#RaiseTheWage

Heidi Shierholz breaks down the new CBO report that, contrary to some headlines, shows a $15 minimum wage will change millions of lives for the better; Bryce Covert on how states are going around Trump to raise overtime pay— PLUS: Rebecca & Patrick Cokley on “how disability can save the progressive movement.”

This week on Off-Kilter… earlier this week, the Congressional Budget Office released a long-awaited report estimating the effects of gradually raising the federal minimum wage to $15 an hour by 2024, as the Raise the Wage Act — championed by Virginia Congressman Bobby Scott — would do. CBO’s bottom line: *27 million* workers would get a raise if the bill becomes law. The bill is expected to come up for a vote in the House next week, just weeks after the nation marked a shameful milestone: 10 years since the nation’s lowest paid workers got a raise, the longest stretch we’ve ever gone without Congress taking action to raise it. So it seemed like the right time to bring back our good friend Heidi Shierholz, senior economist at the Economic Policy Institute, former chief economist for the Dept. of Labor under Secretary Tom Perez (and amateur beekeeper as it happens) to unpack what’s in the report, set the record straight when it comes to job loss effects, and where things go from here as the minimum wage debate finally heats up in Congress.

Later in the show… a policy experts consider a critical counterpart to the minimum wage — but which gets a lot less attention and visibility, as perhaps the redheaded stepchild of wage policy — is overtime pay. After a much-needed update to the long-outdated overtime thresholds at the federal level was rolled back under Donald Trump, states have begun stepping up to take matters into their own hands, much like we’ve seen on the minimum wage front while Congress has failed to act to raise the federal minimum wage. Washington State has now joined Pennsylvania, California, and New York in taking action to update the state’s overtime threshold in what some advocates are hailing as “a model for how states can protect workers from the Trump overtime rollback.” Bryce Covert recently wrote about Washington State’s exciting new proposal for TalkPoverty.org, so we have her back on the show for an update on what’s been playing out in the states.

As a bonus to round out this week’s show, as we get to Philly for Netroots Nation… Rebecca catches up with Rebecca Cokley, director of CAP’s Disability Justice Initiative, and Patrick Cokley, co-founder of the Lead On Network, to unpack what they mean when they say “disability can save the progressive movement” and preview their panel at #NN19.

**SHOW ANNOUNCEMENT: we’re excited to announce that as of this week, Off-Kilter is officially banning the word “crazy” from the show as part of our commitment to disability justice. You’ll hear it get bleeped out starting this week.

This week’s guests:

• Heidi Shierholz, senior economist at the Economic Policy Institute and former chief economist at the Department of Labor
• Bryce Covert, independent journalist, contributing writer to the New York Times and The Nation, and author of “States Are Going Around Trump to Raise Overtime Pay”
• Rebecca Cokley, director, Disability Justice Initiative, Center for American Progress
• Patrick Cokley, co-founder, Lead On Network

This week’s transcription:

♪ I work and get paid like minimum wage

sights to hit the class by the end of the day

hot from downtown into the hood where I stay

the only place I can afford ’cause my block ain’t saved

I spend most of my time working, trying to bring in…. ♪

REBECCA VALLAS (HOST): Welcome to Off-Kilter, the show about poverty, inequality, and everything they intersect with, powered by the Center for American Progress Action Fund. I’m Rebecca Vallas.

Hope everyone had a great Fourth and didn’t miss us too much last week. This week on Off-Kilter: earlier this week, the Congressional Budget Office, the nonpartisan CBO, released its report estimating the effects of raising the federal minimum wage to $15 an hour, with a Raise the Wage Act coming up for a vote in the House next week, I bring back Heidi Shierholz of the Economic Policy Institute, or EPI, to dig into the CBO report, and importantly, to set the record straight on what a $15 wage floor would mean for potential job loss. Later in the show, Bryce Covert on how states are stepping into the breach when it comes to overtime pay. And finally, to round out this week’s show as we get to Philly for Netroots Nation this year, I catch up with Rebecca Cokley, director of CAP’s Disability Justice Initiative, of course and Patrick Cokley too for a double dose of the Cokley-verse, Netroots Nation Edition. They talk about what they mean when they say disability can save the progressive movement, something they’re here at Netroots talking about this year.

And on that note, I’ll take this moment to proudly announce that as of this week, Off-Kilter is officially banning the word “crazy” as part of our commitment to disability justice. You’ll hear it get bleeped out starting this week, so wanted to give you a heads up about why.

[Hip Hop music break]

You’re listening to Off-Kilter. I’m Rebecca Vallas. Earlier this week, the Congressional Budget Office released a long-awaited report estimating the effects of gradually raising the federal minimum wage to $15 an hour by 2024. That’s what the Raise the Wage Act, championed by Virginia Congressman Bobby Scott, would do. CBO’s bottom line? Drumroll, please. 27 million workers would get a raise if the bill becomes law. The bill is expected to come up for a vote in the House next week, just weeks after the nation marked a shameful milestone: 10 years since the nation’s lowest-paid workers got a raise. That’s the longest stretch we’ve ever gone as a country without Congress taking action to raise it since we’ve had one. So, it seemed like the right time to bring back our good friend Heidi Shierholz, senior economist and policy director at the Economic Policy Institute or EPI. She’s also the former chief economist for the Department of Labor under Secretary Tom Perez and President Obama and an amateur beekeeper, as it happens, to unpack what’s in the report and where things go from here as the minimum wage debate finally heats up in Congress. Heidi, thanks so much for taking the time to come back on the show.

HEIDI SHIERHOLZ: Oh, thanks for having me. It’s a delight to be here.

VALLAS: Well, and I sort of outed you as an amateur beekeeper.

SHIERHOLZ: [chuckles] Yes. Well, I have two backyard hives. If anybody wants to come see them, I’m happy to do showings. They’re really pretty fun. One thing that people don’t know about bees is when they’re very young, when they first come out of their little cells, they’re super fuzzy. Like the ones you see out on your picnic tables are the tough older adults who are sort of scrappy. But as babies, they’re cute and fuzzy. And they’re fun to look at.

VALLAS: I think it’s so cool that you do that. I really do want to talk about the CBO report, but I actually do wonder: how long have you been keeping bees?

