Oops, they did it again. After Republicans rammed through their big tax cut, there were a rash of stories about corporations using the tax break to give their workers bonuses. Have the media learned nothing from the Carrier debacle? After all, companies have every incentive to curry favor with a sitting administration by attributing nice things they would have done in any case to Dear Leader's glorious policies. Amid tightening labor markets lots of firms would have been trying to attract or hold workers by offering a bit of money; why not use the occasion to hype something that raises your after-tax profits?
Anyway, now we have enough information to start assessing the real impact of the tax cut. No, it isn't going into wages; you should never have expected that in the short run anyway. What's more, we aren't even seeing the kind of response that would raise wages in the long run. And it's even possible, as I'll explain, that the tax cut could reduce wages.
1. The optimists' theory of the case
What was the theory of the case for those who believed, or at least claimed to believe, that a cut in corporate taxes would be passed through into wages? The story, as told by people like Kevin Hassett or the Tax Foundation, was that (a) markets for goods and labor are close to perfectly competitive, and (b) America is part of a global capital market that more or less equalizes after-tax rates of return. The idea, then, was that by reducing the rate of taxes on corporate profits, America would attract inflows of capital from the rest of the world. A rising capital stock would drive pre-tax returns on capital down and, by increasing competition for labor, drive wages up. In the long run, they claimed, all the benefits would go to workers.
There were multiple reasons not to believe in this story. One reason is that the U.S., if only because of its sheer size, doesn't face a perfectly elastic supply of capital from the rest of the world; even in the long run, we would expect a tax cut to raise after-tax profits. Another is that we're nowhere close to perfect competition: a lot of corporate profits represent some kind of monopoly rent, and there's no reason to expect capital inflows to compete those rents away. indications are even less favorable than the critics expected.
And even if there were some truth to the optimists' case, it's about the long run. In the short run, before there has been time for a major change in the capital stock, we shouldn't expect to see any wage rise at all.
The only way you might see some immediate wage gains would be if two things were true: companies aren't in a highly competitive environment – they have some freedom to set wages – and they have some interest beyond profit maximization in keeping workers happy, either out of the goodness of their hearts or because management doesn't like being hated.
I don't want to totally discount this possibility. Once upon a time, when we had powerful unions and companies like GM saw themselves as having multiple "stakeholders" rather than simply maximizing profits, one could have imagined seeing corporations share some of a tax windfall with workers. And there might be a tiny bit of that mindset operating even today – but as I'll explain shortly, that might not have the implications that you imagine.
2. Tax cuts so far
After initially falling for the bogus bonus story, news organizations have mostly caught up with reality: the tax cut isn't being passed through to workers. Mainly it's being used for stock buybacks.
The failure to raise wages immediately comes as no surprise. It's what even supporters of the tax cut would have predicted, if they'd followed through on the logic of their own analysis.
The prevalence of stock buybacks is, however, another story. The pro-tax-cut case didn't predict a short-run rise in wages, but it did predict a big rise in investment, financed by capital inflows – not simple recycling of the tax cut to investors.
So far, however, as Dean Baker points out, there is no indication of an investment boom. Orders for capital goods aren't up, actual investment spending doesn't seem to rising any faster than before, investment intentions haven't spiked. What this means is that the process that was supposed to raise wages in the long run isn't happening, at least not yet.
One other indicator: if the tax cut were really leading to big inflows of capital, that should be lifting the dollar. In reality, the dollar is weaker than it was before the tax cuts:
So what story do the early data seem to tell? Well, they're consistent with the view that corporate profits include a large component of monopoly rents. In that story, if you give corporations a big tax cut, they don't invest more, compete for workers, or any of that stuff. They just take the money and run, which is what we seem to be seeing.
3. Can tax cuts actually reduce wages?
Let me finish with a possibility I haven't seen mentioned: tax cuts might actually provide companies with an incentive to reduce wages. What? Let me explain.
There's a large literature trying to explain why executive compensation rose so much from the 1960s to the 1990s. One hypothesis, as expounded for example by Piketty, Saez, and Stantcheva, is that CEOs used to pay themselves less than they could have as a way to "make peace" with workers, customers, etc.. And one reason for this self-restraint was that given high marginal tax rates, executives who extracted very high pay packages wouldn't get to keep much of the money anyway.
The point is that when tax rates came down, the payoff to greed went up, and outweighed the former fear of opprobrium.
Now suppose that a bit of that old reluctance to be quite as hard on one's workers as one might remains. And add in the growing evidence that many employers have substantial monopsony power – that is, they aren't facing a competitive labor market, but instead have quite a lot of ability to set wages.
