Politics of Poverty

The map of working America has become a wild patchwork of inequality

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Working women in the US face dramatically different conditions and wages based on where they live and work. Tipped minimum wages range from $2.13 an hour to $13.69 an hour. Women and people of color are disproportionately represented in the tipped workforce. Photo: adamkaz

Working families are struggling to stay afloat as the currents against them run stronger every day. While the federal government fails to take action, conditions and compensation steadily decline. Some states have stepped into the void and improved the outlook for workers; others have done nothing. The result? An ever-widening divide.

Inequality comes in so many forms in the US, it’s hard to keep track. While luck and drive may power some people to thrive, most of us face the limitations of systems built on constructs around race, gender, age, education, family wealth, and more.

Add to this: geography. When it comes to inequality, our country has become extremely stratified along state lines.

State laws and policies play a huge role in determining how residents’ lives unfold. This is especially true when it comes to labor laws.

And it’s especially true right now, because the federal government has been dragging its feet for decades on improving standards for workers in the US. With federal laws frozen in time, compensation, conditions, and rights for workers are deteriorating.

As we updated the Best States to Work Index (BSWI) for the fourth year in a row, we found a disturbing trend toward deepening inequality: states at the bottom refuse to raise standards above outdated federal mandates, while states at the top are consistently taking progressive action. Bottom states are falling lower; top states are rising higher.

Where you live and work makes an enormous difference in your income, safety, rights, and future.

Standing still means going backward

If a worker is left to rely on federal law, she finds herself in a precarious position.

On wages: The federal minimum wage has been stuck at $7.25 an hour for twelve years. In that time, all costs of living have climbed, but the wage hasn’t budged. It is now a poverty wage for a family of two. The federal tipped minimum wage has been $2.13 for THIRTY years.[1]

On conditions: While important agencies like OSHA and the Department of Labor have been losing funding and teeth in recent decades, dangers in the workplace are on the rise. Extreme climate events like fires, floods, and scorching heat affect workers, as does the pandemic; yet, federal OSHA still has not issued standards for heat or COVID-19.

In addition, the US continues to be an outlier among wealthy nations in failing to mandate paid leave for illness, maternity, or family emergencies. The consequences have always been harsh, but during the pandemic—with no way to safely isolate without losing income—they have become downright deadly.

On rights to organize: While the federal government neglects to pass legislation (such as the PRO Act) that would protect workers’ rights to organize, state legislatures are using their power to repress efforts to organize, unionize, and bargain collectively. The decline of unions in the US correlates closely with the decline of compensation and conditions, and an increase in inequality.

As some states move forward, others move back

The 2021 BSWI index looks much as it has each year since the inaugural edition in 2018. The top states are, for the most part, on the east and west coasts; the bottom states are largely in the south. Disquieting trends are exacerbating the disparities.

On wages: While most states have raised the minimum wage above the federal standard, 21 have left it at $7.25 ($290 a week). This wage has lost value over the last 12 years. In South Carolina, for example, it now covers just 22% of the basic cost of living (for a family of four, based on the MIT Living Wage Calculator).

On the other end of the scale, the highest minimum wage in the country is in the District of Columbia, where $15.20 an hour covers 40% of basic cost of living.

So, while no family can live decently on a single earner’s minimum wage, a household with two earners may manage to make ends meet in one state—paying the rent and putting food on the table—while in another that’s not possible.

On conditions: Top states in the index have made several improvements over the past four years, while bottom states have done little or nothing. The upshot is that workers in Oregon—number one in the index—enjoy a wide array of protections, including accommodations for pregnancy and breastfeeding; mandates for paid sick and family leave; controls around scheduling practices; protections for workers excluded from federal labor law (such as domestic workers); and more. In North Carolina, the lowest-ranking state, not a single one of those protections is in place.

These conditions are particularly important for women and parents, as they struggle to balance the demands of maintaining households and families while still reporting to work and earning money.

On rights to organize: Workers in several states at the top enjoy robust protections around their rights to organize; the bottom states do little or nothing to protect these rights. Georgia, North Carolina, and South Carolina score zero points in this dimension in the index, leaving millions of workers with scant rights to organize and bargain collectively.

The bottom line?

As we have left it to the states to determine the most fundamental elements of life on the job, we have ended up with a troubling patchwork of laws, where a worker in one state faces poverty wages, no protections, and no rights to organize, while a worker in another earns twice as much and enjoys robust protections and rights.

What is to be done, then? It’s not that complicated. On a state level, it’s pretty clear which laws should be passed and which should be eliminated.

It’s on the federal level that we need real, urgent, transformational action; all workers deserve dignity and adequate wages. We must:

  1. Increase the federal minimum wage to a level consistent with basic costs of living, indexed to inflation and increases in cost of living over time.
  2. Pass the PRO Act or similar legislation that would overrule state “right-to-work” laws, and enhance protections for worker voice and collective bargaining.
  3. Pass comprehensive paid family leave and paid medical leave.
  4. Pass an Essential Workers Bill of Rights.
  5. OSHA must issue an Emergency Temporary Standard (ETS) around COVID-19 protections for all workers at risk of exposure (expanding beyond the health care standard that has been issued) and around the increasing risk of heat illness driven by climate change.

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Workers across the board deserve decent working conditions, fair compensation for their labor, and opportunities to organize. The Biden administration may recognize this, but until we see results, working families will continue to pay the price for decades of federal inaction. We are headed for a future of deepening inequality, eyes wide open. But there is an opportunity now for course correction. Let’s gather our forces and take it.

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[1] The tipped minimum wage is based on the assumption that customers will compensate workers directly, and that employers are legally obligated to ensure that servers earn at least the state minimum wage if tips are insufficient. However, the enforcement of that mandate is rare, leading to rampant wage theft. Only a few states have a tipped minimum wage equal or close to their minimum wage. The reliance on customers to make up the difference in wages leads to disproportionately high levels of sexual harassment for workers, especially women, in tipped minimum wage jobs. A more robust tipped wage not only boosts wages for women, it also protects them from risks of sexual harassment on the job.

And because people of color are disproportionately represented in these jobs, an increase in the tipped minimum wage reduces the racial pay gap.

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