SHIERHOLZ: Since I moved to Silver Spring where we could legally keep bees. So I don’t know. Was that like six or seven years?

VALLAS: It’s so cool. Do you name them?

SHIERHOLZ: No. [laughs] We have an east hive and a west hive. They’re like three feet apart.

VALLAS: I love it. East and West. Oh, that’s so cool.

Well, so, listen. We’re actually here to talk about the minimum wage, much as I want to have you back for a segment on beekeeping, which now I feel like we should probably do. But as I mentioned up top, it has been a decade, the longest stretch in U.S. history, since Congress has raised the minimum wage, and workers have been languishing in the decades since. So, before we get into this CBO report and some of the kind of mind-numbing numbers that are really important but also get kind of wonky, I wanted to start by having you paint a little bit of a picture of what has happened in those 10 years when we haven’t seen the federal minimum wage increase and what $7.25 today, the rate that the minimum wage remains at, at the federal level, how that level compares to 10 years ago for workers.

SHIERHOLZ: Yeah, I’m glad you bring this up, and it sort of highlights the important move that’s happening as states are raising their minimum wages. It’s in the new federal bill that when we increase the minimum wage, you actually need to index it going forward so there’s automatic updating every year. Because if not, what has happened now is the thing that happens. If long stretches go by without having the minimum wage updated, the purchasing power of that wage drops inflation just naturally rises. And so, just to put some numbers on it. Since the minimum wage was increased 10 years ago, the minimum wage has lost 17 percent of its value. So, where if you would have gotten the dollar when it was less raised, now you’re getting 83 cents. It’s just, it’s just outrageous that that kind of erosion is allowed to happen.

And then I just want to also say the minimum wage that was increased in the three steps in 2007, 2008, and 2009, that actually did not restore the minimum wage to its historic peak. If you look at where the minimum wage is now compared to its peak in the late ’60s it is, now 31 percent less. So, minimum wage workers today make far, far less than they did 50 years ago. It’s just, it’s an outrage. Our country has gotten a ton richer since that time. We can afford to give low-wage workers a huge raise, and that’s what we should do.

VALLAS: And I want to give a nod to my former colleague, Rachel West, who’s now actually over in the House working for Congressman Bobby Scott on these issues but who used to be a longtime friend of the show and who actually did some analysis that listeners may remember that feels incredibly timely as we mark this horrible 10-year milestone. Which is that minimum-wage workers today have effectively lost almost an entire year’s pay over that 10 years because of Congress’s inaction to raise that federal wage floor. So, just to put that purchasing power concept in in human terms.

SHIERHOLZ: Yeah. When you think about what that means to working families, to people trying to raise kids on those wages, it’s just, like losing a whole year’s worth of wages is just something that families should not have to be asked to absorb.

VALLAS: So, I mentioned up top, and listeners may be familiar because this is not a brand new idea to raise the minimum wage to $15 an hour. It’s definitely something that we’ve been watching states do. It’s been an increasing federal push, and the Raise the Wage Act is definitely legislation that’s been on everyone’s lips since it was introduced in this new democratically-controlled House. But give us a little bit of a refresher. It’s not just 15 an hour. There’s a lot in there, and it’s good to have sort of a baseline, I would think, of what this bill does before we get into CBO’s analysis of it and what its consequences would be for workers.

SHIERHOLZ: Yep. It’s pretty straightforward. So, the top line thing is that it would increase the minimum wage incrementally to $15 in 2024, as you said. And then as I also mentioned, it would then index that every year going forward so its value would not erode over time. And then does three, I guess, extra things. It phases out the sub-minimum wage for tipped workers. One thing a lot of people don’t know is that employers only have to pay tipped workers in, at least as far as the federal legislation goes — some states have don’t allow this — but federally, the employers only have to pay tipped workers $2.13 an hour as long as their tips make up the difference that brings them up to the minimum wage of $7.25. So, tipped workers are much more likely to live in poverty. There’s all sorts of bad outcomes that come from this kind of policy, so the Raise the Wage Act would phase out the sub-minimum wage for tipped workers. And similarly, it would phase out the sub-minimum wage for youth workers that also actually exists, and the sub-minimum wage for workers with disabilities. So, it would really kind of clean up the policy and then index it going forward.

VALLAS: So, now into the good stuff, the stuff people are waiting to hear about this Congressional Budget Office, or CBO, report that was released earlier this week. We all knew it was coming. I mentioned it’s been sort of long anticipated because it now gives us numbers for not just who would see their wages go up but lots of other types of benefits that we would see accrue to workers and also to the broader economy. So, give us a little bit of an overview. I mentioned 27 million workers stand to see their wages go up. But what did CBO find in terms of that and some of the other key findings?

SHIERHOLZ: Yeah, they really did, you know, they did what CBO does, which is sort of weighed the benefits and costs. And the bottom line is that they find that the benefits outweigh the costs. And the benefits they talk about are very broad, very far reaching. As you said, up to 27 million workers would see a raise. That the low-income families, they broke it down by poverty bands. So, families who earn less than three times the poverty rate, so those are the sort of low to low to middle-income families. Their income as a group would rise by $22 billion a year. So, this would decrease inequality. It would also decrease poverty. They find that poverty would be reduced by 1.3 million people. And here’s a kicker on that too. Almost half of that poverty reduction would be because there’d be fewer kids in poverty. And that’s because, largely because their parents are getting raises. So, this just has really important ripple effects. The positive, the benefits are just broad and far-reaching. And you know, a policy that it’s $22 billion to low-income families reduces inequality, it reduces poverty. That’s a really good thing for our country.

VALLAS: So, you’ve talked through a lot of the different types of benefits that the CBO report tells us would accrue if this bill becomes a law, but you also mentioned that it outlines costs. And in this case, we’re not talking about say, the cost of a piece of legislation being like how much is it going to cost to expand health insurance or nutrition assistance or other things. In this case, they’re looking at other potential consequences. And some conservatives, as well as some in the mainstream media, have made a good deal out of what the report talks about when it gets into costs. And that’s because the costs it talks about have to do with potential job losses as a result of raising the minimum wage to $15 an hour. Now, I want to note this is not a new claim, particularly by opponents of raising the minimum wage, and particularly by conservative opponents. And so, I’d really love to spend some time unpacking CBO’s estimates on this point with you and what they really tell us, particularly because you and a lot of other economists have been noting since the report came out that we should really look at those job loss figures in this CBO report with caution. Why is that?

