Tackling Economic Inequality WE ARE NEW YORK’S LAW SCHOOL www.nyls.edu/impact
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Tackling Economic Inequality WE ARE NEW YORK’S LAW SCHOOL www.nyls.edu/impact
www.nyls.edu/impact WE ARE NEW YORK’S LAW SCHOOL Tackling Economic Inequality FRIDAY, APRIL 17, 2015 9:00 a.m. – 9:15 a.m. (Auditorium) WELCOMING REMARKS Anthony Crowell, Dean and President, Professor of Law, New York Law School (NYLS) Ross Sandler, Professor of Law and Director, Center for New York City Law, NYLS 11:30 a.m. – 12:45 p.m. (Auditorium) HOME AND COMMUNITY (This session is accredited for 1.5 CLE hours in Areas of Professional Practice) Moderator: Andrew Scherer, Policy Director, Impact Center for Public Interest Law, NYLS Andrew Scherer, Policy Director, Impact Center for Public Interest Law, NYLS Panelists: Vicki Been, Commissioner, New York City Department of Housing, Preservation, and Development 9:15 a.m. – 10:00 a.m. (Auditorium) BREAKFAST ROUNDTABLE Benjamin Dulchin, Executive Director, Association for Neighborhood and Housing Development Moderator: Errol Louis, Political Anchor, NY1 News, and host of “Inside City Hall” Panelists: Eric Alterman, Author, Inequality and One City Richard Buery, Deputy Mayor for Strategic Policy Initiatives, City of New York Maya Wiley, Counsel to the Mayor, City of New York 10:15 a.m. – 11:30 a.m. (Auditorium) INCOME AND WEALTH (This session is accredited for 1.5 CLE hours in Areas of Professional Practice) Moderator: Carlin Meyer, Professor of Law, Emeritus, NYLS Panelists: Steven Banks, Commissioner, New York City Human Resources Administration/ Department of Social Services Andrew A. Beveridge, Ph.D., President and CEO of Social Explorer; Professor of Sociology at Queens College and the Graduate School and University Center of the City University of New York Lance Freeman, Professor, Graduate School of Architecture, Planning and Preservation, Columbia University Rachel D. Godsil, Eleanor Bontecou Professor of Law, Seton Hall Law School; Chair, New York City Rent Guidelines Board 1:00 p.m. – 2:00 p.m. (Events Center) LUNCH Keynote Speaker: Governor Howard Dean Introduction: Deborah N. Archer, Associate Dean for Academic Affairs; Professor of Law; Co-Director, Impact Center for Public Interest Law; and Director, Racial Justice Project, NYLS 2:15 p.m. – 3:30 p.m. (Auditorium) FAMILY AND CHILDREN (This session is accredited for 1.5 CLE hours in Areas of Professional Practice) Moderator: Lisa F. Grumet, Director, Diane Abbey Law Institute for Children and Families, NYLS Panelists: Gladys Carrión, Commissioner, New York City Administration for Children’s Services Melanie Hartzog, Executive Director, Children’s Defense Fund—New York Sophia Pappas, Chief Executive Officer, Division of Early Childhood Education, New York City Department of Education Kim Sweet, Executive Director, Advocates for Children of New York 3:30 p.m. – 4:45 p.m. (Auditorium) ADMINISTRATION OF JUSTICE (This session is accredited for 1.5 CLE hours in Areas of Professional Practice) Moderator: Deborah N. Archer, Associate Dean for Academic Affairs; Professor of Law; Co-Director, Impact Center for Public Interest Law; and Director, Racial Justice Project, NYLS Panelists: Elizabeth Glazer, Director, Mayor’s Office of Criminal Justice, City of New York Hon. Jenny Rivera, Associate Judge, New York Court of Appeals Nicholas Turner, President and Director, Vera Institute of Justice David Udell, Executive Director, National Center for Access to Justice; Visiting Professor from Practice, Cardozo Law School 4:45 p.m. – 5:45 p.m. (Fifth Floor Café) RECEPTION Saskia Sassen, Robert S. Lynd Professor of Sociology, Columbia University Paul Sonn, General Counsel and Program Director, National Employment Law Project 001 Tackling Economic Inequality Economic Inequality in New York City: Causes and Solutions TABLE OF CONTENTS INCOME AND WEALTH PANEL ................................................................................ 3 SOME DATA ON CHANGING INEQUALITY IN NYC AND THE US, BY ANDREW BEVERIDGE ......................................................................................................................................... 3 HRA’S BIENNIAL EMPLOYMENT PLAN ................................................................. 13 NOTICE OF ADOPTION OF RULE – THE LIVING IN COMMUNITIES (LINC) RENTAL ASSISTANCE PROGRAMS .............................................................................................. 48 NATIONAL EMPLOYMENT LAW PROJECT, CITY MINIMUM WAGE LAWS ...................... 65 NATIONAL EMPLOYMENT LAW PROJECT, GIVING CAREGIVERS A RAISE: THE IMPACT OF A $15 WAGE FLOOR IN THE HOME CARE INDUSTRY ..................................................... 70 NATIONAL EMPLOYMENT LAW PROJECT, THE GROWING MOVEMENT FOR $15 ........... 78 002 Some Data on Changing Inequality in NYC and the US Andrew A. Beveridge, Queens College and Graduate Center CUNY and Social Explorer “Tackling Inequality” New York Law School, April 17, 2015 003 Median Household Income US, NYC and Manhattan 1979, 1989, 1999 and 2013 in 2013 Dollars $80,000 $72,190 $70,000 $65,750 $58,709 $60,000 $54,518 $50,000 $58,520 $54,096 $52,250 $50,361 $53,535 $52,223 $41,578 $41,429 $40,000 $30,000 $20,000 $10,000 $0 US NYC 1979 1989 1999 Manhattan 2013 004 005 006 Changing Mean Income For Quintiles and Top 5 percent 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 Lowest fifth Second fifth Third fifth Fourth fifth Highest fifth Top 5 percent 007 Mean Income of Quintiles and Top Five Percent 2013 $1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 Lowest Quintile United States Second Quintile New York city Bronx County Third Quintile Queens County Fourth Quintile Kings County Highest Quintile Richmond County Top 5 Percent 008 New York County Wall Street Profits and Bonus Pool Size--1995 to 2014 80.0 60.0 40.0 20.0 0.0 -20.0 -40.0 -60.0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Bonus Pool 2005 2006 Profits 2007 2008 2009 2010 2011 2012 2013 009 2014 Income Inequality in New York • New York County—Most Unequal County in the US (Those Over 100,000) • Ratio of Top Quintile to Bottom Quintile 42.59 $9,681 to $420,015 • New York City—Number 9 Based Upon Ratio, Number 7 Based Upon Gini Trails Atlanta, Baton Rouge, Washington DC, Cincinnati, Boston and New Orleans • Ratio of Top Quintile to Bottom Quintile 26.28 $9,188 to $241,445 • New York Combined Statistical Area (Large Metro)—Most Unequal in the United States • New York Metropolitan Area—Most Unequal in the US, except for Bridgeport-Stamford-Norwalk (which is also in the area) 010 011 Contact and Resources • [email protected] • Social Explorer www.socialexplorer.com • Visually Explore Demographic Data • 220 years of demographic data, 25,000 maps, hundreds of profile reports, 40 billion data elements and 335,000 variables • Use our interactive tools to easily create and share maps, presentations and tables, or compare and analyze data and discover amazing facts • Access current and historical demographic data, create reports and download data in convenient formats quickly and easily. • Free Trial Available from me or on the literature table • http://www.census.gov/censusexplorer (Series of Interactive Visualizations Using Census Data) • • • • • Young Adults: Then and Now Edition Population Estimates Edition Retail Edition People Education and Income Edition Commuting Edition 012 HRA’S BIENNIAL EMPLOYMENT PLAN AN OPPORTUNITY FOR REFORM TO MAKE SURE THAT THE AGENCY’S EMPLOYMENT PROGRAMS ARE EFFECTIVELY FIGHTING POVERTY & INCOME INEQUITY Human Resources Administration Department of Social Services 013 1 REFORMS DEFINED IN MAY BUDGET TESTIMONY When I testified before you at the May budget hearings, I noted a number of challenges that faced HRA in meeting its goals: Ensuring HRA’s employment & training programs are effective in connecting or reconnecting New Yorkers to the workforce. Phasing out the one-size-fits-all approach which has not been effective in helping clients. Addressing counterproductive policies and procedures that kept clients from moving towards work and are associated with adverse outcomes such as homelessness. Changing policies that put New York City at risk of as much as $10 million in fines for unnecessary fair hearings. The Employment Plan implements the reforms presented in May. Human Resources Administration Department of Social Services 014 2 REFORM TO MAKE HRA’S EMPLOYMENT PROGRAMS MORE EFFECTIVE • Every two years, HRA is required to submit to the State Office of Temporary and Disability Assistance (OTDA) an Employment Plan, which outlines employment and training services for applicants and recipients of Cash Assistance and Supplemental Nutrition Assistance Program (SNAP) aid (formerly known as food stamps). • This year, HRA is using its Employment Plan to propose program reforms to improve employment and training outcomes so that more clients have an opportunity to achieve increased economic security by obtaining employment, moving off the caseload and out of poverty. Human Resources Administration Department of Social Services 015 3 REFORM TO MAKE HRA’S EMPLOYMENT PROGRAMS MORE EFFECTIVE • In accordance with the biennial Employment Plan process, HRA’s reforms will be phased in during the two-year period covered by this plan. As the reforms are phased in, they will be evaluated for efficacy and impact and modified accordingly. • HRA’s efforts to fight poverty and income inequity through its employment services will be enhanced by comprehensive employment initiatives that are being developed by the Mayor’s “Jobs for New Yorkers” task force. Human Resources Administration Department of Social Services 016 4 REFORM TO MAKE HRA’S EMPLOYMENT PROGRAMS MORE EFFECTIVE The reforms to HRA’s employment programs are based on these principles: – Maximizing education, training, and employment-related services will open job opportunities and create the basis for building a career pathway out of poverty. – Improving assessments so we address each client’s actual strengths and needs will improve outcomes and reduce the 1 out of 4 clients receiving employment assistance who return to the caseload within 12 months. – Eliminating unnecessary punitive and duplicative actions that lead to preventable negative actions and fair hearings (that potentially subject New York City to $10 million in financial penalties) will allow staff to focus on problem solving and allow clients to avoid delays in accessing services, finding jobs and moving out of poverty and into sustainable employment. Human Resources Administration Department of Social Services 017 5 HRA’S PLAN IS BASED ON EXTENSIVE FEEDBACK To develop this Plan that HRA will phase in, HRA obtained feedback from a wide variety of key stakeholders. • More than 40 focus groups & meetings were held with HRA staff, existing and former clients, service providers, community-based organizations, advocates, the legal services community and other City agency partners. • A survey of HRA’s workforce to obtain feedback on reforms resulted in more than 6,000 responses. • An additional survey will be conducted of current and former HRA clients during the public comment period for the Plan. • Additional recommendations that cover issues not related to the Employment Plan are being considered as part of our ongoing broader reform and program improvement efforts. Human Resources Administration Department of Social Services 018 6 WHY DOES THE SYSTEM NEED REFORM? • HRA spends $200 million annually on employment programs that have not been as effective as they should be in connecting or reconnecting New Yorkers to the workforce and at minimizing return to the Cash Assistance caseload. • HRA’s past approach was to track job placements for only 6 months, but 25% of HRA’s reported placements & assistance ended up with clients returning to seek recurring Cash Assistance again within 12 months. Human Resources Administration Department of Social Services 019 7 WHY DOES THE SYSTEM NEED REFORM? Almost half, 43,953, or 47%, 92,717 job placements that HRA claimed in 2013 were not as a result of the agency’s direct efforts. • 15,107 individuals, or 16%, who were already working when they received a one-time grant, usually rental assistance to prevent eviction and homelessness. • 11,721 applicants, or 13%, who were rejected for assistance but were discovered by later data matching to have found jobs on their own. • 17,125 clients, or 18%, who were not connected to HRA’s employment programs and later data matching found they had a job, or had a job already when they were accepted for ongoing assistance or food stamps. Human Resources Administration Department of Social Services 020 8 WHY DOES THE SYSTEM NEED REFORM? • Counterproductive HRA policies and procedures have led to punitive actions, including sanctions that are linked to negative outcomes for clients. – 23% of applicants for Department of Homeless Services’ shelters during the first 6 months of 2013 had a Cash Assistance case that closed or had a sanction related to non-compliance in the previous 12 months. – 1/3 of Cash Assistance recipients had their 1st application for assistance rejected, but were