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In this case, cutting corporate tax rates could actually have a perverse effect. Squeezing workers even harder than you already are raises pre-tax profits, but you might be reluctant to do it – and the price of your qualms is less if a substantial part of any profit gain goes to the IRS. Reduce that marginal tax rate, and exploiting workers to the max becomes a more attractive strategy.
I don't really think this is an important effect. But if you believe that corporations are going to share the benefits of tax cuts with workers out of the goodness of their hearts, you have to acknowledge that the price of a good heart has actually gotten higher, not lower, thanks to these tax cuts – because as conservatives like to remind us, it's the marginal rate that matters.
So are workers going to benefit a lot from these tax cuts? There was never a very good reason to think they would, and early indications are even less favorable than the critics expected.
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And even if there were some truth to the optimists' case, it's about the long run. In the short run, before there has been time for a major change in the capital stock, we shouldn't expect to see any wage rise at all.
The only way you might see some immediate wage gains would be if two things were true: companies aren't in a highly competitive environment – they have some freedom to set wages – and they have some interest beyond profit maximization in keeping workers happy, either out of the goodness of their hearts or because management doesn't like being hated.
I don't want to totally discount this possibility. Once upon a time, when we had powerful unions and companies like GM saw themselves as having multiple "stakeholders" rather than simply maximizing profits, one could have imagined seeing corporations share some of a tax windfall with workers. And there might be a tiny bit of that mindset operating even today – but as I'll explain shortly, that might not have the implications that you imagine.
2. Tax cuts so far
After initially falling for the bogus bonus story, news organizations have mostly caught up with reality: the tax cut isn't being passed through to workers. Mainly it's being used for stock buybacks.
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The failure to raise wages immediately comes as no surprise. It's what even supporters of the tax cut would have predicted, if they'd followed through on the logic of their own analysis.
The prevalence of stock buybacks is, however, another story. The pro-tax-cut case didn't predict a short-run rise in wages, but it did predict a big rise in investment, financed by capital inflows – not simple recycling of the tax cut to investors.
So far, however, as Dean Baker points out, there is no indication of an investment boom. Orders for capital goods aren't up, actual investment spending doesn't seem to rising any faster than before, investment intentions haven't spiked. What this means is that the process that was supposed to raise wages in the long run isn't happening, at least not yet.
One other indicator: if the tax cut were really leading to big inflows of capital, that should be lifting the dollar. In reality, the dollar is weaker than it was before the tax cuts:
Image
So what story do the early data seem to tell? Well, they're consistent with the view that corporate profits include a large component of monopoly rents. In that story, if you give corporations a big tax cut, they don't invest more, compete for workers, or any of that stuff. They just take the money and run, which is what we seem to be seeing.
3. Can tax cuts actually reduce wages?
Let me finish with a possibility I haven't seen mentioned: tax cuts might actually provide companies with an incentive to reduce wages. What? Let me explain.
There's a large literature trying to explain why executive compensation rose so much from the 1960s to the 1990s. One hypothesis, as expounded for example by Piketty, Saez, and Stantcheva, is that CEOs used to pay themselves less than they could have as a way to "make peace" with workers, customers, etc.. And one reason for this self-restraint was that given high marginal tax rates, executives who extracted very high pay packages wouldn't get to keep much of the money anyway.
The point is that when tax rates came down, the payoff to greed went up, and outweighed the former fear of opprobrium.
Now suppose that a bit of that old reluctance to be quite as hard on one's workers as one might remains. And add in the growing evidence that many employers have substantial monopsony power – that is, they aren't facing a competitive labor market, but instead have quite a lot of ability to set wages.
ADVERTISEMENT
In this case, cutting corporate tax rates could actually have a perverse effect. Squeezing workers even harder than you already are raises pre-tax profits, but you might be reluctant to do it – and the price of your qualms is less if a substantial part of any profit gain goes to the IRS. Reduce that marginal tax rate, and exploiting workers to the max becomes a more attractive strategy.
I don't really think this is an important effect. But if you believe that corporations are going to share the benefits of tax cuts with workers out of the goodness of their hearts, you have to acknowledge that the price of a good heart has actually gotten higher, not lower, thanks to these tax cuts – because as conservatives like to remind us, it's the marginal rate that matters.
So are workers going to benefit a lot from these tax cuts? There was never a very good reason to think they would, and early
Bad policies sometimes lead to interesting economics. For example, the disastrous turn toward austerity after 2009 was a kind of natural experiment that led to an upwelling of good work on the effects of fiscal policy.
