It’s the Wages, Stupid

Working families are being squeezed between rising living costs and stagnant pay. Prices are spiking as a result of the Iran war, the Trump administration tariffs, and high interest rates. The combined effect is raising living costs for U.S. households by thousands of dollars a year.

This extreme cost squeeze has led policymakers, experts, and organizers to champion an affordability agenda aimed at offering families a life line, and made affordability the central issue in the midterm elections.

But while the affordability conversation has advanced a range of policy solutions for reducing the crushing costs facing families, including gas, healthcare, childcare, utilities, and consumer prices, the other side of the affordability equation has been conspicuously absent from the debate: the wages that U.S. workers earn.

U.S. workers’ wages aren’t keeping up with spiraling prices, and paychecks are buying less and less every month. An ever greater share of corporate revenue now goes to executives and billionaires, while workers’ share has shrunk to a record low of barely 50%.

The Trump administration’s policies have made the situation more dire. The administration has been working aggressively to dismantle worker protections, making it easier for employers to shortchange workers and driving down incomes for working families. NELP is fighting back against some of the administration’s most egregious anti-worker policies including:

• Letting employers get away with misclassifying employees as “independent contractors”

The Trump administration rolled back the Department of Labor’s independent contractor rule—a key protection against workers being illegally misclassified as independent contractors. As NELP explained in our comment opposing the roll-back, not only will the Trump rule allow low-road businesses to slash worker pay, it undercuts employers that play by the rules and treat their workers well by putting them at a competitive disadvantage. When they are misclassified as independent contractors, workers lose the protection of the minimum wage, paid sick and paid leave laws, unemployment insurance, workers comp, and more. A recent report by NELP and the 75 Million Project, How Misclassification Shortchanges Women Workers, found that misclassification costs women workers $10,000 a year and that immigrant women workers, in particular, are concentrated in industries where the threat of misclassification is most serious.

• Making it easier for employers to avoid responsibility for ensuring basic worker protections

The Trump administration is facilitating wage theft and exploitation of workers by watering down the USDOL “joint employer” rule, making it harder for subcontracted workers to recover stolen wages or hold companies accountable for violations of their rights. As NELP explained in our comment opposing this anti-worker change, joint employment responsibility ensures that companies can’t insulate themselves from complying with basic employment protections by outsourcing jobs to low-road contractors or staffing agencies that often cut corners and cheat their workers, and then are difficult to hold accountable.

• Eliminating minimum wage and overtime protections for millions of home care workers

Trump’s DOL is currently trying to strip homecare workers of minimum wage and overtime rights—the most foundational of job protections. As NELP explained in its comment opposing the roll-back of these hard-won protections, homecare workers are an already underpaid group of vital caregivers who are disproportionately women of color. They provide the physically demanding essential services that enable seniors and persons with disabilities to continue to live in their homes with dignity. It’s also an industry where the need for workers is expected to nearly double over the next decade and that is already facing a serious worker shortage—which slashing pay will only deepen. NELP is launching a new initiative with our partners to urge state legislatures and governors to protect the pay of homecare workers by locking-in minimum wage and overtime protections under state law. Oregon already acted swiftly to do so this year. More states should follow its lead.

It’s time to raise wages

The federal minimum wage has been frozen at a paltry $7.25 for seventeen years. It’s time to raise the federal minimum wage and ensure that it increases each year after that to keep up with the rapidly rising cost of living.

When a new Congress takes office in January, NELP and partners will be urging both newcomers and incumbent members to push back against the administration’s unrelenting attacks on workers and their paychecks. Congress needs to throw the weight of the federal government behind raising wages. This means a higher federal minimum wage AND raising pay for the majority of workers who earn more than the minimum wage but are still struggling in today’s economy. And we need to fix our broken labor law system to enable more workers to join unions—the best route to raising wages. 

Workers need BOTH lower prices and higher wages that more than keep pace with the cost of living. NELP and our allies are committed to fighting for a policy agenda that addresses both of these crucial sides of the affordability crisis.