accepted soon after that rejection. – More than 1/3 of Cash Assistance clients subject to HRA’s current work programs are in the sanction process at any point in time. HRA has not permitted sanctioned clients to participate in training, work programs & job search, and thus they can’t receive the help they need to get a job. Human Resources Administration Department of Social Services 021 9 HRA’S EMPLOYMENT-RELATED WORK IS BROADER THAN WHAT IS COVERED BY THE BIENNIAL EMPLOYMENT PLAN • Annually HRA provides critical support that helps many low-income New Yorkers remain in the workforce: – – – – 3 million receiving Medicaid, 1.8 million receiving federally-funded food assistance, 700,000 receiving home energy assistance, and 100,000 receiving one-time cash assistance to prevent evictions and utility shutoffs and assist with other emergencies. • Efforts aimed at keeping low-income workers in the workforce are much less expensive and more efficient than providing assistance to New Yorkers after they are out of the workforce, especially after an extended absence. Human Resources Administration Department of Social Services 022 10 WHICH HRA CLIENTS ARE AFFECTED BY THIS PLAN? The Employment Plan is designed for the small portion of Cash Assistance recipients who are required by federal and state law to engage in work and work-related activities. • Of 350,000 New Yorkers on Cash Assistance in any given month and of 500,000 unduplicated New Yorkers who receive recurring Cash Assistance during the year, about half are children below age 18. • Of 172,000 households receiving assistance, about 92,000 are permanently or temporarily exempt because they are child-only cases or have an adult who is unemployable and/or exempt due to disability, illness or age, etc., based on the criteria of federal and state law as applied under prior Administrations. • About 24,000 households have a working adult, but have income low enough to qualify for cash assistance. They are working and already meet the work requirement. • About 56,000 households have adult Cash Assistance recipients required to participate in work and work-related activities in order to receive assistance. The Employment Plan is aimed at helping this group. • About 20,000 of the 56,000 are in the sanction status or process at any given time and not participating in work or work-related activities. Human Resources Administration Department of Social Services 023 11 EMPLOYMENT PLAN/REFORM PROGRAM • Maximize Education, Training, And Employment-Related Services • Phase Out The Work Experience Program (WEP) And Replace It With More Effective And Sustainable Work Activities • Replace “One-Size-Fits-All” Approach With Improved Assessments & Programs That Address Specific Clients’ Needs & Abilities – Customize Hours Of Required Work-Related Activities To Enable Individuals To Succeed And Move Off Of The Caseload – Create A New Employment Strategy For Youth – Implement Employment Strategies For Limited English Proficiency (LEP) Cash Assistance Recipients – Create An Employment Strategy For Shelter Residents – Provide More Effective Support For Domestic Violence Survivors – Improve Services For New Yorkers With Work Limitations • Enhance Program Participation And Dispute Resolution Human Resources Administration Department of Social Services 024 12 MAXIMIZE EDUCATION, TRAINING, AND EMPLOYMENT-RELATED SERVICES Among HRA’s employable clients, 60% lack a high school diploma and 30% of those are below 9th grade proficiency in math and reading. Without the education and skills needed in today’s labor market, Cash Assistance recipients will continue to face substantial barriers to sufficient wages and quality jobs. The challenge is to avoid training programs that do not prepare clients for the current job market and instead focus on degrees and targeted training programs that have proven value. HRA will: • Allow recipients up to age 24 to participate in full-time basic education, as long as they meet yearly goals and make sufficient progress toward obtaining a credential (beyond the current 12-month limit). It is important to provide people with the education to start building a career as early as possible. • Allow recipients with limited English proficiency (LEP) to participate in fulltime English as a Second Language (ESL) coursework and test for literacy in their own language, in order to prepare them for work assignments or to move off of the caseload. Human Resources Administration Department of Social Services 025 13 MAXIMIZE EDUCATION, TRAINING, AND EMPLOYMENT-RELATED SERVICES • Increase access to targeted training for jobs in high-growth industries and utilize available Career Pathway programs. • Allow participation in 4-year college degree programs for recipients who participate in work activities for 20 hours per week and are able to maintain an appropriate average in accordance with the new state law. • Increase supports for Cash Assistance recipients enrolled in college consistent with the new state law, and expand or replicate a CUNY program that provides supports that help students complete their studies. Human Resources Administration Department of Social Services 026 14 PHASE OUT CURRENT WORK EXPERIENCE PROGRAM (WEP) MODEL & REPLACE IT WITH MORE EFFECTIVE & SUSTAINABLE WORK PROGRAMS Over time, HRA will phase in these actions: • Replace WEP requirements with additional job search, work study, or internships for Cash Assistance clients with recent work histories or with advanced degrees. • Replace WEP requirements with internships & work study for those in college. • Expand HRA’s capacity to develop and support internship and community service training programs as well as subsidized employment similar to HRA’s current Parks Opportunity Program for all Cash Assistance recipients who require a core work activity under federal & state law in order to replace WEP. • Develop the capacity to expand the JobsPlus program that offers employment opportunities for New York City Housing Authority residents who are Cash Assistance recipients. • Increases employment vouchers for uses such as with Career Pathway programs tied to careers in high-growth industries. Human Resources Administration Department of Social Services 027 15 CUSTOMIZE HOURS OF REQUIRED WORK-RELATED ACTIVITIES SO INDIVIDUALS SUCCEED & MOVE OFF THE CASELOAD To provide more flexibility & eliminate the one-size-fits-all approach HRA will: • • • Maintain participation at 35 hours per week for families with children age 6 & older, but allow a reduction to 30 hours, as permitted by federal and state law, when families face necessary ongoing obligations, such as continuing medical treatments or mandated parenting classes. Families with children aged 4 & 5 who don’t need childcare thanks to the Mayor’s new pre-K program can also qualify for this reduction when needed. Allow 25 hours for the parents of children age 3 or younger, compared to 25 hours for parents of children under age 6 elsewhere in NYS or the 20 allowed by federal law. Childcare for very young children is more difficult to find. The reduced requirement, which with travel time can still amount to seven hours a day, will help parents remain engaged and avoid unnecessary sanctions, which can affect the financial stability of the family. A parent with a child 3 or younger who can secure child care to work longer hours will be encouraged to do so. Implement a pilot a program for job ready applicants, such as those whose Unemployment Insurance Benefits have expired, and who are already searching for work, that allows selfdirected job search, subject to documentation. Human Resources Administration Department of Social Services 028 16 CREATE A NEW EMPLOYMENT STRATEGY FOR YOUTH About 24,000 young adults up to age 24 receive Cash Assistance from HRA. About half are ages 18-20. The overwhelming majority lack the high school degree necessary for access to the job market. HRA will: • Create a youth coordinator position to manage youth services and develop relationships with community providers. • Establish a relationship and devise a multi-year strategy with the Administration for Children Services (ACS) to coordinate employment services for youth aging out of foster care. • Connect youth ages 18-24 without a High School diploma or equivalent to High School or equivalency classes in order to prepare them for work assignments and to move off of the caseload. Human Resources Administration Department of Social Services 029 17 IMPLEMENT EMPLOYMENT STRATEGIES FOR LEP CASH ASSISTANCE RECIPIENTS • Only 4,000 limited English proficient (LEP) Cash Assistance adults are subject to HRA’s employment services. • HRA will implement a customized employment strategy for these clients. Human Resources Administration Department of Social Services 030 18 CREATE AN EMPLOYMENT STRATEGY FOR SHELTER RESIDENTS About 13,700 cash assistance recipients reside in a Department of Homeless Services homeless shelter. To address their needs, HRA will: • Implement shelter-based employment programs based on successful program models currently operated by shelter providers. • Create new strategic milestones for employment vendors serving homeless clients. • Implement a comprehensive assessment, case management services, and a JobsPlus-type program model for shelter clients. Human Resources Administration Department of Social Services 031 19 PROVIDE MORE EFFECTIVE SUPPORT FOR DOMESTIC VIOLENCE SURVIVORS Many domestic violence survivors seek assistance but do not report their status and thus miss out on receiving assistance that could be vital in helping them rebuild their lives and be safe. In order to improve its ability to determine who is eligible for these services, HRA will: • Offer survivors an opportunity to enroll in effective programs like the Sanctuary for Families initiative to develop the skills to work & become self-sufficient. • Extend the Domestic Violence Waiver period to six months from the current four and thereby reduce unnecessary administrative appointments for survivors of domestic violence. • To enhance safety and security for survivors, modify HRA’s partial waiver program and grant a full waiver for those who need it. Human Resources Administration Department of Social Services 032 20 IMPROVE SERVICES FOR NEW YORKERS WITH WORK LIMITATIONS HRA will improve assessing and identifying all clients with barriers to work, especially those with mental health issues who do not disclose or may not be aware of them. Missing problems can set clients on the course for failure and unnecessary sanctions, when better assessment could ensure appropriate assignments and success. HRA will: • Implement more comprehensive assessments to expand access to programs for clients with work limitations due to disabilities. • When seeing a client, HRA Job Center staff will review his or her case for a prior history of unsuccessful applications for federal Supplemental Security Income (SSI) benefits and a history of non-compliance with program requirements, and refer such cases for assessment by HRA’s programs for clients with disabilities. Human Resources Administration Department of Social Services 033 21 IMPROVE SERVICES FOR NEW YORKERS WITH WORK LIMITATIONS • Implement screens for reasonable accommodation needs and mental health issues. • Implement a functional assessment in vocational services. • Assist clients in filing SSI applications and appeals of denials of SSI applications, including federal court appeals. • Provide client-centered services for those with substance use disorders, including Harm Reduction programs for clients with histories of non-compliance with traditional substance use treatment based on existing successful government-supported program models. Human Resources Administration Department of Social Services 034 22 ENHANCE PROGRAM PARTICIPATION & DISPUTE RESOLUTION HRA is upheld in only 10% of the Fair Hearing disputes that actually go to a hearing. Because of the excessive number of unnecessary Fair Hearings, the City is now subject to potential financial penalties of up to $10 million annually. Even more important, time and money spent on fair hearings do nothing to move clients out of poverty. HRA will: • Increase Program Participation, Reduce Unnecessary Sanctions and Case Closings for Non-compliance. – Implement a pilot project to allow up to 5 days of excused absences for illness without documentation based on the new local paid sick leave law. – Implement a pilot project to provide pre-conciliation outreach to avert unnecessary case closings and sanctions consistent with the state law requirement to excuse non-compliance upon a showing of good cause and, in the absence of good cause, the state law requirement that HRA must then show that the non-compliance was willful. Human Resources Administration Department of Social Services 035 23 ENHANCE PROGRAM PARTICIPATION & DISPUTE RESOLUTION – Implement a grace period for failure to report (extended to 72 hours from 24 hours). – Develop a data system to prevent HRA from scheduling appointments that conflict with other known work activities and/or appointments, including court proceedings and related service appointments and appointments