And I'm starting to think that the Trumpian trade war, which finally seems to have arrived, will lead to some good work on international economic policy. Like the work on fiscal policy, it will of course be ignored by people in power. But still worth doing.
In this little essay I'm going to offer some analysis and a few numbers based on a chain of thought that begins with Trump's evident disdain for Japan and ends up in Atlanta, New Orleans, and Buffalo. What? Bear with me if you have a taste for things wonkish.
My starting point is a peculiar aspect of Trump's climb-down on steel tariffs. The ostensible justification for these tariffs was national security; but as was widely noted from the start – although this probably came as news to the Trumpies – most U.S. steel imports come from American allies. And now Trump has granted exemptions to allies that largely vitiate the supposed point of the exercise.
One country that has conspicuously not been granted an exemption, however, is Japan. Why not?
One answer may be that the Japanese aren't, you know, white.
Another answer may be that Trump, who often seems to have fixed ideas about the world that are long out of date – like his belief that American cities are gripped by a huge crime wave – is still living in the Michael Crichton era when Japan was going to take over the world any day now.
Yet a third answer may be that the U.S. does run a trade deficit with Japan – actually even bigger than the headline number if you include Japanese components embedded in Chinese exports – and Trump believes that (a) a trade deficit means that you're losing while someone else is winning and (b) trade balances are determined by protectionism.
Both propositions are, of course, untrue. In reality, trade balances are the flip side of capital flows: countries that attract more inflows of foreign capital than their own outflows must, by the sheer arithmetic, run current account deficits (that is, including investment income). Conversely, countries that are exporters of capital run current account surpluses.
And modern Japan is a country that really should be running current account surpluses, for one powerful reason: demography. Japan has a rapidly declining working age population:
Image
This means limited opportunities for investment, which means that it's a country that should be investing its savings abroad.
But the claim that trade surpluses often reflect weakness, while trade deficits reflect strength, is a very hard sell. And demographic drivers of trade imbalances are usually a lot less clear than this.
This, however, got me thinking: what about regions within the United States? We have sharply different growth rates across metropolitan areas, mainly driven by in- or out-migration. There are no protectionist barriers to muddy the picture, and capital is surely highly mobile within the country.
Unfortunately, we don't have comprehensive regional balance of payments data. Thanks to researchers at Brookings, however, we do now have a lot of information on the exports and imports of metropolitan areas – exports and imports to and from other parts of the U.S. as well as the rest of the world. I'm not sure how safe it is to use these data to estimate trade balances, but let me take a stab at it.
These data only cover goods; they don't cover either services or income transfers like, say, Social Security receipts, which as we'll see in a second can make a big difference. So I don't think I can run any regressions here. But I still think looking at metropolitan trade balances can be enlightening.
So let's look at the metros with the biggest goods trade deficits and surpluses.
First, the biggest deficits (data for 2010, in billions of dollars):
Washington: -$86 billion
Miami: -$68 billion
San Francisco: -$41 billion
Atlanta: -$35 billion
Baltimore: -$33 billion
OK, Washington runs a huge deficit in goods; basically, what it exports is garbage. No, literally: waste is the only product in which it runs a surplus. But this goods deficit is presumably offset by services, both the federal budget and stuff like payments to K Street lobbyists. My guess is that Baltimore has some of the same stuff.
Miami, meanwhile, is selling warm weather to senior citizens, who live largely off Social Security and Medicare.
The big deficit surprise here to someone with a Trumpist view of trade balances would surely be Atlanta, which has been one of our fastest-growing metropolitan areas: a 24 percent increase in population between 2000 and 2010. And we're talking about a big deficit – about 13 percent of metro GDP. What's that about?
The answer, surely, is that the deficit is a reflection of Atlanta's growth: we're talking about building lots of housing, office parks, and so on, and much of that is financed by capital inflows from the rest of the country.
Next, the biggest surpluses:
Los Angeles: +$63 billion
Memphis: +$29 billion
Greensboro: +$18 billion
Corpus Christi: +$18 billion
New Orleans: +$15 billion
Los Angeles is a very big metropolitan area, but also one whose growth has slowed a lot: it has run out of land, and zoning restrictions have kept it from building up. So its population rose only 3.7 percent from 2000 to 2010. As a result, it has probably become a big exporter of excess savings, hence a city with big trade surpluses, around 9 percent of GDP (probably even bigger if we had data on services).