SHIERHOLZ: Yeah, that’s a very good way to put it. We should look at the job loss numbers with caution. So, what they found, what their preferred estimate of the employment impact of increasing the minimum wage to $15 is employment decline of 1.3 million jobs. And so, it’s important to look at OK, how did they come up with that number? What they did is they looked at the vast, vast economics academic literature on the impact of increasing the minimum wage on jobs. It’s one of the most studied things in labor economics. So, they looked. They surveyed that whole literature to find the parameters that they would then use to find their employment estimate of this particular policy. And that’s where the question arises. How did they pick those parameters that then lead to the big job loss numbers? And I don’t think that they did it the right way.

And here’s the sort of, here’s the rub on that. If academics are looking at the impact on employment of increasing the minimum wage, you can do that in a low-quality way, or you can do that in a high-quality way. And here’s the thing: the low-quality studies are the ones that are most likely to find that minimum wage increases cause large job losses. And the very high-quality, rigorous, more careful studies are the ones that find that minimum wage increases costs little to no job loss.

And so, what I think the CBO should’ve done is weight those different studies by just how good they are. You don’t want to have a crappy study have the same weight when you’re picking a parameter as a really well done study. It’s just sort of common sense, but that is what they did. They just kind of mashed them all together. And so, they came up with this all right, minimum wage increases cause substantial job loss. Whereas if they had — what I think would’ve been much more appropriate — given much more weight to those higher-quality studies, what they would’ve found is that minimum wage increases have caused little to no job loss. So, I don’t think that they did a very good job of sort of synthesizing the literature to come up with their approach for estimating employment losses. But it’s a tricky game. I mean I think that I always want to loop back to, but you know, even if you accept their job loss numbers, they still find — even in accounting for this large employment decline — they still find the benefits of this policy are so vast that they just outweigh those costs.

VALLAS: So, Heidi, you’re an economist, and you spend a lot of your time reading economic literature, and including, and especially minimum wage studies. As you said, this is a vast and growing literature that has a real range of types of quality of studies. That’s true of a lot of different areas of academic literature. Tell me what you mean, just to get really concrete about this because people might be listening and going OK, but what’s a high-quality study? What’s a low-quality study? What are the different things that get put into a black box that then produce these numbers that can be so different? Would you maybe give a couple of examples of the types of studies that you think we should be giving great weight to versus what maybe should be getting a little bit less weight than it is from CBO?

SHIERHOLZ: Yeah, that’s a good question. I think the bottom line in what makes a good study is if the minimum wage increase that you’re looking at the impact of, what you need is a very, very, very good comparison group. You want to have a very, very good place that looks exactly like the one that saw minimum wage increase that didn’t see an minimum wage increase so you can compare the difference. And so, some of the best studies or some of the really innovative studies have done things like, we have many cities that are one labor market that actually are cut down the middle by say, a state line. And so, you have these amazing natural experiments where OK, you have the same labor market. It’s cut down the middle by state line, and one state raises its minimum wage and the other state doesn’t. So, it’s the same labor market. And you can look at OK, what’s the impact on wages and employment controlling for essentially everything else because you have people that could essentially work across the state line in that state or this state. So, that’s the kind of study that just has really, really tight, good comparison groups. That’s the gold standard.

I can tell you an example of a bad study that is along those same lines that has gotten a lot of attention recently. There was a study that looked at increasing the minimum wage in Seattle, which has been a city that increased its minimum wage to a much higher level. And that study, they had really nice administrative data where they could look at the impact of the minimum wage in Seattle. But here’s the problem: they only had data for the state of Washington, and there is no other place in the state of Washington that’s like Seattle. They had no comparison group. They can’t actually look at what happens in Seattle as it raises its minimum wage and find anywhere else in Washington that’s remotely like Seattle and that didn’t raise its minimum wage in order to compare the outcomes. And so, that study just, it unsurprisingly came up with very bizarre, very bizarre results because they just didn’t have a good comparison group.

So, that’s a long-winded way to say that the best studies, in a variety of ways, come up with just really good apples to apples comparisons. And when that happens, those studies typically find that increasing the minimum wage, the increases in the minimum wage that we have seen, have not caused job loss. They’ve not caused significant job loss. And it is the studies that have found significant job loss have tended to be the ones that just if you look at it, you’re like…yeah. No. That comparison group, that like suburban area is just not the same as Seattle or what other…. And there’s many other examples of that where you look and say, ah, there just aren’t good controls that really isolate the effect of the minimum wage.

VALLAS: So, a way that you have described this that really helped me understand some of what you’re explaining here is that, in a lot of ways, as the academic literature has gotten larger and as more high-quality studies have been produced, because there have been more of those opportunities to exploit those kinds of circumstances and thus have a very robust methodology, you’ve said a new consensus has emerged among economists as to what the employment effects are of raising the minimum wage. And this is something that CBO itself actually really admits in the report. Even the Cato Institute, as you’ve pointed out, has acknowledged this tremendous movement within the field. There’s actually a letter signed by 100 economists — more than 100 economists at this point — some of the leading economists in this country all kind of agreeing with that point saying. “The weight of evidence,” I’m quoting here from this letter, “shows that previous modest increases in the minimum wage had little to no negative effects on the employment of low-wage workers.” So, is it just that CBO sort of hasn’t caught up, and they’re still given us yesterday’s news?

SHIERHOLZ: I think that’s right. I think it’s this idea that minimum wage increases cause job loss feels like some kind of law to many economists. Because you learn in these very simple, from the beginning, from like Econ 101 models, you see the crossing of supply and demand. And you’re like, OK, the market wage is set at the middle. So, if you set the wage above that, you’re going to cause job loss. Like those very early, formative economic experiences that many economists had made them feel like that’s just a natural law, and it’s totally not. The empirical evidence is really, really solid now that you can raise the minimum wage without having job loss. It has taken a long time for the economics profession to sort of budge. And just to put a number on how long it’s been: the first very high-quality studies that came out that started to show this were in the early ’90s. So, it’s been a long time as people have sort of started to soften about how can this really be happening.

