By Jason Rabinowitz, Secretary-Treasurer, Teamsters Local 2010

More than 80 percent of University of California (UC) support staff employees are paid wages too low to provide the basic necessities of life in the areas where they live and work, according to preliminary findings of a study conducted by the Economic Policy Institute.  

As Governor Brown and UC President Janet Napolitano meet to discuss the financial future of the UC, it’s imperative that they recognize the dire financial situation of many UC employees. The UC is the third largest employer in California, employing nearly 200,000 workers, directly creating 1 in 46 jobs in the state, and generating $46.3 billion in economic activity annually. The 14,000 administrative and essential support services workers in the UC system are 81% female and over 50% people of color, and include administrative assistants, collection representatives, childcare assistants, and 911 dispatchers.  

Between 2007 and 2011 these essential support workers received no pay increases, while student tuition skyrocketed. The workers have also fallen behind due to substantial increases in costs for retirement and healthcare, parking fees, and inflation.  During the same period, the state slashed funding to UC, and currently contributes $460 million less per year in funding than it did in 2007. On a per-student basis, state funding for UC has decreased by more than half since 1991.

“Our voices have been silenced for too long, and need to be heard,” said Catherine Cobb, President of Local 2010 and former employee at UC Irvine. “The answer is not more pay-cuts and tuition increases. The time has come for the state to fund the University of California.”

Elise Gould, Senior Economist with EPI explains:

The Economic Policy Institute has calculated basic family budgets for every area of the United States for over a decade now. Our methodology is so respected that the family budget data has been used and cited by groups ranging from living wage advocates to private employers to academics to policymakers. These basic family budgets measure how much it costs various representative family types to have an adequate but modest standard of living in over 600 local areas across the country. Applying the basic family budget data to the reported wages of University of California union workers indicates that 82.5 percent of University of California support employees in the clerical and related classifications would not earn enough from their wages, even if they worked full-time, to exceed the basic family budget for a family with one adult and one child in their respective metropolitan areas.

It’s unfortunate that the University is contributing to the national problem of declining middle-class wages and increased income inequality. The UC is one of the leading economic forces in California, and has a tremendous impact on the economy of our state.  We need UC to be a force for good jobs in our communities and a fair economy. The Legislature and the Governor must renew California’s commitment to adequately fund higher education.

This past week, much to everyone’s surprise, Democrats in the House of Representatives managed to slip a proposal to increase the minimum wage into a bill funding the Departments of Labor and Health and Human Services.

Faced with the specter of having to vote against increasing the wage floor from its current embarrassing level of $5.15 to $7.25 by Jan. 1, 2009, Congressional Republicans snapped into action and pulled the bill.

This is what these brave souls do in election season when they don’t want to have to go back to their districts and answer questions as to why it’s ok to cut hundreds of billions in rich people’s taxes but deny the working poor a boost.

Well, I say: “Not so fast, guys.  Let’s chat about this for a few minutes.”

Not let me get this straight.  Last month, you passed $70 billion worth of new tax cuts, mostly by extending earlier Bush cuts on dividends and capital gains.  When tax cuts target investment income, the benefits flow to the wealthy, and these cuts are exhibit A: they reduce millionaire’s tax payments by $43,000, and those of middle-income families by $20.  Sorry, that’s not a typo.  It’s what you get when you put the YOYOs in charge of fiscal policy.

Wait a second, where you going?  I’m not done.  Set a spell…

After you finished that master stroke, you came alarmingly close to repealing the estate tax, a gift to the Paris Hilton’s of the world that would have cost $1 trillion over 10 years.  A few stalwarts blocked you, but you’re sure to be getting back to this one first chance you get.

Other than that, let’s see…you made a lot of noise about gay marriage and flag burning, and you guys in the House just passed the Iraq War Resolution supporting the administration on Iraq and rejecting the setting of a date for troop withdrawal.

Oh, and you raised your own pay by $3,300.  In fact, you’ve raised your own salaries by about $35,000 since the last minimum wage increase.

But when it comes to raising the minimum wage, you pull the bill.

Let’s review a few facts.  The Federal minimum wage has been stuck at $5.15 since September 1, 1997.  Come this December, you will tie the longest spell on record for ignoring the labor market’s wage floor (i.e., the Reagan years, from 1981 to 1990, when Bush I signed an increase).  And since it is not adjusted for inflation, its buying power has eroded by 25% since then.

That’s why the current minimum wage, in real terms, is at its lowest value since 1955.  Compared to the average wage, it’s at 31%, the lowest level on record going back to 1947, meaning those stuck at or near the minimum wage are falling further behind the rest of us.

As always, your rationale for not raising the minimum is that it would hurt low-wage workers, whose employers would have to fire them when the wage mandate priced them out of the labor market (one can’t help but note that this concern doesn’t come up when you mandate your own pay hikes).

That would be a plausible argument, were it not for the fact that tons of careful research has disproved it.  The federal minimum wage has been raised 19 times by Congress since its introduction in 1938.  Eighteen states, covering about half of the national workforce, have minimum wages above that of the Federal level.  And over 100 cities have living wages—a higher minimum that applies to workers on city contracts or at firms with local government subsidies. 

In other words, more than any economic policy, we’ve had hundreds of “pseudo-experiments”—rare in economics—that allow us to test the impact of wage mandates on various outcomes.  These experiments allow us to compare before and after, or, even better, compare nearby places that face similar economic conditions but have different minimum wage laws.

The question that has received the most scrutiny is whether increases in the minimum wage lead employers to lay workers off.  You probably don’t want to hear the results from me, but here’s how Nobel laureate in economics, Robert Solow, put it: “The main thing about this research is that the evidence of job loss is weak. And the fact that the evidence is weak suggests that the impact on jobs is small.”

A great example comes from the last Federal minimum wage increase, back in 1996-97.  The usual suspects predicted massive job losses among those affected by the increase from $4.25 to the current level of $5.15.  Instead, low-wage workers experienced the strongest job market in 30 years.  Poverty fell to historic lows, particularly for the most disadvantaged workers, such as less-skilled minorities and single-mothers. 

On the other hand, there no such body of evidence supporting your claims that cutting taxes for the rich actually accomplishes anything beyond distributing wealth up to the scale.  Did I mention that profits as a share of national income are at a 39-year high?

Now, don’t get me wrong.  I’m not implying for a nanosecond that an increase in the minimum wage would offset the damage you guys have done over the past few years.  In that scheme of things, raising the pay of about seven million low-wage workers by less than two bucks is a token gesture which you will hopefully be forced to make so you can show your faces again in public.

But it would make an important difference to those workers, so you should do it.  The fact that I even have to argue with you about it is what’s so painful.