I haven't done enough homework to know what's going on in the middle three here. But did you know that New Orleans runs huge trade surpluses? And I mean huge: almost 20 percent of GDP in 2010.
Now, I don't think many people would consider New Orleans an economic winner. In fact, its population declined 11 percent from 2000 to 2010, partly because of Katrina, but also because of wider problems. And that very decline means that savings generated in New Orleans go elsewhere in search of returns.
You can see the same thing in smaller cities with declining populations. Buffalo-Niagara Falls saw a 3 percent population decline in the 2000s; in 2010 it ran a trade surplus of 22 percent of GDP.
And what about the Big Apple? Greater New York ran a small goods trade deficit – 1.6 percent of GDP – in 2010, but thanks to the financial industry surely ran a huge surplus in services. (Remember, this is the metro area, not just New York, so there are plenty of goods exports from, say, the pharma complex in New Jersey.) So it's a big surplus economy overall – not because it's growing fast, but because despite immigration its overall population is growing slowly.
So to sum things up: within the United States we have large regional trade imbalances that don't reflect "unfair" trade policies, because interstate trade is totally free. And running trade surpluses isn't a sign of success, nor is running deficits a sign of failure. If anything, much of the time it's the reverse: fast-growing regions run deficits, stagnating regions run surpluses.
The same principles apply at the international level. And I'm sure experts in the Trump administration will explain to the president why his view of such things is all wrong. Oh, wait.--
Thomas Carothers has recently written an article in Foreign Affairs, the prestigious elite journal published by the US-based Council on Foreign Relations. The article asks: is the US hypocritical for criticizing Russian election meddling?
Given the place of publication, the unsurprising conclusion is that it is not. The problem is the US is a champion meddler. Consequently, the argument crumbles every time Carothers reaches for substance.
At the end of the day, the defense reduces to the claim that we (the US) are good and they are evil, so that our meddling is a net good and theirs bad: "the trends of US and Russian behavior are divergent, not convergent – with Russia on the negative side of the divide."
That is a moral superiority defense which is doubly flawed. First, the US can still be a hypocrite. Second, framing great power international relations in terms of moral superiority quickly promotes crusader thinking, which is a grave menace to all.
Meddling Since The Cold War
The first line of defense is that the US meddles less now than in the Cold war. But exactly the same can be said of the Russians. Moreover, since the US is far wealthier than Russia, its democracy manipulations now dwarf those of Russia measured in financial terms.
On top of that, the recent history of US meddling is of an order of magnitude worse than that of Russia. In the Ukraine, which is a highly sensitive space on Russia's border and historically part of the Motherland, the US helped promote a coup in 2014 three months before scheduled elections.
Moreover, this intervention in the Ukraine came on top of 20 years of the US pushing NATO into former Soviet bloc countries. That has put US forces closer and closer to Russia's borders, and violated the end of Cold War understanding that former Soviet bloc countries would remain outside NATO.
Elsewhere, in 2016, following an illegal and unconstitutional coup in Honduras, the US supported the junta's consolidation of power.
Going back to the previous decade, there was the internationally illegal invasion of Iraq and the promotion of a coup in Venezuela. And before that, in 1996 there was the mother of all interventions when the US intervened to influence Russia's election in favor its preferred candidate, Boris Yeltsin. Carothers fesses up to that, but fessing up does not mean acquittal.
In short, not only has there been a lot of US meddling since the end of the Cold War, it exceeds Russian meddling.
The Democracy Promotion Charade
The second line of defense is that the US is different because of its democracy promotion efforts, which are not matched by Russia.
It is absolutely true Russia does not have such programs. But we must be careful to distinguish between rhetoric and reality. Forty years ago, the Soviet Union was dedicated to liberating the workers of the world, but no one except a Soviet apparatchik would have counseled taking this at face value. Similar skepticism is warranted regarding US democracy promotion.
The US is for democracy promotion when it suits its interests, and against it when it does not. Strategically important undemocratic allies are given a free ride, while unfriendly undemocratic countries are subjected to subversive meddling in the name of democracy. Seen in that light, US democracy promotion is the twin of democracy meddling. Both are tactics serving US interests.
The hollowness of the US commitment to democracy promotion is evidenced by how quickly it is dropped when real interests come in to play. That is forever etched in the record by the way the Tiananmen Square protests were conveniently forgotten when trade with China was at stake. Similarly, democracy concerns are always excluded from the room in dealings with Saudi Arabia.