One of the exciting things that’s going on in economics right now is people are really digging into those models, that simple sort of dated model of perfect competition that just assumes that in the free market, wages are set at that perfect cross of supply and demand. What that model assumes — this is sort of a, I mean it’s just a almost laughable assumption — that model assumes that employers, in the absence of a meaningful minimum wage, have no power to set wages below the full value of a worker’s worth to the firm. That they have no ability, no power to set wages below and keep some of the value of workers’ worth for themselves in terms of profit.

VALLAS: So basically, there are like economist-y assumptions being baked in that can’t even take place in the real world?

SHIERHOLZ: Yeah, it has no bearing on the low-wage labor market. I mean it’s just no one would hear that assumption and think, oh yeah, that’s a good description of how the world works. No one would. But yet, that is a key assumption underlying the model that says if you raise the minimum wage, it will cause job loss. It’s just, it’s like that’s kind of a remarkable thing that I think everyone who learned this in Econ 101 never, never understood. And it just becomes ingrained, and you start to think of it as some kind of law. And the empirical evidence, just when people actually look at the data and do a good job with good comparison groups, they find that no, actually, when you increase the minimum wage, it raises wages, and it doesn’t cause job loss. And that’s because employers actually have the power to set wages below that efficient wage, that cross of those two points. And so, if you raise the wage floor, you actually move the economy to a more efficient level. You actually can, you can even see job growth in that case. But absolutely what we find is that it doesn’t cause job loss.

VALLAS: So, your overall take as you put it before I thought was really kind of a helpful way to sum this all up: workers would be unambiguously better off, and the benefits outweigh the costs. You actually, just to stick with this one last little bit, and I promise I will move on, but I feel like this is one of the most misunderstood points in this report. It’s also one of the most misunderstood pieces of the minimum wage conversation, and so I feel like for anyone who’s still listening — I think they’re with us, Heidi — they want to know more. So, I’m going to take you to one last place. In hearing you explain one other facet of kind of how the research doesn’t quite match up to, or sends messages that don’t match up to, the real world, and in this case I’m talking about the low-quality studies that make these kinds of assumptions that are like Bizarro World kind of stuff like you’ve been describing. There’s also the fact that even if there is job loss — and that’s not even a term that you’ve even quite defined yet, so that’s part of why I wanted to dig into this just a little bit more — you could still have workers overall being better off because of higher wages. How can that be? Explain that piece.

SHIERHOLZ: Yeah. That’s an interesting thing that I agree people do not get it, and it is understandably because you just hear oh, 1.3 million jobs will be lost. And you think oh, that’s 1.3 million people who will be say, jobless for a whole year or something like that. That is not what CBO found. What they found is that in any given week, there will be — I mean this is what they estimated, right? I don’t agree with it, but this is what they estimated — in any given week, there will be 1.3 million fewer people with a job. But the key is that is not necessarily the same people every year. So, it’s not like you have 1.3 million people who are just totally messed up by this policy, and everyone else is made way better off. It’s much more you could have a situation where absolutely no one is made worse off, even if you see this decline of 1.3 million jobs in any given week. And here’s how that could happen. What if everybody just worked one less week in a year? Then everyone works instead of 52 weeks say, they work 51 weeks. I mean obviously, not everyone works full year, but everyone works one less week a year, they all get much, much higher earnings, and everyone is better off. That world could still be a world where you have 1.3 million fewer jobs.

And here’s the thing. In the low-wage labor market, there is a lot of churn. Many low-wage workers get a job; they stay in that same job for a very long period of time. But a high share of low-wage workers turn over in their job on a regular basis. So, for example, about 20 percent of the lowest-wage workers either enter or leave a job every quarter. So, there’s just a lot of movement from a number of reasons. And so, what an employment decline will likely mean in the low-wage labor market is workers who are looking for a job will look for a little bit longer. They may have to look for a couple additional weeks in order to find that job because there’s, in this world, there’s fewer jobs. But when they do find a job, they make a ton more. So, their earnings on net are actually much, much higher. And so, this is the sort of summary point that I’m trying to make is an employment decline that is coupled with a big wage increase doesn’t mean that anyone is actually made worse off by that employment decline because there’s so many people who do experience the employment decline who also experience the big wage increase. Because they just work a little less over the year, but they make so much more when they are working that their annual earnings actually still go up or are unaffected.

VALLAS: And all of that of course, caveated by, as you said when you led in that’s if we’re taking these potentially methodologically questionable numbers at face value even to start. Because some of those highest-quality studies actually find that raising the minimum wage not only could result in negligible job loss, but could actually result in increased employment. And just want to restate that one last time.

So, Heidi, in the last few minutes that I have with you, kind of taking our heads out of the wonkery for a moment and getting back to this piece of legislation, which is why this CBO report matters here. You know, policymakers, the media, everyone’s looking at this report and going, oh, this is the information we need before we take a vote on this bill next week in the House. Representative Bobby Scott from Virginia, who is the lead House champion of this bill and has been for quite some time, has said he’s optimistic that the bill will pass next week. What do you think? What does your crystal ball tell you? And do you think we’re going to see any Republicans support the bill?

SHIERHOLZ: These are all very good questions, and I will not claim to know the answers. I do think that the CBO score, I don’t think policymakers have any reason to be concerned about it because it did show that the benefits of this policy hugely outweigh the costs. It will decrease inequality, decrease poverty, increase the annual earnings of low-income families. Like all of the sort of net effect of the policy, the CBO score shows that it’s really good. And this is just what we know is that the minimum wage is extremely popular with people’s constituents, with policymakers’ constituents. The people know that raising the minimum wage is good, not just for those workers, but it’s good for the economy because you’re getting money in the hands of people who are going to be very likely to spend it. So, it stimulates the economy. People understand this, and policymakers know that their constituents understand this. So, I do think that this is very likely to pass the House.

I think the question of whether it will have any Republican support, the Republican Party is pretty aligned in being pretty anti-worker at this point. And so, I don’t expect to see Republican support for this, but you know, there is Republican support among their constituents. Like if you do polling, increasing the minimum wage is amazingly supported across the political spectrum. It’s not just Democratic voters who believe in increasing the minimum wage. It’s also Republican voters. So, if they were listening to what the people in their districts want, they certainly would be voting for it.

