workers in the same communities, same occupations, same industries that they work in.” Gaining legal status means about a 15 percent bump in wages within five years. This holds true not just for low-wage immigrants, but those on work visas in high-tech occupations who can’t switch jobs.
It’s a complex problem with a variety of ways to tackle it. “I think all of these different things have to happen in order to lift wages throughout wage scale,” Mishel said. Without any action at all, wages might continue to grow as they are now, at the slowest rate since at least 1965. That will leave more and more families struggling to get by while working full time, which bodes poorly for our economy.
Bryce Covert is Economic Policy Editor at ThinkProgress and a contributor at The Nation.