December 8, 1998. New from the Fiscal Policy Institute:

The Fiscal Policy Institute today joined with two national organizations, Jobs with Justice and the National Priorities Project, and state and local organizations throughout the country, in recommending four practical strategies for closing the gap between CEO and worker pay. These groups also highlighted several ways in which federal and state government can assist working families in making ends meet and moving up the economic ladder.

To underscore the need for these practical economic strategies, the Fiscal Policy Institute released a new report, Working Hard, Earning Less: The Story of Job Growth in New York State, which shows that most of the new jobs that are being created in New York State do not pay a livable wage.

According to FPI’s Executive Director, Frank Mauro, “It isn’t that our economy could function effectively without the jobs that are being created. In fact, those jobs are necessary for our economy to deliver the goods and services that consumers and businesses are demanding. The problem is that employers can get people to do an increasing number of necessary jobs for less than a liveable wage because of a number of changes in public policy that have occurred in recent decades at the federal, state and local levels, and the fact that government has failed to respond effectively to a number of major changes in the economy. Deregulation, globalization and the attack on unions have shifted power away from average workers and toward corporations.”

The National Priorities Project and Jobs with Justice have estimated that a New York family of four (two adults and two children) needs to earn $36,583 to meet its basic needs and that a family of three (one adult and two children) needs $33,398. According to the report’s special analysis of New York State data, 70% of jobs in the twenty occupations with the highest projected job growth in New York do not pay a livable wage for a family of four. In fact, 50% of these jobs do not even pay half a livable wage.

The new report also details the vast discrepancy between CEO and worker pay. It would take the median low-wage worker anywhere from 143 years to 812 years to earn what their CEOs make in one year.

The report’s recommendations highlight the following practical strategies for closing the gap between CEO and worker pay:

  • The minimum wage should be increased and indexed to inflation or average wages to protect against future deterioration of its value. The referendum passed in Washington State last month which increases the minimum wage to $6.50 per hour over the next 13 months and then indexes it to inflation, is an excellent model for New York and national efforts.
  • Living wage ordinances, such as those that have been adopted by Los Angeles and Baltimore, can ensure that companies that receive public tax subsidies, abatements, and contracts pay a living wage to their workers.
  • Workers must be guaranteed a process for gaining union representation without management interference and must be provided with better remedies when employers violate organizing rights.
  • Federal legislation should be enacted to prohibit the deduction, for corporate income tax purposes, of executive salaries which exceed 25 times the pay of the lowest paid full time worker at the same business.

In addition, federal and state governments can assist families to make ends meet and move up the economic ladder through increased support for health care, child care, public transportation and job training. The federal and state governments need to make workers and their families a major budget priority.

The data for New York State accompany a more extensive national report. Nationwide, fifteen of the twenty occupations with the highest projected job growth are not likely to pay livable wages. Nationally, almost three fourths of these new jobs are in occupations with median wages below a living wage and almost half (46%) are in occupations which pay less than half a livable wage. The national report also includes first hand accounts from working people of their struggles to support their families and achieve a decent standard of living.