Trickle Up Economics

Contributed by Amara Willey.

Although fair pay and minimum wage legislation would likely help our economy, Republicans continue to block Federal protections that would eliminate gender and race discrimination in pay rates and wages or provide a living wage.

Women working full time in America earn a little over 80 percent of what men make on average, according to the Department of Labor. This gap has other factors besides discrimination, such as women choosing lower-paying fields than men, taking time off to have children, or being less inclined to negotiate.

On March 27, 2019, the U.S. House of Representatives voted to pass the Paycheck Fairness Act, an act designed to amend and strengthen the existing federal Equal Pay Act. With the current Republican held-Senate, however, it’s unlikely that the Fair and Equal Pay Act of 2019 (HR-2039) will become law.

According to the bill,

“the U.S. economy would have produced additional income of $447.6 billion if women received equal pay; this represents 2.9 percent of 2012 gross domestic product.” The act further asserts, “The poverty rate for all working women would be cut in half, falling to 3.9 percent from 8.1 percent” under the bill.

We might ask why Republicans are so loath to accept legislation that would actually stimulate economic growth? Republicans cry job loss whenever fair pay legislation comes to a vote.

Several states including New Jersey, New York, and California already have fair pay legislation in place. Equal pay for equal work legislation typically compares job content rather than job title.

Yet economic figures don’t substantiate Republican fears. In 2019, the real GDP increased 3.7 percent over the previous year in New Jersey. The figure is similar in New York. California’s GDP grew by 4.7 percent, comparable to the same rate in Texas, a state that doesn’t have fair wage legislation. Other states without fair wage legislation, such as Iowa and Alabama, had less growth, 2.3 and 2.7 percent respectively.

The laws that currently protect workers from wage discrimination based on gender and race are the Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964. The proposed legislation tightens loopholes that require employers to prove why they are not offering equal pay based on real comparisons such as education and experience.

Federal Minimum Wage

A number of states have taken steps to raise the minimum wage from its 2009 increase to $7.25 an hour ($290/week). It’s hard to imagine how anyone in New Jersey or Pennsylvania over the age of 18 could live on that salary without working two or three jobs.

Some states — specifically California, Massachusetts, New York, Maryland, New Jersey, Illinois, and Connecticut — have passed laws that gradually raise the state minimum wage to at least $15 per hour. Some major cities such as San Francisco, New York City, and Seattle have already raised their municipal minimum wage to $15/hour.

Legislation backed by Democrats in Congress would also gradually increase the minimum wage to $15/hour, but has little hope of passing with the current Congress.

Some of this legislation is due to the efforts of Fight for $15, which is a political movement working towards a federal minimum wage increase to $15/hour. The movement has involved strikes by low-paid workers such as those in child care, home health care, gas station and fast food workers, with demands to be paid more and the right to unionize. The organization is also advocating for protections for front-line workers, many of whom are in these fields and being forced to work.