VALLAS: I’ve been speaking with Heidi Shierholz. She’s a senior economist at the Economic Policy Institute, also the policy director there. She’s a former chief economist for the Department of Labor under Secretary Tom Perez and President Obama. Also an amateur beekeeper, as I’ve outed her on the show, and a deep, deep minimum wage expert. Heidi, thank you so much for taking the time to dig through all of this with us and for all the work you’ve been doing to help people understand what’s in this CBO report.

SHIERHOLZ: Thanks so much. It’s been my pleasure.

VALLAS: Don’t go away more. Off-Kilter after the break. I’m Rebecca Vallas.

[Hip Hop music break]

You’re listening to Off-Kilter. I’m Rebecca Vallas.

Moving on from the minimum wage, policy experts consider a critical counterpart, but which gets a lot less attention and visibility. Perhaps it’s the red-headed stepchild of wage policy, is overtime pay. After a much needed update to the long outdated overtime thresholds at the federal level was rolled back under President Trump — more on that in a sec — states have begun stepping up to take matters into their own hands. Much like we’ve seen on the minimum wage front while Congress has failed to act to raise the federal minimum wage. Washington State has now joined Pennsylvania, California, and New York in taking action to update the states’ overtime threshold in what advocates are hailing as a model for how states can protect workers from the Trump overtime rollback. Bryce Covert, an independent journalist who writes about the economy, recently wrote about Washington State’s exciting new proposal and who it would help for TalkPoverty.org. So, I’m thrilled to have her back on the show for an update on what’s been playing out in the States. Bryce, thanks so much for taking the time.

BRYCE COVERT: Thanks for having me.

VALLAS: So, before we get into what’s going on in the states or even what they’re taking action to respond to at the federal level, remind us a little bit how does overtime work? Why is this a policy area that is worth paying attention to when it comes to low-wage work?

COVERT: Sure. Well so, unfortunately I think a lot of people are not familiar with overtime because so many no longer qualify for it. There’s basically two main federal laws that govern how much you should be paid. There’s the minimum wage, which is sort of the floor; you can’t be paid less than that per hour. Then overtime is meant to try to constrain the hours that you work. So, if you qualify for overtime, then when you put in more than 40 hours a week, you either have to be paid extra for those hours — time and a half — or you just have to be sent home, and they have to find someone else to fill in for that work. So, you either get some time back to your life, or you get a little bit of extra pay.

But like I said, unfortunately, the threshold below which people qualify automatically for overtime pay has been allowed to languish for a really long time. And at this point, it’s only about $24,000 a year, which is a really low ceiling. It used to cover almost two thirds of the workforce. And that meant that a lot of people, both hourly workers and salaried workers, were getting that extra pay or were getting that extra time to go home. Now, it applies to this shrinking pool of people. So, if you’re not an hourly worker, and you have a salaried job, you’re very unlikely to even know that there might be a reason to expect some overtime pay when you’re working 45, 50, 60, sometimes 70 hours a week.

VALLAS: And the numbers might be staggering on their own, and people are probably putting the dots together here and understanding what’s not kept pace and why people are now facing, effectively, pay cuts, and in a lot of ways, as you said, being forced to work lots of hours so that the policy erosion is perhaps clear. But part of what your piece does such a good job of doing is it really puts a human face on the consequences of that policy erosion. You profile someone named Chip Ahlgren and how he wasn’t really in a position to celebrate the fact that he’d gotten a promotion.

COVERT: Yeah, most people would think that moving from an hourly position to a salaried position is a huge marker of success, and it really should be. I mean usually it comes with some stability and is a recognition of your work. For Chip however, he works at a Jiffy Lube in Washington State. And as soon as he was moved into that salaried position, he no longer qualified for overtime. And what that effectively meant was that his bosses could ask him to work as many hours as they wanted, and he would see no extra pay for those extra hours. And he also was in no position really to refuse. Whereas before, when he was hourly, he was getting that extra pay when he was being asked to put in so many [bleep] hours. So, you know, he’s busting his butt and literally told me about busting a shoulder. He’s got physical injuries from working so hard. He’s also struggling to put money away in his savings. You know, he said ultimately, with bonuses, he’s probably making more than he did as an hourly worker. But it’s not that much more, and it’s also not guaranteed. You know, if you look at the breakdown per hour, he’s actually making less than he used to when he was not salaried. So, he’s really frustrated, and I think he should be frustrated that there’s no regulation right now, at this moment at the federal level that would ensure that he can get some extra pay when he’s working so hard.

VALLAS: Now and your piece actually quotes our previous guest on this week’s episode, Heidi Shierholz, the senior economist at the Economic Policy Institute and former chief economist at the Department of Labor under President Obama. And she makes a really important point that you quote her on in your piece, which is that this is particularly important, not just as an anti-poverty issue, but really as a middle-class economic issue because of the workers who are being left behind today, like you’re describing with Chip, and the income levels that they’re at. Would you talk a little bit about kind of what she means there, and why this is such a middle-class issue in addition to just a low-wage work issue?

COVERT: Yeah, I mean there’s a lot of focus on increasing the minimum wage, and I think that’s really important. A lot of states have gone much further than the federal floor because the federal floor hasn’t been raised in so long. And that’s a really important policy change to lift up the people who are earning the least, who are likely to be living in poverty and really just scraping by. Overtime starts to get at people who are in sort of the bucket just above them. So, if you think of maybe the entry-level person at a fast food restaurant is the one who gets helped by a higher minimum wage, it’s their supervisor in that fast food restaurant who will be helped by a higher overtime threshold because they’re salaried. And if we increase the threshold, that means they can still get extra pay when they put in so much work. It’s this sort of lower middle class that is also really struggling to get by who will see, again, either extra pay or at least some extra time to go home and spend with loved ones or on hobbies if we change the overtime threshold.

VALLAS: Now you intimated that what’s gone on here is that the overtime threshold has not been increased, and it’s been about a decade. And efforts to increase the overtime threshold at the federal level were under way as recently as 2016. And that was during the Obama years with a proposal we saw out of the Obama administration that would’ve taken action. But we saw this actually get sort of ripped out of the hands of workers because of the change in power in the White House and Trump coming in and deciding that wasn’t the road he wanted to take. We talked a little bit about that on this show when it happened, but remind our listeners what happened at the federal level that kept these workers from getting that overtime update that they so sorely needed.