That is exactly how a great power with important interests is expected to behave. But it speaks to being done with the democracy promotion charade, which the US elite pumps up to gain rhetorical advantage in international relations and disingenuously enlist the support of common citizens.
The US Is A Double Hypocrite
Any honest assessment of US democracy would compel the admission that the real threats to it lie within the US. These threats include fake corporate-produced news, the political power of money and corporations, gerrymandering of congressional districts, voter suppression, built-in representational biases from the electoral college and Senate, and obstruction of change from the first-past-the post electoral system which blocks emergence of new political parties.
Compared to those problems, Russia's Facebook interventions are a small time side-show. Moreover, Russia's actions are par for the course of international relations, as long practiced by both the US and itself.
It is relatively easy to further secure the US voting system, and there is much that can readily be done to make US democracy more competitive and informed. But a high quality democracy is not the real goal. Instead, the US elite's obsession with Russia's election meddling is a circus aimed at distracting the public from domestic problems, and at increasing national security paranoia to justify more military spending and more domestic surveillance.
Warning: Don't Be Conned By The Democracy Meddling Narrative
How we got here, how to address authoritarian Russia's encirclement fears, and how to restrain the US imperial impulse are huge questions. A good starting place is to strip away US hypocrisy regarding democracy meddling and democracy promotion.
Doing so does not imply moral equivalence, but it has two huge benefits. First, it can help avoid getting locked into conflict on grounds of false principle. Second, it can help surface the real concerns and conflicts of interest that must be managed.
All of this is especially important for Europe, where the damaging backwash of US actions are now so often felt.
The Trump Administration'sdecisionto add a citizenship question to the 2020 census will not only reduce responses by immigrants and thereby make the count less accurate, experts say, but it also could trigger new costs that offset part of the added census funding that the President and Congress just provided.
To be sure, the Census Bureau's additional funding — which policymakers provided in their recent 2018 government funding bill — is welcome, although it still falls short of ensuring an accurate census so that each state has fair representation in Congress, districts are drawn fairly within states, and federal funding is allocated appropriately for programs from Medicaid to economic development to child care. The funding bill raised the bureau's 2018 budget by $1.3 billion, to $2.8 billion, after several straight years of underfunding. It appears to fund important priorities — such as information technology systems that will support the census's first-ever online response option — at about the level that Commerce Secretary Wilbur Ross requested last year.
The bill also includes some advance funding for 2019, which is important because the bureau next year will need to gear up quickly for the 2020 census, and it can't afford to wait if policymakers are late again in enacting spending bills this fall, as is widely expected. In fact, much of the added $1.3 billion will likely be spent in 2019. Congress also directed the Census Bureau to expand its public communications and outreach work.
The Administration'sannouncement, however, that the census will include a citizenship question could have a chilling effect on responses by immigrants and others, especially in the current political environment, igniting fears of how the government would use the information. In fact, the question could add millions of dollars to the cost of the 2020 census by suppressing initial responses and forcing the bureau to follow up with worried households as best it can. More immediately, the question makes more work for the bureau as it plans how to anticipate such fears and reassure non-citizens and citizens alike that the government will not misuse the data.
The Administration's decision, which Ross announced, violates overwhelming expert advice:
The Census Bureau itself warned against adding the questions. As Ross's own announcement admitted, "The Census Bureau…expressed concern" that the citizenship question would lower non-citizen response rates and "reduce the accuracy of the decennial census and increase costs."
All living former Census Bureau directorsobjected to adding a citizenship question. In a recent letter, six former directors — who served under both Republican and Democratic presidents — called adding the question "highly risky." "There is a great deal of evidence that even small changes in survey question order, wording, and instructions can have significant, and often unexpected, consequences for the rate, quality, and truthfulness of response," they warned. Four of these same former Census directors alsowroteto the U.S. Supreme Court in 2015 that asking about citizenship status in the decennial census "would likely exacerbate privacy concerns and lead to inaccurate responses from non-citizens worried about a government record of their immigration status.…The sum effect would be bad Census data." All nine living Census Bureau directors have at various times publicly opposed past efforts to add such a question.
The American Statistical Associationwroteto Ross in January to "strongly caution" against adding the question.
The Administration has not provided a compelling reason for the question. Its chiefclaim— that adding the question would help enforcement of voting rights — makes little sense, according to Vanita Gupta, who served as President Obama's top enforcer of the Voting Rights Act. Gupta, who now heads the Leadership Conference on Civil and Human Rights,toldRoss in a letter that "the Justice Department has never needed to add this new question to the decennial census to enforce the Voting Rights Act before" and "there is no reason it would need to do so now."