at other agencies. – Implement a system of automated appointment reminders and the ability for clients to reschedule eligibility related appointments. • Improve the conciliation, good cause, and dispute resolution procedures. – Develop a standard question set to be used by conciliation workers (centralized and out-stationed) to guide workers in their decision making concerning good cause & willfulness as required by state law. – Provide an informational brochure about the conciliation process for clients in order to avert adverse case actions. Human Resources Administration Department of Social Services 036 24 UPDATE ON REFORMS ALREADY IMPLEMENTED Goal: Improve Access to Benefits • Accepted the federal waiver from work requirements for Able-bodied Adults without Dependents (ABAWD), allowing them to receive Supplemental Nutrition Assistance Program (SNAP) benefits, which had already been done by all other New York counties and 43 other states. • Automatically updating the address on file with the Medicaid program whenever a client reports an address change to the SNAP program. • Eliminated the requirement that sponsors of legal immigrants repay costs of assistance for those they have sponsored. Human Resources Administration Department of Social Services 037 25 REFORMS ALREADY IMPLEMENTED Goal: Improve Access to Benefits • Created Certified Application Counselor function (CAC) within HRA to help New Yorkers navigate the new State Health Care Exchange. • Conducted an outreach program with the Benefits Data Trust organization and funded by the Robin Hood Foundation to identify eligible seniors who are receiving Medicaid or heat assistance, but are not in receipt of SNAP and encourage them to apply. Human Resources Administration Department of Social Services 038 26 REFORMS ALREADY IMPLEMENTED Goal: Improve Access to Benefits • Deployed Client Service Supervisors to designated Job Centers and SNAP Centers to provide information, connect clients to appropriate units and services, and assist clients with special needs such as a disability or limited English proficiency. • Implemented an Electronic Document Submission (EDS) process that allows SNAP clients to scan their documents into a file which is later transferred into their case records by a worker. This process eliminates the long wait times often associated with in-person document submission. This process will be further enhanced through the implementation of a new system known as “Easy Access” which will allow clients to scan the documents directly into their case records rather than to a file which must be manually transferred to the case record by a worker. Human Resources Administration Department of Social Services 039 27 REFORMS ALREADY IMPLEMENTED Goal: Improve Access to Benefits • Created new outreach teams at the 15 NYCHA developments identified in the Mayor’s Action Plan for Neighborhood Safety to ensure residents who are eligible for HRA benefits are receiving them. • Created an Office of Advocacy with a special focus on ensuring increased access for New Yorkers who are Limited English Proficient (LEP), those with disabilities, immigrants and the LGBTQ community. • Enhanced Intranet Quorum (IQ) as a case management system for complaints at HRA’s call center and other program areas to provide clients with a reference number for their complaints and ensure a follow up. • Hired a new Director of Immigrant Eligibility Training. • Created a new process for immigrant clients to receive acceptable USCIS fee waiver documentation directly in an HRA center. Human Resources Administration Department of Social Services 040 28 REFORMS ALREADY IMPLEMENTED Goal: Reduce Homelessness • Worked with NYCHA to implement a new process for NYCHA to accept HRA's certification that a family in an HRA or DHS shelter is a domestic violence survivor for priority housing. • Established a Centralized Rent Processing Unit to expedite issuance of rent arrears checks to avoid evictions and address post-eviction cases to enable clients to regain possession of their apartments. • Implemented a system to enable Cash Assistance family members to pursue tenancy rights for a NYCHA apartment when the family member on the lease dies by arranging to provide NYCHA with use and occupancy payments while a hearing is conducted. • Implemented new system to ensure the payment of rent arrears for vulnerable clients, such as formerly homeless families at high risk of shelter entry. Human Resources Administration Department of Social Services 041 29 REFORMS ALREADY IMPLEMENTED Goal: Reduce Homelessness • Expanded anti-eviction prevention services by consolidating from other agencies a number of contracts with legal services providers for anti-eviction and civil legal services, with additional base-lined funding for anti-eviction contracts. • Expeditiously implemented the new 30% rent cap for eligible HASA clients and issued reimbursement checks for the April-June period to more than 7,000 households. • Working with DHS, developed and implemented the new LINC rental assistance programs. Human Resources Administration Department of Social Services 042 30 REFORMS ALREADY IMPLEMENTED Goal: Eliminate Unnecessary Negative Outcomes for Clients • Increased timing of child care return appointments to 15 days so clients have time to find appropriate, reliable child care that will support their work activities. • Closed the Intensive Services Center program (Center 71), which led to unnecessary case sanctions and closings. • Making reminder calls for eligibility appointments for SNAP and Cash Assistance to reduce missed appointments. • Making missed appointment calls for SNAP and Cash Assistance eligibility appointments with a rescheduling option to reduce negative case actions. Human Resources Administration Department of Social Services 043 31 REFORMS ALREADY IMPLEMENTED Goal: Eliminate Unnecessary Negative Outcomes for Clients • Stopped additional engagement call-ins of clients who request a Fair Hearing with Aid to Continue (ATC) for an engagement-related infraction to avoid multiple infractions and hearings. • Piloted five excused absences for clients in work programs, based on the City’s five paid sick days law. • Developed new procedures for compliance with the required case conciliation process to avert negative case outcomes, for example, when there is “good cause” for missing an appointment or other requirement and the infraction was not willful. Human Resources Administration Department of Social Services 044 32 REFORMS ALREADY IMPLEMENTED Goal: Eliminate Unnecessary Negative Outcomes for Clients • Modified the “partial” domestic violence waiver procedure, and now provide a full waiver from Cash Assistance requirements that put survivors at risk. • Extended the domestic violence waiver from work requirements from 4 months to 6 months, reducing client appointments to 2 per year rather than 3, and reducing workload and risk of a client missing an appointment. Human Resources Administration Department of Social Services 045 33 REFORMS ALREADY IMPLEMENTED Goal: Eliminate Unnecessary Negative Outcomes for Clients • Scheduling child support enforcement appointments 20 days from date of application to give clients additional time to reschedule preexisting appointments. Clients had been required to complete the appointment within 7 days of application. • Implemented new processes to resolve fair hearing requests prior to the hearing, when appropriate, to reduce unnecessary agency workload and provide quicker resolution of issues for clients. Human Resources Administration Department of Social Services 046 34 REFORMS ALREADY IMPLEMENTED Goal: Improve Access and Outcomes for Education and Training • Allow clients to pursue four year college degrees, as provided in the new state law, if they meet work activity requirements and maintain the required grade average. Human Resources Administration Department of Social Services 047 35 NOTICE OF ADOPTION OF RULE Pursuant to the power vested in me as Commissioner of the New York City Human Resources Administration (“HRA”) by sections 34, 56, 61, 62, 77, and 131 of the New York Social Services Law, sections 603 and 1043 of the New York City Charter, and sections 352.3(a)(3) and 352.6 of Title 18 of the New York Codes, Rules and Regulations, I hereby adopt the following rule to be added as Chapter 7 of Title 68 of the Official Compilation of the Rules of the City of New York. A previous version of this rule was issued as an emergency rule on September 5, 2014, and a proposed permanent rule was published on October 24, 2014. A public hearing was held on November 24, 2014 and all public comments have been reviewed and considered. Dated: _December 1, 2014 _ New York, New York ________/s/________________ Steven Banks Commissioner NYC Human Resources Administration 1 048 Statement of Basis and Purpose of Rule In order to implement the Mayor’s priority of moving families from shelter into stable housing, and in a joint effort with the Commissioner of the New York City Department of Homeless Services (DHS), the Commissioner of the New York City Human Resources Administration (HRA) is promulgating this rule to add Chapter 7 to Title 68 of the Rules of the City of New York to continue implementation of three new rental assistance programs targeted to specific populations within the City’s homeless shelter system. These three rental assistance programs, which were established by an emergency rule issued on September 5, 2014, are collectively referred to as the Living in Communities or “LINC” Rental Assistance Programs. The purpose of these programs is to assist low-income working families, vulnerable families, and families whose lives have been affected by domestic violence move out of shelter into stable housing, and to assist those families to remain stably housed in their communities. The LINC I and LINC II programs are joint programs of the City of New York and the State of New York. The LINC III program is a City of New York program. HRA and DHS submitted plans concerning the LINC I and LINC II programs to the New York State Office of Temporary and Disability Assistance (OTDA) for approval in accordance with Section 352.3(a)(3) of Title 18 of the New York Codes, Rules and Regulations. The plans were so approved by OTDA on August 1, 2014. Because HRA is not seeking State reimbursement for the LINC III program, a plan was not submitted to OTDA for its approval. The urgent need for these programs is established by census data from DHS establishing that the number of families in the DHS shelter system is at a record high. Census data also demonstrates the urgent need for a rental assistance program targeted to families whose lives have recently been affected by domestic violence. As of June 2014, there were 1,099 families, including 1,917 children, in HRA’s domestic violence shelters. Due to a lack of housing resources, nearly 100 families had to enter the DHS shelter system between May and July of 2014 because they had reached the maximum length of stay of 180 days in a domestic violence shelter under State regulation and had no other housing options. As of July 2014, over 1,000 families in the DHS shelter system were survivors of domestic violence certified by HRA. Subject to an annual review of available funding, the LINC Rental Assistance Programs will consist of three programs: LINC I, LINC II, and LINC III. In the first year of the program: LINC I will assist approximately 1,101 families in shelter who are working full-time but are unable to afford stable housing on their own to relocate from the City shelter system; LINC II will assist approximately 970 families in shelter who are identified within vulnerable populations and who need additional assistance and supports to relocate from the City shelter system and become securely housed in the community; and LINC III will provide rental assistance for up to 1,900 families recently affected by domestic violence to relocate them from the City shelter system, approximately 900 families in HRA domestic violence shelters and approximately 1,000 families in DHS shelters who HRA has certified as survivors of domestic violence. In all three programs, priority has been and will continue to be given to families who have been in shelter the longest. 