COVERT: Yeah, the Obama administration in 2016 came out with an update to the federal overtime threshold, and it was going to raise it to $47,000 and some change a year so that anyone who made that hourly or salaried, would automatically be owed overtime pay. That was a huge increase. It was a doubling of the threshold and bringing it a little bit closer to where it should have been if it had kept up with inflation and changes over time.

The other important thing that the Obama administration was going to do was automatically update it every three years to keep up with wage growth so that we wouldn’t get into a situation like we have now, where it’s just languished, and fewer and fewer people actually get covered by it. Unfortunately, that was ultimately struck down in court. The Trump administration, when it came in, decided not to defend the update, and it was struck down. And it came out with its own proposed increase, and their proposal is to increase the threshold to about $35,000 a year, which is a lot less. And then they also don’t have any automatic updates, which I think is perhaps even the most concerning part of it. Because even if we get up to a lower threshold that they’re proposing, there’s no guarantee that it will keep up with wage growth and inflation and all of that, and we’ll just, we’ll get back in this situation all over again.

VALLAS: And analysis from the organization I mentioned before — the Economic Policy Institute, EPI, we are loving you on Off-Kilter today — came out with some estimates telling us and really putting some numbers to what you just said about how much weaker the sauce is from Trump’s rule than from what Obama was trying to do. And they found that the rule, as written under the Trump administration, would cover 8.2 million fewer people than the Obama rule would have when it had fully taken effect.

But now to the good news part of all of this, which is where I really wanted to go, and part of why I was so excited to see your piece, Bryce, in TalkPoverty is that here we’ve got this weak sauce come in from Trump and him actually trying to do all these victory laps and pushing out misinformation, making it seem like what he’s doing is just as good as what was struck down in court and what he decided not to do of Obama’s proposal. But in the meantime, states have started to notice this and have started to, like we’ve been seeing on the minimum wage front for a number of years now and paid leave and paid sick days and other policies too, states have started to step into the breach and to take action themselves and have really created something of a playbook for other states to follow and take up to correct what we’ve seen under the Trump administration. And your piece focuses on Washington State, but actually, Pennsylvania was the first state to do this. What did we see come out of Governor Wolf’s administration in Pennsylvania?

COVERT: Yeah. Pennsylvania was the first to act, and it decided to update its own overtime threshold to just under $48,000 a year by 2022. And then it also automatically updates every three years after that. So, it looks a lot like what we might have seen had the Obama threshold taken effect. California, New York also have taken action on different levels. And in New York, they’re phasing it in different levels in different parts of the state. And it’s exciting to see all this action, but I think Washington State is the most exciting, and I highlighted it upfront in my piece because they are really getting bold there. By 2026, that policy change, if it goes into effect in Washington State, is expected to cover people making nearly $80,000 dollars a year. That’s a lot of people who make pretty middle-class money who will, in theory hopefully, if it happens, be owed extra pay or extra time when they’re asked to put in more work. About 400,000 people like Chip Ahlgren at the Jiffy Lube are expected to be affected. And what that shows is that not just that states can take action on their own, similar to the minimum wage. You know, this federal threshold really is a floor that they can go above, but they can go well above and beyond it. They can try to get us back to where overtime should have been had lawmakers not let it languish for decades. So, hopefully, it’s just the beginning, but I think a lot of advocates are really excited to see what Washington did because it pushed the envelope a little bit further.

VALLAS: You also profile another person who actually will be helped by the Washington proposal whose name is Sidney Kenney. What’s his situation, and how would the overtime update help him?

COVERT: Yeah, Sidney is similar to Chip in that he thought he was celebrating a career success when he was moved from an hourly to a salaried job. He works as a residential service provider for developmentally disabled people. And then he found out that being salaried really just meant that 9–5 Monday through Friday had no meaning at all anymore. He was asked to be basically on call all the time. He took his phone into bed with him in case someone had to contact him. He was doing work at a friend’s wedding. It was just constant. And he loved the job, but he said you know, basically, my time on this earth is precious, and I can’t spend it working all the time. So, he ended up going back to an hourly position. And he said to me you know, what he thinks will happen at his employer if and when Washington’s update goes through is that they’ll just convert everyone into hourly positions. And he said, you know, I would go back to my old job in a heartbeat if it was hourly, and if I could get overtime pay for all the extra work I’m doing. But until that point, he’s just going to keep doing what he’s doing now because he said, “It’s a crazy world, and nothing’s promised.” So, he wants to enjoy the time he gets here while he has it.

VALLAS: And it sounds like so now, some additional states are already paying attention to what we’ve seen in Pennsylvania, in California, in New York, now in Washington State. Where else can we expect this policy to crop up, and are you optimistic that we’re going to see additional states getting this done?

COVERT: I think so. I think that states would be really smart to look at the ones that have come before and realize that this is a really strong policy change they can make on their own that will help a lot of people and put money into people’s pockets. Massachusetts has a hearing, has held a hearing on a bill. Colorado’s labor department has a comment process going on for making a change to its overtime standards. There’s a bill in Maine’s legislature. And as Paul Sonn at the National Employment Law Project pointed out to me, when Trump released his overtime update proposal, there were 16 states that filed objections to it. So, all of those states, in theory, feel like it should go much further. And the good news is that they can take that action on their own.

VALLAS: I’ve been speaking with Bryce Covert. She’s an independent journalist writing about the economy. She’s also a contributing op ed writer at The New York Times and at The Nation. And you can read her piece, States Are Going Around Trump to Get More Workers Overtime Pay, of course, at TalkPoverty.org and on our nerdy syllabus page. Bryce, thanks so much for taking the time to come back on the show and for your reporting on this. This is, it’s great to have something to celebrate for a change.

COVERT: Happy to come on.

VALLAS: Don’t go away. More Off-Kilter after the break. I’m Rebecca Vallas.