Already, the enacted Census funding level does not appear to provide for the level of communications and outreach activities and field offices that stakeholder organizations had sought. With the new question, the bureau's need to anticipate and overcome respondents' fears will likely become even harder and more costly.
Last December, the U.S. Department of Labor (DOL) issued a proposal to allow employers to collect their workers' tips, ostensibly to distribute them more evenly through tip pools. However, the rule was written in such a way that it would have made it legal for employers to simply pocket tips. This would have been a major windfall to restaurant owners and other employers of tipped workers, out of the pockets of people who work for tips.We estimatedthat if that rule were finalized, workers would lose $5.8 billion a year in tips, with $4.6 billion of that coming from the pockets of women working in tipped jobs.
Because of the overwhelming outcry from workers and allies in response to the proposal, along withexcellent investigative journalismthat uncovered the administration's cover-up of its analysis showing the rule would be terrible for workers, DOL came to the table to hammer out a compromise. As a result, last week's spending bill included a provision that makes it clear that employers may not keep any tips received by their employees, and ramps up the punishment for violations. Those things arehugewins for workers.
The clear next steps for protecting workers in tipped occupations are eliminating thetip credit for minimum wage employers, enforcing one minimum wage for all workers regardless of whether they receive tips, and substantially increasing the federal minimum wage. The rest of this post explains why these next steps are so crucial.
It is not uncommon for servers in restaurants to voluntarily share a portion of their tips with kitchen staff. A provision in the spending bill passed last week allowsemployersto operate tip pools between tipped workers and "back-of-the-house" or other non-tipped workers. Under the new rules, employers can operate these pools if they pay their tipped workers a base wage of at least the federal minimum wage, which is currently $7.25—i.e. employers cannot operate a tip pool between tipped and non-tipped workers if they use a tip credit to cover any wages up to $7.25 an hour. Non-tipped workers in tip pools must still be paid a base wage of the full minimum wage in their city or state. And, as always, the total pay of tipped workers (base wage plus tips) must be at least the full minimum wage in their city or state.
Employer-operated tip pools elevate the importance of a strong minimum wage. Given how dramatically the federal minimum wage has been allowed to erode, many employers must pay their back-of-the-house workers substantially more than the minimum wage to get the workers they need (in other words, the minimum wage is fallen so low that it often isn't "binding," even for low-wage occupations). A look atOccupational Employment Statistics (OES) dataon cooks and dishwashers reveals that, on average across U.S. states, the median wage for cooks in restaurants is 38 percent above the state minimum wage and the median wage for dishwashers is 13 percent above the state minimum wage. An employer who wanted to take advantage of a tip pool could theoretically reduce or freeze the base wages of back-of-the-house workers—as long as their base wages don't drop below the minimum wage—and fill in the difference with servers' tips so that back of the house workers would not see a decline in take-home pay. In this way, employers can legally "capture" some of workers' tips when they operate a tip pool.
For example, say a line cook is paid $10 an hour in a state where the minimum wage is $7.25. Her employer could theoretically lower her base wage to $7.25 and make up the difference with tips collected from servers, thereby lowering labor costs at the expense of tipped workers.
You know what can limit this? A strong minimum wage. Employers cannot reduce base wages for back-of-the-house workers below the minimum wage, so a strong minimum wage would dramatically cut into employers' ability to legally capture tips through tip pools. In our example, if the minimum wage were more than just $10, the employer would not be able to legally capture any tips.
The federal minimum wage, at $7.25 an hour, is more than 25 percent below where it was in real terms in the late 1960s. We shouldraise the minimum wage nationwide to $15 in 2024, and phase out the subminimum wage for tipped workers. A strong minimum wage works hand-in-hand with the new tip provisions of the Fair Labor Standard Act, and that makes this the crucial next step for workers.
Just a quick follow up in case you’ve missed my email. If you’re short on time right now — no worries. I won’t bug you about it again.
Thank you,
Anna.
On Wed, Mar 21, 2018 at 3:12 PM, Anna Kucirkova <anna@connex.digital> wrote:
Hello there
Your page http://economics.enlightenradio.org/2016/08/the-state-of-higher-ed-funding-feedly.html has some good references about college tuition so I wanted to get in touch with you. I've recently written an article about the rising cost of college and was wondering if you thought my article could help out on your page.
It would be great to know your opinion on the article. And if you find it useful please consider linking to it from that page of yours, or perhaps in your future writing. Also if you prefer you may republish the article.