2 049 The rule sets forth definitions applicable to the chapter (Section 7-01); a general description of responsibility for program administration and eligibility determinations (Section 7-02); programspecific eligibility, certification, and renewal requirements (Sections 7-03, 7-04, and 7-05); a description of how monthly program participant contributions and the monthly rental assistance amounts are calculated (Section 7-06); review and appeal procedures (Sections 7-07 and 7-08); and additional provisions, including a description of certain program benefits as well as requirements for program participants and participating landlords (Section 7-09). The rule has been revised to clarify the definition of unearned income, remove references to emergency assistance to conform the rule with the plans approved by OTDA, clarify citations to applicable State regulations, and remove the description of the effect of LINC assistance on the calculation of Supplemental Nutrition Assistance Program benefits because such calculation is governed by State law and accompanying regulations. In addition, in response to a public comment, the rule was revised to describe HRA’s process related to reviewing eligibility requirements at the time of renewal and assisting households with maintaining eligibility at such time as appropriate. HRA’s authority for this rule may be found in sections 34, 56, 61, 62, 77, and 131 of the New York Social Services Law, sections 603 and 1043 of the New York City Charter, and sections 352.3(a)(3) and 352.6 of Title 18 of the New York Codes, Rules and Regulations. New text is underlined. “Shall” and “must” denote mandatory requirements and may be used interchangeably in the rules of this department, unless otherwise specified or unless the context clearly indicates otherwise. Section 1. Title 68 of the Rules of the City of New York is amended by adding a new chapter 7 to read as follows: Chapter 7: The Living in Communities (LINC) Rental Assistance Programs § 7-01 Definitions. For the purposes of this chapter, unless otherwise specified, the following terms shall have the following meanings: (a) The “LINC Rental Assistance Programs” means collectively the LINC I, LINC II and LINC III rental assistance programs described in this chapter. (b) The “City shelter system” means DHS Shelters and HRA Shelters. (c) “DHS” means the New York City Department of Homeless Services. (d) A “DHS Shelter” means a shelter for families with children operated by or on behalf of DHS. (e) “Earned income” is defined and computed as set forth in Section 352.17 of Title 18 of the New York Codes, Rules and Regulations, except that it does not include income earned through subsidized employment. (f) “Gross income” means the sum of earned income and unearned income. 3 050 (g) The “household” means all individuals collectively intended to reside and/or residing together in the place of residence obtained pursuant to this chapter, regardless of their eligibility for Public Assistance. (h) “HRA” means the New York City Human Resources Administration. (i) An “HRA Shelter” means a domestic violence shelter operated by or on behalf of HRA pursuant to Part 452 of Title 18 of the New York Codes, Rules and Regulations. (j) “Public Assistance” means benefits, including monthly grants and shelter allowances, issued under the Family Assistance program pursuant to New York Social Services Law § 349 and/or the Safety Net Assistance program pursuant to New York Social Services Law § 159, and regulations promulgated thereunder. (k) A “program participant” means an individual who has entered into a lease for housing to which LINC rental assistance payments have been or are being applied. (l) “Unearned income” is defined and computed as set forth in Section 387.10 of Title 18 of the New York Codes, Rules and Regulations, except that it shall only include such income that is regularly recurring. (m) “Subsidized employment” means subsidized private sector employment or subsidized public sector employment as those terms are used in New York Social Services Law § 336(1)(b)-(c). (n) “Unsubsidized employment” means unsubsidized employment as that term is used in New York Social Services Law § 336(1)(a). § 7-02 Administration of the LINC I, LINC II, and LINC III Programs. HRA shall administer the LINC Rental Assistance Programs and shall make eligibility determinations in accordance with this chapter, except that initial eligibility determinations for current shelter residents pursuant to subparagraph (C) of paragraph (1) of subdivision (a) of section 7-03 or 7-04 of this chapter, or paragraph (3) of subdivision (a) of section 7-05 of this chapter, are made by HRA’s Family Independence Administration in consultation with DHS’s Division of Policy and Planning and Division of Family Services. § 7-03 The LINC I Rental Assistance Program. (a) Initial Eligibility and Certification for the LINC I Program. (1) To be eligible for an initial year of LINC I rental assistance, a household must meet the following eligibility requirements at the time of certification: (A) The household must include at least one member who is in receipt of Public Assistance, and all household members who are eligible for Public Assistance must be in receipt of such benefits; (B) The household must include a child who meets the criteria set forth in Section 369.2(c) of Title 18 of the New York Codes, Rules and Regulations; (C) The household must include at least one member who: (i) is eligible for shelter as determined by DHS pursuant to Parts 351 and 352 of Title 18 of the New York Codes, Rules and Regulations or as determined by HRA pursuant to 4 051 Sections 452.2(g) and 452.9 of Title 18 of the New York Codes, Rules and Regulations; and (ii) currently resides in the City shelter system; (D) The household member described in subparagraph (C) of paragraph (1) of this subdivision must have resided in the City shelter system for at least ninety consecutive days prior to certification, excluding gaps of up to three calendar days; (E) The household must include at least one member who is working and any such member or members must be collectively working at least thirty-five hours per week in unsubsidized employment; (F) The household must demonstrate earned income for at least ninety days prior to certification; and (G) The household must have total gross income that does not exceed 200 percent of the federal poverty level as established annually by the U.S. Department of Health and Human Services. (2) The number of eligible households that can be certified to receive LINC I rental assistance will be limited by the amount of available funding. Subject to HRA’s exercise of discretion under subdivision (a) of section 7-09 of this chapter, upon finding that a household has met the eligibility requirements set forth in paragraph (1) of this subdivision and that appropriate funding is available to provide LINC I rental assistance to such household, HRA and/or DHS shall issue such household a certification letter. The letter will include an expiration date and will be conditioned on the household continuing to meet the requirements of subparagraphs (A), (B), (C), (E), and (G) of paragraph (1) of this subdivision up to the time when the lease for the housing to which LINC I rental assistance will be applied is executed. Priority will be given to families whose current stays in the City shelter system are the longest. (3) At the time of certification, HRA will calculate the household’s monthly program participant contribution and the maximum monthly rental assistance amount pursuant to subdivision (a) of section 7-06 of this chapter. The monthly program participant contribution and monthly rental assistance amount will not change during the first year of the program, regardless of changes in household composition or income. (b) Renewals after the First Year. (1) Subject to the availability of funding, a household in receipt of LINC I rental assistance will receive two one-year renewals of such assistance if it meets the following continued eligibility requirements: (A) At least one member of the household must be working, and the household’s working member or members must be collectively working at least thirty-five hours per week in unsubsidized employment; (B) The household’s total gross income must not exceed 200 percent of the federal poverty level as established annually by the U.S. Department of Health and Human Services; (C) At least one member of the household must be continually engaged in enhanced employment and social service supports developed in conjunction with a case manager or employment vendor designated by DHS or HRA intended to maintain or enhance the household’s employment; and 5 052 (D) The household must provide prompt notice to HRA of any rent arrears that have accrued so that they may be addressed. (2) Subject to the availability of funding, households that meet the continued eligibility requirements set forth in paragraph (1) of this subdivision may receive up to two additional one-year extensions after their third year in the LINC I rental assistance program pursuant to a determination by HRA on a case-by-case basis. (3) HRA will determine a household’s eligibility for renewal of LINC I rental assistance at the end of each year of the household’s participation in the program, subject to the availability of funding. Prior to the commencement of each one-year renewal period, HRA will recalculate the household’s monthly program participant contribution and the monthly rental assistance amount pursuant to subdivision (a) of section 7-06 of this chapter. The monthly program participant contribution and monthly rental assistance amount will not change during the one-year renewal period, regardless of changes in household composition or income. § 7-04 The LINC II Rental Assistance Program. (a) Initial Eligibility and Certification for the LINC II Program. (1) To be eligible for an initial year of LINC II rental assistance, a household must meet the following eligibility requirements at the time of certification: (A) The household must include at least one member who is in receipt of Public Assistance, and all household members who are eligible for Public Assistance must be in receipt of such benefits; (B) The household must include a child who meets the criteria set forth in Section 369.2(c) of Title 18 of the New York Codes, Rules and Regulations; (C) The household must include at least one member who: (i) is eligible for shelter as determined by DHS pursuant to Parts 351 and 352 of Title 18 of the New York Codes, Rules and Regulations or as determined by HRA pursuant to Sections 452.2(g) and 452.9 of Title 18 of the New York Codes, Rules and Regulations; and (ii) currently resides in the City shelter system; (D) The household member described in subparagraph (C) of paragraph (1) of this subdivision must have resided in the City shelter system for at least ninety consecutive days prior to certification, excluding gaps of up to three calendar days; (E) The household must include at least one member who has experienced two or more prior stays in the City shelter system of thirty days or more within five years of the first day of the current shelter stay; (F) The household must have some income, earned or unearned; and (G) HRA must have determined that the household will be eligible for Public Assistance upon exit from shelter. (2) The number of eligible households that will be certified to receive LINC II rental assistance will be limited by the amount of available funding. Subject to HRA’s exercise of discretion under subdivision (a) of section 7-09 of this chapter, upon finding that a household has met the eligibility requirements set forth in paragraph (1) of this 6 053 subdivision and that appropriate funding is available to provide LINC II rental assistance to such household, HRA and/or DHS shall issue such household a certification letter. The letter will include an expiration date and will be conditioned on the household continuing to meet the requirements of subparagraphs (A), (B), (C), (F), and (G) of paragraph (1) of this subdivision up to the time when the lease for the housing to which LINC II rental assistance will be applied is executed. Priority will be given to families whose current stays in the City shelter system are the longest and among those, further priority may be given to families who are receiving social services from multiple government agencies or who have a member who is in receipt of disability benefits and/or who is an employable adult. (3) At the time of certification, HRA will calculate the household’s monthly program participant contribution and the maximum monthly rental assistance amount pursuant to subdivision (a) of section 7-06 of this chapter. The monthly program participant contribution and monthly rental assistance amount will not change during the first year of the program, regardless of changes in household composition or income. (b) Renewals after the First Year. (1) Subject to the availability of funding, a household in receipt of LINC II rental assistance will receive four one-year renewals of such assistance if it meets the following continued eligibility requirements: (A) At least one member of the household must be continually engaged in ongoing case management activities designed to assist the household member in obtaining, maintaining and/or enhancing employment or to secure any benefits for which such member or household is eligible; (B) All members eligible for Public Assistance must be in receipt of Public Assistance; (C) Members of the household receiving Public Assistance must be in compliance with any applicable requirements related to the receipt of such Public Assistance; (D) The household’s total gross income must not exceed 200 percent of the federal poverty level as established annually by the U.S. Department of Health and Human Services; and (E) The household must provide prompt notice to HRA of any rent arrears that have accrued so that they may be addressed. (2) HRA will determine a household’s eligibility for renewal of LINC II rental assistance at the end of each year of the household’s participation in the program, subject to the availability of funding. Prior to the commencement of each one-year renewal period, HRA will recalculate the household’s monthly program participant contribution and the monthly rental assistance amount pursuant to subdivision (a) of section 7-06 of this chapter. The monthly program participant contribution and monthly rental assistance amount will not change during the one-year renewal period, regardless of changes in household composition or income. Prior to the commencement of the renewal period, HRA will review whether a household is meeting all of the eligibility requirements set forth in paragraph (1) of this subdivision and will assist the household with maintaining eligibility as appropriate. 