[Hip Hop music break]

[many voices in the background through the rest of the episode]

VALLAS: And close out this week’s episode, because I’m doing a bit of it at Netroots Nation, thought it made sense to bring in a couple of my dear friends and colleagues, both of whom are dear friends of the show: Rebecca Cokley, of course, the director of the Disability Justice Initiative at the Center for American Progress, and the other Cokley: Patrick Cokley — he actually was the original Cokley, I should say — who is the co-founder of the Lead On Update, which is a network that works towards an inclusive society for people with disabilities. And I’m really excited to have both of you here. We actually have five Cokleys if we’re fully counting. The other three might make appearances, might not make appearances in this segment. We shall see.

PATRICK COKLEY: At any given moment.

VALLAS: But thanks to all of you for taking the time to come on the show.

REBECCA COKLEY: Definitely. We’re thrilled to be here today.

PATRICK COKLEY: Indeed. Thanks for having us.

VALLAS: So, big part of why I thought it made sense to do a little bit of a Netroots kick off with you guys and a little bit of a preview of some of what’s going on here in Philly was because one thing is absolutely abundantly clear about some of the through lines with this year’s conference. It really feels noticeably and categorically different from the past Netrootses that I’ve been to, that a lot of other people have been to. And that is that disability activists really do appear to be taking over and changing Netroots from the inside. And you guys are evidence of that because you’re on multiple panels this year, something that is a really wonderful direction for this conference to be heading. It maybe took a long time to get there. But wanted to hear from you guys about how some of that change is happening and some of what you’re talking about at the conference this year.

REBECCA COKLEY: You know, it really has been a gradual process. And Vallas, I go back to thinking about the first year that we did a show here.

VALLAS: Which was three years ago.

REBECCA COKLEY: Just three years ago when we were in St. Louis.

VALLAS: It was four years ago!

REBECCA COKLEY: Was it four years ago? Yeah.

VALLAS: That’s blowing my mind.

REBECCA COKLEY: It was four years ago. It was St. Louis. And how they had reached out to us because they had never had a disability session before at Netroots. And so, it was us and Chai Feldblum when she was Commissioner over at the EEOC doing a session talking about the intersections between LGBT history and disability history.

VALLAS: The Equal Employment Opportunity Commission.

REBECCA COKLEY: Yes, the Equal Employment Opportunity Commission. And you know, following that and a solid turnout at that session, then coming back the next year and doing a couple of panels. And then we were reached out to by them again this year, and they told us they wanted to go above and beyond. They were really wanting to be deliberate and intentional about disability inclusion. And so, everything from having statements about how to engage with disabled people in the handbook this year and the agenda to multiple panels on disability. We know that next year, all the workshops, in addition to looking at race and LGBT inclusion, are going to be asked whether or not there’re people with disabilities in the workshop. And my goal — and I’m putting it out into the universe, like I put it out on Twitter last night — was that next year, I expect to see disabled leadership on at least one, if not multiple, plenaries here at the conference. And it’s been very exciting to see the not even baby steps but the leaps and bounds that this conference has been taking. And honestly, I think the disability community has a lot to learn from the example set by Netroots.

VALLAS: Now Patrick, you and Rebecca Cokley and a number of other folks are all on a panel tomorrow, which is one of the kind of big panels. And it’s somewhat ambitiously titled “How Disability Can Save the Progressive Movement.” What’s that about, and what’s the panel going to be digging into?

PATRICK COKLEY: Well, you know, I think one of the things that’s most exciting about what’s going on with that ties into the fact that we’re at sort of what you could think of as the crossroads of a perfect storm. We have the 30th anniversary of the Americans with Disabilities Act coming up next year. You have us being in an election year and an election cycle that we’re all interested in. But more than anything, what that 29 to 30 years of the ADF means is we’re talking about a generation in multiple communities that are now having a new understanding of people, what disability means.

And you know, a reminder that the ADA is not the Disabled Persons Act. It is the act for all Americans. And so, we’re starting to see all of these groups realize and realize themselves inside those civil rights. So, as happens when one is almost 30, you might look at particular instances — and these are things that we’ll be thinking about for the ADA, as the ADA turns 30 — will its waistline expand, as many of ours do when we’re over our 30s and be filled with more groups and more discussions about disability? Or will it slim down to a more trim policy weight? Will it become more family-oriented, thinking critically about how parents with disabilities are parenting their children? Or will the —

REBECCA COKLEY: Will the ADA need a minivan?

PATRICK COKLEY: Will the ADA need a minivan? Will the ADA have a second adolescence where it wears too much makeup and goes to a lot of advocacy and protest movement operations?

VALLAS: And shops at Forever 21 a little too long.

PATRICK COKLEY: Oh, yes, definitely.

VALLAS: And I catching your drift?

PATRICK COKLEY: [laughs]

VALLAS: Belly chains!

PATRICK COKLEY: Indeed. So, all of these things have come to bear, and I think that’s why we’re seeing a larger presence. Now as to whether or not disability can save the progressive movements, definitely so. You know, one of the cool things —

VALLAS: And what does that mean? I want to ask that question because —

PATRICK COKLEY: What does that mean?

VALLAS: — I think I know what you mean, and we’ve had side conversations about what you mean when you use that language. But listeners might be going, why does the progressive movement need saving?

PATRICK COKLEY: Sure.

VALLAS: And what is it that disability inclusion would achieve?

REBECCA COKLEY: You know, to me, I think the conversation has always been one that’s really grounded in trauma. And people don’t come to movement work because their life is hunky dory. You don’t join a revolution because you have what you need, and your family is well taken care of. You join a revolution because you notice the wrongs in the world. And so, you come to movement work largely out of trauma. And then the reality is — And I think we could honestly throw a rock at anybody that we know in this room, whether it be our friends from Move On, from Social Security Works, from any of these organizations and say, “Have you escaped this work totally untraumatized?” And folks would say, “No.” This work is rough, and it’s particularly rough in this administration, in this time where we’re seeing families separated, where we’re seeing folks having their health care threatened on a daily basis. And it’s hard to keep our heads above water, you know. Most of the activists I’ve been talking to in recent years have all been talking about how the mental health struggle is really real right now. The substance misuse struggle in movement spaces is really real. Eating disorders in movement spaces is really real. And it’s something traditionally that we haven’t talked about. And so, to me, when we talk about how weaving a disability lens into the progressive movement can save progressives, it’s taking these things out of the shadows and talking about them. It’s really de-stigmatizing the internal battles that we’re all fighting as we’re trying to keep our heads above water for the external ones.