7 054 § 7-05 The LINC III Rental Assistance Program. (a) Initial and Continued Eligibility and Certification for the LINC III Program. (1) To be eligible for the LINC III Program, a household must meet the following eligibility requirements: (A) The household must be in receipt of Public Assistance; (B) The household must include a child who meets the criteria set forth in Section 369.2(c) of Title 18 of the New York Codes, Rules and Regulations; (C) The household must, at the time of certification and up to the time when the lease for the housing to which LINC III rental assistance will be applied is executed, include at least one member who: (i) (A) resides in a DHS shelter and is eligible for shelter as determined by DHS pursuant to Parts 351 and 352 of Title 18 of the New York Codes, Rules and Regulations, or (B) resides in an HRA shelter; and (ii) is currently eligible for HRA shelter under Section 452.9 of Title 18 of the New York Codes, Rules and Regulations as a victim of domestic violence within the meaning of Section 452.2(g) of Title 18 of the New York Codes, Rules and Regulations and Section 459-a of the New York Social Services Law; and (D) The household must, at the time of certification and up to the time of lease signing, be in compliance with Public Assistance requirements. (2) The number of eligible households that will be certified to receive LINC III rental assistance will be limited by the amount of available funding. Subject to HRA’s exercise of discretion under subdivision (a) of section 7-09 of this chapter, upon finding that a household has met the eligibility requirements set forth in paragraph (1) of this subdivision and that appropriate funding is available to provide LINC III rental assistance to such household, HRA and/or DHS shall issue such household a certification letter. The letter will include an expiration date and will be conditioned on the household continuing to meet the requirements of paragraph (1) of this subdivision. Priority will be given to families who have resided in a DHS Shelter or an HRA Shelter for the longest consecutive periods, families currently residing in an HRA Shelter who have reached the 180-day time limit under New York Social Services Law § 459-b and would otherwise be discharged to a DHS Shelter, and families who are currently residing in a DHS Shelter due to lack of capacity in HRA Shelters or who have been discharged from an HRA Shelter to a DHS Shelter. (3) At the time of certification, and prior to lease signing, HRA will calculate, pursuant to subdivision (b) of section 7-06 of this chapter, the household’s maximum monthly rent amount, the maximum monthly LINC III rental assistance amount and any contributions required to be made by household members not eligible for Public Assistance. The LINC III rental assistance amount and the amounts of any required contributions are subject to change during the household’s participation in the LINC III program as set forth in paragraph (8) of subdivision (b) of section 7-06 of this chapter. 8 055 (4) A household’s continued receipt of LINC III rental assistance is conditioned on the household continuing to meet the requirements of subparagraphs (A) and (B) of paragraph (1) of this subdivision. (5) In no event shall HRA certify for LINC III rental assistance a household that includes the perpetrator of the domestic violence that resulted in the determination of eligibility for HRA shelter described in subparagraph (C) of paragraph (1) of subdivision (a) of this section. (b) Renewals after the First Year. (1) Subject to the availability of funding, a household in receipt of LINC III rental assistance will receive up to four one-year renewals of such assistance if it meets the following continued eligibility requirements: (A) The household must be in receipt of Public Assistance; (B) The household must include a child who meets the criteria set forth in Section 369.2(c) of Title 18 of the New York Codes, Rules and Regulations; (C) Where such activities are made available to the household, at least one member of the household must be participating in ongoing case management activities developed in conjunction with a case manager or employment vendor designated by DHS or HRA designed to assist the household member in obtaining, maintaining and/or enhancing employment or to secure any benefits for which such member or household is eligible; (D) Members of the household receiving Public Assistance must be in compliance with any applicable requirements related to the receipt of such Public Assistance; (E) The household’s total gross income must not exceed 200 percent of the federal poverty level as established annually by the U.S. Department of Health and Human Services; and (F) The household must provide prompt notice to HRA of any rent arrears that have accrued so that they may be addressed. (2) HRA will determine a household’s eligibility for renewal of LINC III rental assistance at the end of each year of the household’s participation in the program, subject to the availability of funding. Prior to the commencement of each one-year renewal period, HRA will recalculate, pursuant to subdivision (b) of section 7-06 of this chapter, the household’s maximum monthly rent amount, the maximum monthly rental assistance amount and any contributions required to be made by household members not eligible for Public Assistance. This recalculation is in addition to any recalculations required by paragraph (8) of subdivision (b) of section 7-06 of this chapter. Prior to the commencement of the renewal period, HRA will review whether a household is meeting all of the eligibility requirements set forth in paragraph (1) of this subdivision and will assist the household with maintaining eligibility as appropriate. § 7-06 Maximum Rents and Calculation of Monthly Program Participant Contributions and Rental Assistance Amounts. (a) LINC I and LINC II Rental Assistance Programs. 9 056 (1) The maximum rent towards which rental assistance may be applied during the first year of any lease towards which LINC I or LINC II rental assistance is applied shall not exceed the amounts set forth in the table below, except that HRA may make exceptions on a case-by-case basis if the rent: (i) is reasonable in relation to current rents for comparable units in the private unassisted market; (ii) is not in excess of current rents for the owner’s comparable non-luxury unassisted units; and (iii) does not exceed the 2014 New York City Housing Authority Section 8 Voucher Payment Standards for the same type of unit. If HRA makes such an exception, HRA shall pay the difference between the approved rent and the maximum rent amount set forth in the table below. Household Size 2 3 4 5 6 7 8 Maximum Rent $1,028 $1,200 $1,257 $1,428 $1,542 $1,599 $1,714 (2) A program participant contribution of thirty percent of the household’s total gross income at the time of certification will be required and will be paid by the household directly to the landlord each month. The program participant contribution will be deducted from the maximum rent amount set forth in the table in paragraph (1) of this subdivision to determine the monthly rental assistance amount. HRA shall pay the monthly rental assistance amount directly to the landlord each month for so long as the program participant’s household remains eligible and funding for the program remains available. In addition to the program participant contribution, the program participant shall be responsible for any increases in the rent permitted under paragraph (2) of subdivision (m) of section 7-09 of this chapter. (b) LINC III Rental Assistance Program. (1) Except as provided below, the maximum LINC III rental assistance amount and the maximum rent towards which LINC III rental assistance may be applied shall not exceed the amounts set forth in the table below, except that HRA may make exceptions to the maximum rent amounts on a case-by-case basis if the rent: (i) is reasonable in relation to current rents for comparable units in the private unassisted market; (ii) is not in excess of current rents for the owner’s comparable non-luxury unassisted units; and (iii) does not exceed the 2014 New York City Housing Authority Section 8 Voucher Payment Standards for the same type of unit. If HRA makes such an exception, HRA shall pay the difference between the approved rent and the maximum rent amount set forth in the table below. Household Size 1 2 3 Maximum Rent $914 $1,028 $1,200 $1,257 $1,428 $1,542 $1,599 $1,714 $745 $800 $1,018 $1,053 $1,168 Maximum Rental $637 Assistance 4 $807 5 $927 6 7 8 (2) Except as provided in paragraph (4) of this subdivision, and provided the household remains eligible for LINC III rental assistance, the LINC III rental assistance amount shall be the household’s actual rent less the sum of (A) any contributions required to be made 10 057 in accordance with the provisions of paragraph (6) of this subdivision and (B) the standard Public Assistance shelter allowance as set forth in Section 352.3(a)(1) of Title 18 of the New York Codes, Rules and Regulations for the number of members in the household active for Public Assistance, provided that the LINC III rental assistance amount shall not exceed the maximum rental assistance amount for the household size as set forth in paragraph (1) of this subdivision. If the actual rent exceeds the sum of the LINC III rental assistance amount and the standard shelter allowance, the household shall pay directly to the landlord the amount that the actual rent exceeds such sum. (3) If a household in receipt of LINC III rental assistance receives a Public Assistance shelter allowance less than the standard Public Assistance shelter allowance set forth in Section 352.3(a)(1) of Title 18 of the New York Codes, Rules and Regulations, the household shall pay directly to the landlord the difference between the standard Public Assistance shelter amount and the Public Assistance shelter amount that the household receives. (4) If the household’s Public Assistance shelter allowance is reduced pursuant to New York Social Services Law § 342, the LINC III rental assistance amount will be reduced using the same rule applied to reduce the Public Assistance benefits. The household shall pay any reduction amounts directly to the landlord. (5) If a household is in receipt of the LINC III rental assistance amount and such household’s monthly rent obligation increases above the 2014 New York City Housing Authority Section 8 Voucher Payment Standards for the same type of unit after the household’s second year in the LINC III rental assistance program, the household shall pay the amount of the rent increase directly to the landlord. In the event of such a rent increase, HRA may make exceptions to the maximum rental assistance amount on a case-by-case basis. (6) A member of the household who is not in receipt of Public Assistance and who receives income, earned or unearned, must contribute a pro rata share of the rent or thirty percent of his or her gross income, whichever is less, towards rent. If a member of the household is not currently in receipt of Public Assistance, but does not acknowledge receipt of income, earned or unearned, such household member must apply for Public Assistance before the household can be certified for LINC III rental assistance. If such household member is rejected as ineligible, such household member shall be subject to the program participant contribution requirement set forth in this subdivision. Nothing in this paragraph shall be construed to require a person ineligible for Public Assistance on the basis of his or her immigration status to apply for Public Assistance. An individual contributing a pro rata share of rent or thirty percent of his or her gross income shall not be counted for purposes of determining the LINC III maximum rental assistance amount as set forth in paragraph (1) of this subdivision but may be counted for purposes of determining the maximum rent as set forth in such paragraph, provided that the maximum rent shall not exceed the sum of the maximum rent for the household when such person is not counted and such person’s required contribution. Such individual's contribution shall be deducted from the household's actual rent for the purposes of determining the LINC III rental assistance amount as set forth in paragraph (2) of this subdivision. (7) When an individual ineligible for Public Assistance on the basis of his or her immigration status has income that must be taken into consideration in calculating Public Assistance pursuant to New York Social Services Law § 131-a, such individual shall be included in the household for purposes of determining the maximum rent as set forth in 11 058 paragraph (1) of this subdivision. Such individual shall not be included in the household for purposes of determining the maximum rental assistance amount as set forth in paragraph (1) of this subdivision and will not be subject to the program participant contribution requirement as set forth in paragraph (6) of this subdivision. (8) A LINC III rental assistance amount and any contributions required by paragraph (6) of this subdivision shall be increased or reduced as a result of changes in a household’s income, composition, or rent, provided that such increased or decreased rental assistance amount and contributions are calculated in accordance with the provisions of this subdivision. LINC III recipients shall promptly inform HRA of changes in income, household composition, or rent that may require an increase or decrease in the LINC III rental assistance amount and/or any required contributions. LINC III recipients will receive a notice from the City of New York of any change in their LINC III rental assistance amount and required contributions. § 7-07 Right of Review. (a) Challenges by Shelter Residents in Receipt of a LINC II Certification Letter and by LINC II Program Participants Regarding LINC II Rental Assistance. Shelter residents who have received a LINC II certification letter and LINC II program participants shall have the right to seek review pursuant to Part 358 of Title 18 of the New York Code, Rules and Regulations of all determinations and actions made by DHS and/or HRA pursuant to section 7-04 of this chapter. (b) All Other Challenges. All other challenges to determinations or actions made by DHS and/or HRA under this chapter, as well as any failures to act, or failures to act with reasonable promptness, by DHS and/or HRA in implementing the provisions of this chapter, shall be governed by the procedures set forth in section 7-08 of this chapter. § 7-08 Agency Review Conference and HRA Administrative Appeal Process. (a) Right to HRA Administrative Review. A shelter resident or LINC I or LINC III program participant may request an agency review conference and/or an HRA administrative hearing to seek review of any determinations or actions for which a right to review is provided under subdivision (b) of section 7-07 of this chapter. (b) Agency Review Conference. (1) If a shelter resident or LINC I or LINC III program participant requests an agency review conference, HRA shall informally review and attempt to resolve the issues raised. (2) A shelter resident or LINC I or LINC III program participant may request an agency review conference without also requesting an HRA administrative hearing. Requesting an agency review conference will not prevent a shelter resident or program participant from later requesting an HRA administrative hearing. 12 059 (3) Except as provided in paragraph (4) of this subdivision, an agency review conference must be requested within sixty days after the challenged determination or action, provided further that if an HRA administrative hearing is scheduled, an agency review conference must be requested reasonably in advance of the scheduled hearing date. (4) Notwithstanding paragraph (3) of this subdivision, an agency review conference to review a failure by DHS and/or HRA to issue a certification letter pursuant to section 703, 7-04 or 7-05 of this chapter may be brought at any time if such household has not received such letter. (5) A request for an agency review conference will extend the time period to request an HRA administrative hearing as set forth in paragraph (2) of subdivision (c) of this section to sixty days after the date of the agency review conference. (c) Request for an HRA Administrative Hearing. (1) An administrative hearing must be requested in writing. Such written request must be submitted by mail, electronic means or facsimile, or other means as HRA may set forth in an appeals notice. (2) Except as provided in paragraph (3) of this subdivision and paragraph (5) of subdivision (b) of this section, a request for an administrative hearing must be made within sixty days after the challenged determination or action. (3) A request for an administrative hearing to challenge a failure by DHS and/or HRA to issue a certification letter under section 7-03, 7-04 or 7-05 of this chapter may be brought at any time if such household has not received such letter. (d) Authorized Representative. (1) Except where impracticable to execute a written authorization, a person or organization seeking to represent a shelter resident or LINC I or LINC III program participant must have the shelter resident’s or program participant’s written authorization to represent him or her at an agency review conference or administrative hearing and to review his or her case record, provided that such written authorization is not required from an attorney retained by such shelter resident or program participant. An employee of such attorney will be considered an authorized representative if such employee presents written authorization from the attorney or if such attorney advises HRA by telephone of such employee's authorization. (2) Once HRA has been notified that a person or organization has been authorized to represent a shelter resident or LINC I or LINC III program participant at an agency review conference or administrative hearing, such representative will receive copies of all correspondence sent by HRA to the shelter resident or program participant relating to the conference and hearing. (e) Aid Continuing. (1) If a LINC I or LINC III program participant requests an administrative appeal of a determination by HRA that rental assistance payments issued under section 7-03 or 7-05 of this chapter are to be reduced, restricted, suspended or discontinued, or that the program participant’s household is not eligible for renewal pursuant to subdivision (b) of section 7-03 or subdivision (b) of section 7-05 of this chapter, such 13 060 program participant shall have the right to continued receipt of LINC I or LINC III rental assistance payments at the rental assistance amount in effect at the time of the determination until the hearing decision is issued pursuant to subdivision (l) of this section, provided that: (A) The program participant requests the administrative appeal within ten days of the mailing of the notice of such determination; and (B) The appeal is based on a claim of incorrect computation or an incorrect factual determination. (2) There is no right to continued rental assistance payments pursuant to this subdivision where the sole issue on appeal is one of local, State or Federal law or policy, or change in local, State or Federal law. (3) Rental assistance payments will not continue pending the issuance of a hearing decision when: (A) The LINC I or LINC III program participant has voluntarily waived his or her right to the continuation of such assistance in writing; or (B) The LINC I or LINC III program participant does not appear at the administrative hearing and does not have a good reason for not appearing. (4) If a LINC I or LINC III program participant requests an additional appeal pursuant to subdivision (m) of this section, rental assistance payments will continue uninterrupted after issuance of the hearing decision until a written decision is issued pursuant to subdivision (l) of this section. (f) Notice. HRA shall provide the shelter resident or LINC I or LINC III program participant with notice of the date, time, and location of the administrative hearing no fewer than seven calendar days prior to the scheduled date of the administrative hearing, unless the issue underlying the request for an administrative hearing has been resolved and the shelter resident or program participant has withdrawn his or her hearing request. (g) Examination of Case Record. The shelter resident or LINC I or LINC III program participant or his or her authorized representative has the right to examine the contents of his or her LINC program case file and all documents and records that HRA intends to use at the administrative hearing. Upon request by telephone or in writing, HRA shall provide such shelter resident or program participant with copies of all such documents, and copies of any additional documents in the possession of HRA and/or DHS that the shelter resident or program participant identifies and requests for purposes of preparing for the administrative hearing. HRA shall provide such documents at no charge reasonably in advance of the administrative hearing. If the request for such documents is made less than five business days before the administrative hearing, HRA must provide the shelter resident or program participant with copies of such documents no later than at the time of the administrative hearing. 14 061 (h) Adjournment. The administrative hearing may be adjourned for good cause by the administrative hearing officer on his or her own motion or at the request of the shelter resident or LINC I or LINC III program participant, HRA, or DHS. (i) Conduct of Administrative Hearing. (1) The administrative hearing shall be conducted by an impartial hearing officer appointed by HRA who shall have the power to administer oaths and issue subpoenas and who shall have no prior personal knowledge of the facts concerning the challenged determination or action. (2) The administrative hearing shall be informal, all relevant and material evidence shall be admissible and the legal rules of evidence shall not apply. The administrative hearing shall be confined to the factual and legal issues raised regarding the specific determination(s) for which the administrative hearing was requested. (3) The shelter resident or LINC I or LINC III program participant shall have a right to be represented by counsel or other representative, to testify, to produce witnesses to testify, to offer documentary evidence, to offer evidence in opposition to the evidence presented by HRA and DHS, to request that the hearing officer issue subpoenas, and to examine any documents offered by HRA and DHS. (4) An audio recording, an audio visual recording or written transcript of the administrative hearing shall be made. (j) Abandonment of Request for Administrative Hearing. (1) HRA will consider an administrative hearing request abandoned if neither the shelter resident or LINC I or LINC III program participant nor his or her authorized representative appears at the administrative hearing, unless either the shelter resident or program participant or his or her authorized representative has: (A) contacted HRA prior to the administrative hearing to request rescheduling of the administrative hearing; or (B) within fifteen calendar days of the scheduled administrative hearing date, contacted HRA and provided a good cause reason for failing to appear at the administrative hearing on the scheduled date. (2) HRA will restore the case to the calendar if the shelter resident or LINC I or LINC III program participant or his or her authorized representative has met the requirements of paragraph (1) of this subdivision. (k) Hearing Record. The recording or written transcript of the hearing, all papers and requests filed in connection with the hearing, and the hearing decision collectively constitute the complete and exclusive record of the administrative hearing. 15 062 (l) Hearing Decision. (1) The hearing officer shall render a decision based exclusively on the hearing record. The decision must be in writing and must set forth the administrative hearing issues, the relevant facts, and the applicable law, regulations and approved policy, if any, upon which the decision is based. The decision must identify the issues to be determined, make findings of fact, state the reasons for the determinations, and when appropriate, direct HRA to take specific action. (2) A copy of the decision, accompanied by written notice to the shelter resident or LINC I or LINC III program participant of the right to further appeal and the procedures for requesting such appeal, will be sent to each of the parties and to their authorized representatives, if any. (m) Additional Appeal. (1) An appeal from a decision of a hearing officer may be made in writing to the Commissioner of HRA or his or her designee provided it is received by HRA through the procedures described in the notice accompanying the hearing decision within at least five business days after the delivery of the hearing officer’s decision. The record before the Commissioner shall consist of the hearing record, the hearing officer’s decision and any affidavits, documentary evidence, or written arguments that the shelter resident or LINC I or LINC III program participant may wish to submit. (2) The Commissioner or his or her designee shall render a written decision based on the hearing record and any additional documents submitted by the shelter resident or LINC I or LINC III program participant and HRA or DHS. (3) A copy of the decision, accompanied by written notice to the shelter resident or LINC I or LINC III program participant of the right to judicial review, will be sent to each of the parties and to their authorized representatives, if any. (4) Upon issuance, the decision of the Commissioner or his or her designee made pursuant to an appeal under this section is final and binding upon HRA and must be complied with by HRA. § 7-09 Additional Provisions. (a) If a household is eligible for two or more LINC programs, HRA and DHS reserve the right to determine, based on administrative and programmatic needs, which LINC program the household will be certified for. HRA and DHS also reserve the right to determine the schedule for release of available funding for each of the LINC programs based on administrative and programmatic needs. (b) HRA and DHS will refer households in the LINC Rental Assistance Programs to service providers who will assist them with connecting to appropriate services in their communities. (c) HRA and DHS will evaluate available resources under the United States Department of Housing and Urban Development’s Homelessness Prevention and Rapid Re-Housing Program and will utilize these as an alternative to longer term rental assistance, if applicable, prior to determining any household’s eligibility for LINC I and LINC II rental assistance. 