VALLAS: A lot of the work that your project is actually doing — the Disability Justice Initiative at the Center for American Progress — now seeing this mirrored outside of just the walls of the organization where you and I work, but within the broader progressive community. That’s sort of what I’m hearing you say, that this progression within Netroots, a conference that matters a lot to the kind of progressive digital sphere, but a lot of folks who care about politics more broadly, is it fair to say that it looks like a microcosm of what we’re seeing happening in the broader progressive movement?

REBECCA COKLEY: Oh, I think definitely. I mean I always think about my favorite moment at the last Netroots conference or two years ago — because I missed last year — was getting off the elevator with a bunch of disabled activists, and Randy Brice was there doing press. Randy Bryce, our friend, Mr. IronStache who ran against Paul Ryan. And he was actively talking about the ACA fight. And before he even saw us — we were walking up behind him — and he was like, “And people with disabilities saved health care and continue to save health care. And we need to stand in solidarity with them.” And it wasn’t prompted. It wasn’t set up by the fact that he saw a bunch of United Colors of Benetton disabled folks coming in his direction, but it was totally unprompted. And that, to me, is so significant because here is somebody who was running for office, has connections to our movement as a caregiver for his mom. But at the same time, isn’t on the frontlines of the disability fight on a daily basis, but recognized that strength.

And it was funny. We were walking down the street the other day here in Philly and ran into him. And he was like, “Cokleys!!! Oh my god! It’s so good to see you guys!” And the fact that it’s not, it’s no longer being framed as frequently as it was before as like a niche conversation or as a short bus conversation as, we’re going to talk about all these movements, and if we have five minutes, disability rights.

PATRICK COKLEY: Yeah. I think we also are in a very unique place, whereas we have a large number of millennials coming into their own. And one of the markers of that generation is that they bring their whole selves to the table, and they demand that we talk about all of those things at once. And the exciting thing, in this sense, is that since disability crosses over multiple socioeconomic groups, anyone can join our group at any time, what this does is it creates a safe space or an environment where all of us can bring the best of our movements to bear. And then also, take those lessons and branch them out. And we’re starting to see that. I mean in addition to our panel tomorrow that’s going to talk about how to save the progressive movement, there’s my other panel on Friday where we’re going to talk about black and disability identity. And these are conversations that have always existed in these communities, but by giving them a safe space and a unified space to have these conversations, we not only move disability, but we move civil rights and justice for everyone at once. And that is sort of an exciting thing that keeps us to push past the trauma and keeps us working in these spaces, even when it can be sort of very scary and very intense.

VALLAS: Now obviously, talking about these issues is just the first step. That’s not enough. One of the things that gets ignored all too often is also making our spaces not just inclusive of who is at the table and who’s participating and who get speaking roles, but also making our spaces accessible as well. That’s something that’s been a challenge for Netroots over the years, and it’s actually something they’ve been called out on as recently as last year. Is that something that we’re seeing improve as they’re now actually spending a lot more of the time and the resources here in a way that puts disability front and center?

PATRICK COKLEY: You know, indeed. I’ve always thought that one of the ways that you show included access and inclusion is not necessarily about doing it all right the first time. It’s whether or not you have a structure to make corrections when it needs to happen. A good example is my own panel. We had some conversations about accessibility. We got here onsite and realized that the room that we had was not necessarily going to be set up the way we wanted. But there was a process for us to be able to work with the Netroots staff to get this solution set up. And now we’re in a room that is ramped and is going to be accessible. Is it the best sort of scenario? No, but would I rather have an organization that’s willing to talk and learn from it and then make proactive change? Yes. That’s way better than what we’ve seen in the past where we have no access and no ability to make those changes.

REBECCA VALLAS (HOST): Other Cokley, same question to you. You’ve actually been doing a lot of the work with Netroots to ensure accessibility. What kinds of changes have you seen, and are we getting closer with the conference actually being accessible?

REBECCA COKLEY: You know, I think we’ve definitely seen a fair amount of changes. I think obviously, the inclusion of language around disability in the agenda this year. I think the one thing that always has impressed me about Netroots is when there has been issues, the ability to reach someone and have them respond to it really quick has been phenomenal. I mean we ran into issues several years ago with one of the room setups, and it was taken care of in five minutes. And to me, it was one of those models that I went back to the disability community and was like, I had to wait two hours at a conference center for a disability conference to get something handled, and it took me seven minutes at Netroots.

And I think also just like it’s been exciting to me just to see the sheer number of disabled folks here that I don’t know. Like typically, it’s like oh, there’s that dude. Oh god, there’s that chick. And right now it has been like oh, I don’t know that person! Who are you? Where are you from? Oh, you’re from, you know. We were talking to Jen Wolff who does work with the United Spinal Association in Iowa about what they’re seeing in Iowa and Medicaid issues in Iowa. And connecting with some of the local folks from Pennsylvania ADAPT. And even they were saying how excited they were to be here and what an interesting conference it was and how excited they were to see how accessible it was and just also just the response to accessibility issues just in general.

VALLAS: Well, we’ve got lots more to talk about in the next DJI takeover of this show, which we’re going to have coming up around the anniversary of the Americans with Disabilities Act. But just wanted to check in with you guys both, given how much you’ve been doing to change the conversation within the progressive movement about disability. So, good luck on the panels. So thrilled to see the conversation that comes from it. And thanks to you guys both for stopping by radio row.

REBECCA COKLEY: Thanks so much, Vallas. We’re thrilled to be here.

PATRICK COKLEY: Indeed. Thanks for having us.

VALLAS: And that does it for this week’s episode of Off-Kilter, powered by the Center for American Progress Action Fund. I’m your host Rebecca Vallas. The show is produced by Will Urquhart and David Ballard. Find us on Facebook and Twitter @offkiltershow, and you can find us on the airwaves on the Progressive Voices Network and the We Act Radio Network or anytime as a podcast on iTunes. See you next week.

♪ I want freedom (freedom)

Freedom (freedom)

Now, I don’t know where it’s at

But it’s calling me back

I feel my spirit is revealing,

And now we just trynta get freedom (freedom)

What we talkin’ bout…. ♪