16 063 (d) HRA shall provide a household moving from shelter moving expenses, a security deposit voucher equal to one month’s rent and, if applicable, a broker’s fee equal to up to one month’s rent, as set forth in Section 352.6 of Title 18 of the New York Codes, Rules and Regulations. (e) Rental assistance provided under any of the LINC Rental Assistance Programs cannot be combined with any other rent subsidies other than a Public Assistance shelter allowance provided pursuant to Section 352.3 of Title 18 of the New York Codes, Rules and Regulations. (f) Households in receipt of rental assistance under the LINC Rental Assistance Programs that are unable to make their program participant contributions on account of involuntary job loss or other extenuating circumstances may be eligible for emergency rent assistance and arrears under Section 352.7of Title 18 of the New York Codes, Rules and Regulations. (g) HRA and DHS will not maintain waitlists for the LINC Rental Assistance Programs. (h) Shelter residents are responsible for identifying potential housing. However, shelter staff may provide assistance to shelter residents in their housing search. (i) A landlord who signs a lease with a household in receipt of rental assistance under any of the LINC Rental Assistance Programs is prohibited from demanding, requesting, or receiving any amount above the rent or fees as stipulated in the lease agreement regardless of any changes in household composition. A landlord who demands, requests or receives any amount above what is set forth in the lease will be barred from further participation in any HRA rental assistance programs and may be barred from other rental assistance programs administered by the City of New York. Before placing a landlord on a disqualification list, HRA will provide notice to the landlord and an opportunity for the landlord to object in writing. (j) If a program participant leaves the apartment for which the program participant is receiving LINC I, LINC II, or LINC III rental assistance due to an eviction or move, the landlord must return any over-payment. (k) Any residence to which LINC rental assistance is applied must pass a City inspection. Section 8 Housing Quality Standards set forth in Section 982.401 of Title 24 of the Code of Federal Regulations will be applied in the inspection process with respect to the physical condition of apartments. The number of persons who can occupy a particular apartment will be evaluated on a case-by-case basis with each household. (l) As a condition of participating in the LINC Rental Assistance Programs landlords shall be required to: (1) renew a participating household’s lease for a second year at the same monthly rent as provided for in the first year provided that (a) funding for the applicable LINC Rental Assistance Program remains available, and the household has been found eligible by the City for a second year of the program, or (b) the household is able to pay its entire rent for a second year; and (2) after the second, third and fourth years, renew a participating household’s lease at the same total monthly rent provided for as in the previous year, increased by a percentage no greater than that allowed at that time for one-year leases for rentstabilized apartments in New York City, regardless of whether the housing is subject to rent stabilization, provided that: (a) funding for the applicable program remains available and the participating household has been found eligible by the City for the applicable year of the program, or (b) the participating household is able to pay its entire rent for the applicable year. 17 064 National N Em mployment Law Project Decembeer 2014 City Miinimum m Wage Laws: Recent Tre ends and EEconomic Evidence o on Local M Minimum W Wages More than fo our years afte er the Great R Recession, job b growth conttinues to imp prove steadilyy across the co ountry yet remains d disproportion nately concen ntrated in low w‐paying indusstries.1 The u unbalanced economic reco overy, compounded d by continued congressional gridlock o over raising thhe federal min nimum wage, has prompted a record numb ber of municip pal leaders to o tackle this problem locallly with city minimum wagee ordinances that substantially raise the wagge floor for lo ow‐paid workkers in their coommunities. Equally signiificant, cities today are calling for higher minimum wages tthan ever beffore. With w age levels of up to $15 per hour, thesee new measures go beyond simp ply catching th he minimum wage up for inflation and begin to raise pay broadlyy across of local econo omies. the bottom o This policy brrief provides an overview o of recent tren nds in local m minimum wagge ordinances, paying partiicular attention to how businessses have adjusted to the im mplementatioon of local waage increasess over time. O Overall, the economic evidence indicates that local minimum m wages havee proven to b be effective to ools for raisin ng pay and improvin ng job quality without redu ucing employyment or encoouraging busiinesses to leaave cities. Fig 1. Local M Minimum Wa age Ordinance es in the U.S.. Passed in 2003 Minimu um Wage Passsed in 2014 (ccont’d) Minimum W Wage Santa Fe, NM M San Francisco o, CA Passed in 2012 Albuquerque e, NM San Jose, CA Passed in 2013 Bernalillo County, NM Washington, DC Montgomeryy County, MD Prince Georgge's County, MD $10.66 $10.74 Minimu um Wage $8.60 $10.15 Minimu um Wage $8.50 $11.50 ((by 2016) $11.50 ((by 2017) $11.50 ((by 2017) Chiccago, IL Sann Francisco, CA A Seaattle, WA Currrent Proposalss Wa shington, DC Los Angeles, CA – Mayor Los Angeles, CA – City Council New w York, NY Porrtland, ME Louuisville, KY $13.00 (by 2 2019) $15.00 (by 2 2018) $15.00 (by 2 2018‐21) Proposed Raate $15.00 (by 2 2019) $13.25 (by 2 2017) $15.25 (by 2 2019) $13.13 (by 2 2016) $10.68 (by 2 2017) $10.10 (by 2 2017) SeaTac, WA $15.00 Passed in 2014 Minimu um Wage Las Cruces, N NM $10.10 Santa Fe Cou unty, NM $10.66 Mountain Vie ew, CA $10.30 ((by 2015) Sunnyvale, CA $10.30 ((by 2015) San Diego, CA A $11.50 ((by 2017)* Oakland, CA $12.25 ((by 2015) Berkeley, CA $12.53 ((by 2016) Richmond, CA A $13.00 ((by 2018) *San Diego in ncrease awaitss review by votters in 2016 Locaal Minimum W Wages Have B Become Main nstream Policcy Tools in Diiverse Cities A Across the Co ountry Overr the past yeaar, an unpreceedented num mber of citiess and countiees have moveed to adopt hiigher locall minimum w wages. In addiition, cities arre propposing substantially higherr wage levels than in past years (see Fig 1). Indicatiive of this new w wave of acction around local minimu um wages wass the U.S. Conference o of Mayors’ “C Cities of Oppo ortunity ugust of 2014,, which endorsed Taskk Force” in Au high er city minim mum wages ass key tools forr fighting inco me inequalityy at the local level.2 75 7 Maiden Lane, Suite 601 , New York, N NY 10038 ▪ 2 212-285-3025 5 ▪ www.nelp.o org 065 The Distinct Role of Local Minimum W Wages Local minimu um wages offer several disstinct advantages that differentiate these policies from state or federal minimum wage laws, including: minimum 1. Allowing higher‐cost ccities to set m wage rates that better correspond to higher local livin ng costs; 2. Allowing localities in sstates where the legislaturre is slow to rraise the miniimum wage to addresss the problem on their ow wn; 3. Providingg avenues forr demonstratiing the feasibilityy of substantially higher m minimum wages, and pursuing kkey reforms ssuch as annual in nflation indexxing and highe er tipped minimum m wages, whicch are less co ommonly adopted at the state level. How Have Bu usinesses Ressponded to R Recently Adopted Cityy Minimum W Wages? “In San Jose, H Higher Minimu um Wage Payss Benefits,” – USA Today, Ju une 14, 2014 “Interviews w with San Jose workers, businesses, and industry officcials show it h has improved the lives of affected emp ployees while imposing min nimal costs on employerss.”3 “No CCalamity Yet aas SeaTac, WA, Adjusts to $1 15 Mini mum Wage” –– Washington Post, Sept. 5, 2 2014 “Thoose who oppoosed the $15 w wage in SeaTTac and Seatttle admit theere has been n no calamity so o far.”5 “$155 Wage Floor SSlowly Takes Hold in SeaTac”” – Seatttle Times, Junee 13, 2014 “For r all the politiccal uproar it ccaused, SeaTa ac’s closeely watched eexperiment w with a $15 min nimum wag e has not created a large cchain reaction of lost jobs and higher pprices…”6 Sma ll Businessess Favor Citywide Minimum m Wages to M osts of Livingg Match Local Co As m more cities consider local m minimum wagges, opinnion research has begun to o examine thee views of em mployers on ssuch measurees. Polling an nd interrviews with in ndividual business ownerss have oyers find thaat the statew show wn that emplo wide mini mum wage iss often insufficient to refleect local upport cities’’ adopting higgher livingg costs and su locall minimum w wages. Fig 22. Two‐Thirds of New York SSmall Businesss Own ners Support LLocal Minimum m Wages7 Q: Do you aggree or disagree that cities and counties in N New York should d have the abilitty to determine th heir own minimu um wage rates above the levvel of the state minimum wagee? “What Happened to Fast‐Fo ood Workers W When San Jose Raised the Minimum Wage?? Hold the Layoffs” – Wall Street Journall, April 9, 2014 4 Agrree “Fast‐food hiiring in the reegion accelera ated once thee higher wage was in place.. By early thiss year, the pace of emplloyment gainss in the San Jo ose area beat the improvement in tthe entire sta ate of California.”4 34% Disaagree 66% Sourcce: Small Busin ness Majority, 2014 066 2 The Economic Evidence Shows That City Minimum Wages Boost Earnings Without Reducing Employment The economic evidence regarding the higher city minimum wages that have been enacted in U.S. cities to date indicates that they have boosted earnings without evidence of slowed job growth or business relocations. These findings are consistent with the bulk of modern research on higher state minimum wages, which has generally found no statistically significant evidence of job losses resulting from minimum wage increases passed over the last twenty years in the United States. In part this is because the bulk of the low‐wage positions affected by city minimum wages are in fields such as restaurants, retail, building services, home health care and child care – jobs that serve city‐based customers such as residents, office workers and tourists at city locations. As a result, most cannot practically be moved by their employers to locations outside of the city while still retaining their customer bases. Figure 3 below summarizes the most rigorous research examining the employment impact of minimum wage increases at the local level. The studies below pay particular attention to the experience of minimum wage increases in Santa Fe and San Francisco, which have had local minimum wages in place for over a decade now and offer the most complete picture of how businesses in low‐wage sectors have adjusted to higher wage floors. Figure 3: Summary of Economic Research on Citywide Minimum Wages Study Year Published "The Wage and Employment Impact of Minimum‐Wage Laws in Three Cities”8 Center for Economic and Policy Research “When Mandates Work: Raising Labor Standards at the Local Level”10 University of California‐Berkeley 2011 2014 Cities Studied San Francisco, CA Santa Fe, NM Washington, DC9 San Francisco, CA Summary of Findings “The results for fast food, food services, retail, and low‐wage establishments ... support the view that citywide minimum wages can raise the earnings of low‐wage workers, without a discernible impact on their employment…” This book‐length study of San Francisco’s minimum wage, living wage, health care and paid sick leave laws, which collectively raised the compensation of low‐wage workers 80 percent higher than the federal minimum wage, found that these laws raised pay without costing jobs. Researchers found that from 2004 to 2011, private sector employment grew by 5.6 percent in San Francisco, but fell by 4.4 percent in other Bay Area, California counties that did not have a higher local wage. Among food‐service workers, who are more likely to be affected by minimum‐wage laws, employment grew 17.7 percent in San Francisco, faster than in the other Bay Area 067 3 counties. San Francisco employers absorbed the higher costs through a combination of reduced employee turnover and improved customer service and worker productivity. “The Economic Effects of a Citywide Minimum Wage”11 University of California‐Berkeley “Measuring the Employment Impacts of the Living Wage Ordinance in Santa Fe, New Mexico”12 University of New Mexico, Bureau of Business and Economic Research “Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties” University of California‐Berkeley, University of Massachusetts‐ Amherst, and University of North Carolina‐Chapel Hill13 2007 San Francisco, CA 2006 Santa Fe, NM 2010 288 pairs of contiguous U.S. counties with differing minimum wage rates at any point between 1990 and 2006 “We find that the San Francisco wage floor policy increased pay significantly at affected restaurants…. We do not detect any increased rate of business closure or employment loss among treated restaurants; this finding is robust across a variety of alternative specifications and control subsamples.” “Overall, this analysis found that the living wage had no discernible impact on employment per firm, and that Santa Fe actually did better than Albuquerque in terms of employment changes.” Taking advantage of the fact that a record number of states raised their minimum wages between in the 1990s and 2000s, this widely cited study compares employment levels among every pair of neighboring U.S. counties that had differing minimum wage rates at any point between 1990 and 2006 and finds that higher minimum wages did not reduce employment. This is a particularly important finding regarding the impact of higher minimum wages at the local level, as the county‐ level analysis found no evidence of businesses crossing borders or reducing employment in response to higher minimum wages. 068 4 1 “An Unbalanced Recovery: Real Wage and Job Growth Trends,” National Employment Law Project, Data Brief, August 2014, available here: http://www.nelp.org/page/‐/Reports/Unbalanced‐Recovery‐Real‐Wage‐Job‐Growth‐Trends‐August‐ 2014.pdf?nocdn=1 2 “Cities of Opportunity Task Force Commitment to Action,” U.S. Conference of Mayors, August 2014, availabe at: http://www1.nyc.gov/office‐of‐the‐mayor/news/397‐14/cities‐opportunity‐task‐force‐commitment‐action#/0 3 “In San Jose, Higher Minimum Wage Pays Benefits, “ Paul Davidson, USA Today, June 14, 2014, available at: http://www.usatoday.com/story/money/business/2014/06/14/minimum‐wage‐san‐jose/9968679/ 4 “What Happened to Fast‐Food Workers When San Jose Raised the Minimum Wage? Hold the Layoffs” Eric Morath, Wall Street Journal, April 9, 2014, available at: http://blogs.wsj.com/economics/2014/04/09/what‐happened‐to‐fast‐food‐ workers‐when‐san‐jose‐raised‐the‐minimum‐wage/ 5 No Calamity Yet as SeaTac, WA, Adjusts to $15 Minimum Wage,” Dana Milbank, Washington Post, September 5, 2014, availalable at: http://www.washingtonpost.com/opinions/dana‐milbank‐no‐calamity‐yet‐as‐seatac‐wash‐adjusts‐to‐15‐ minimum‐wage/2014/09/05/d12ba922‐3503‐11e4‐9e92‐0899b306bbea_story.html 6 “$15 Wage Slowly Takes Hold in SeaTac,” Amy Martinez, Seattle Times, June 3, 2014, available at: http://seattletimes.com/html/localnews/2022905775_seatacprop1xml.html 7 “New York Small Businesses Support Higher Minimum Wages for Cities and Counties,” Small Business Majority, Opinion Poll, April 2014, available at: http://www.smallbusinessmajority.org/small‐business‐research/downloads/042114‐New‐ York‐Minimum‐Wage‐Poll.pdf 8 John Schmitt, Why Does the Minimum Wage Have No Discernable Impact on Employment? (February 2013), Center for Economic and Policy Research, available at http://www.cepr.net/documents/publications/min‐wage‐2013‐02.pdf. 9 Study finds that the minimum wage increase implemented in Washington, DC, in 1993 was too small to raise wages in fast‐food, food services, retail, and other low‐wage establishments. The citywide increase therefore does not allow the authors to draw conclusions about the employment effects of citywide minimum wages for DC. 10 Michael Reich, Ken Jacobs and Miranda Dietz (eds.), When Mandates Work: Raising Labor Standards at the Local Level, University of California Press (2014), available at http://irle.berkeley.edu/publications/when‐mandates‐work/; “San Francisco’s Higher Minimum Wage Hasn't Hurt the Economy,” Business Week (January 22, 2014), available at http://www.businessweek.com/articles/2014‐01‐22/san‐franciscos‐higher‐minimum‐wage‐hasnt‐hurt‐the‐economy; “S.F. praised as model for U.S. on increasing minimum wage,” SF Gate (January 28, 2014), available at http://www.sfgate.com/politics/article/S‐F‐praised‐as‐model‐for‐U‐S‐on‐increasing‐5183378.php 11 Michael Reich, Arindrajit Dube, and Suresh Naidu, “The Economic Effects of a Citywide Minimum Wage,” University of California‐Berkeley, (2007), available at: http://www.irle.berkeley.edu/cwed/wp/economicimpacts_07.pdf 12 University of New Mexico, Bureau of Business and Economic Research, “Measuring the Employment Impacts of the Living Wage Ordinance in Santa Fe, New Mexico,” (June 30, 2006), available at: http://bber.unm.edu/pubs/EmploymentLivingWageAnalysis.pdf 13 Michael Reich, Arindrajit Dube, and T. William Lester, “Minimum Wage Effects Across State Borders,” Review of Economics and Statistics (2010): 945‐964, available at: http://www.irle.berkeley.edu/workingpapers/157‐07.pdf 069 5 DATA BRIEF | FEBRUARY 2015 Giving Caregivers a Raise: The Impact of a $15 Wage Floor in the Home Care Industry Introduction Thousands of home care workers have taken to the streets Stabilizing the home care system through higher wages in recent months, adding their voices to the growing call and better conditions is not only fair; it eases worker for a $15 hourly wage and a union. Home care workers, reliance on public benefits and allows recipients of home who provide critical in-home support to older adults and care services to stay in their homes and out of more costly people with disabilities, make a compelling case for a institutional care. And when low-wage workers like home higher wage standard. Like the fast-food industry where care workers experience a wage hike, they spend most the campaign for $15 originated, home care is growing at of that increase on basic necessities like food, housing, a rapid rate but remains marred by poverty-level wages. and clothing, contributing to their local economies and Low wages have profound implications beyond the work- spurring economic growth. A $15 wage for home care ers and their families, driving alarmingly high turnover workers is the right thing to do—for the workers and their and burnout, jeopardizing critical services, and straining communities, for the people they care for, and for our the home care system just as more and more Americans economy. come to rely on its services. America’s fastest-growing job pays poverty wages The home care workforce encompasses workers in two main occupations: home health aides and personal care aides. Both assist older adults or people with disabilities Figure 1. Projected growth in employment, 2012 to 2022 at their homes with personal care (assistance with eating, dressing, bathing, and toileting) and household services All US Employment 10.7% (meal preparation, shopping, light cleaning, and transportation). In some states, home health aides may administer medication or check a client’s vital signs under the Home Health Aides 48.5% Personal Care Aides 48.8% direction of a nurse or other healthcare practitioner. The number of home care jobs in the United States is projected to grow five times faster than jobs in all other occupations. According to the Bureau of Labor Statistics, the country will need one million new home care workers by 2022.1 0% 10% 20% 30% 40% 50% 60% Source: Bureau of Labor Statistics, Employment Projections, available at http://data.bls.gov/projections/occupationProj While demand for home care workers is projected to grow, wages in this sector remain low. In 2013, the country’s two million home care workers had average annual earnings of $18,598.2 Average annual earnings for all wage and salary workers in the United States were $46,440. 3 070 NELP | NATIONAL EMPLOYMENT LAW PROJECT | 75 MAIDEN LANE, SUITE 601 | NEW YORK, NY 10038 | TEL: 212-285-3025 | WWW.NELP.ORG Home care wages have been declining Revenues in the home health industry have grown 48 per- Meanwhile, executive compensation in the home care cent over the past 10 years. In contrast, when adjusted industry has been growing rapidly. CEO compensation at for inflation, average hourly wages for home care workers the four publicly traded national home healthcare chains, 4 have declined by nearly 6 percent since 2004. At this adjusted for inflation, has increased over 150 percent rate, home care workers’ earnings will be worth less than since 2004.7 Home care workers' wages would have had $18,000 (in 2013 dollars) when this workforce reaches its to keep pace with this growth to even approach middle- predicted growth to nearly three million in 2022.6 class yearly earnings of $49,000. 5 Almost half of all home care workers rely on public assistance A significant number of home care workers rely on public live in households that receive public assistance benefits assistance because their earnings are not enough to make such as Medicaid, food stamps, and housing and heating ends meet. Among home care workers, nearly 50 percent assistance. Table 1: Enrollment and Costs of Public Support Programs for Home Care Workers Program Number of workers with families enrolled Percent of workers with families enrolled Average program costs per enrolled family Total cost across the five programs (millions)* EITC 731,000 42% $2,660 $1,915 Medicaid (adults) 274,000 16% $7,490 $1,980 Medicaid/CHIP (children) 337,000 19% $4,290 $1,412 Food Stamps 370,000 21% $2,520 $914 TANF 35,000 2% $3,130 $106 All Programs 839,000 48% $7,740 $6,313 * Since many families have more than one worker per family, column (4) will not equal (1)x(3) Note: All costs presented in 2011 dollars. Source: University of California, Berkeley Labor Center calculations from 2008-2012 March CPS, 2007-2011 ACS, 2011 OES, program administrative data. Raising home care workers’ wages would benefit workers and the economy With the creation of a $15 wage floor, the average home average, for each of the two million home care workers, care worker would receive approximately 50% more in her this would translate to approximately $2,000 in new or his hourly wage rate, an approximate increase of more economic activity, as workers spent their earnings in than $8,000 in yearly earnings. The home care workforce their local communities. Additionally, we estimate that as a whole would see about $16.5 billion in additional this economic activity would create between 29,000 and yearly earnings.8 50,000 jobs outside the home care industry.10 Low-wage workers, such as home care aides and personal Raising wages would benefit a workforce that is primar- care aides, are more likely to spend these extra earnings ily women of color. Eighty-nine percent, or more than 1.7 immediately for basic necessities.9 We estimate that million home care workers, are women. Thirty percent, increased consumer spending from additional earnings or 600,000, are African American, and 16 percent, or in the home care sector would generate new economic 320,000, are Latino.11 activity of between $3.9 billion and $6.6 billion. On NELP | DATA BRIEF | FEBRUARY 2015 071 2 Home care workers play a critical role in providing services for our aging population The elderly population is growing at record levels. Every the supply of family caregivers is unlikely to meet the day, 10,000 baby boomers turn 65. By 2050, the elder projected demand brought on by the aging baby boomer population is expected to more than double, from about population. The report found that in 2010, there were 40 million to 84 million. seven potential caregivers aged 45-64 for every person 12 13 80 years or older. By 2030, the report predicts, this ratio Approximately half of the senior population needs help will drop to 4:1 and again to 3:1 in 2050.15 A decent wage with activities of daily living.14 A recent policy paper by would help stabilize a workforce that currently has high the AARP noted that the majority of long-term services turnover because of low wages and irregular hours.16 and supports are provided by family members but that The home care model is more cost-effective than public institutionalization Home care will be increasingly critical to our long term savings to the state from this shift: “Illinois saves over care system, not only because it is the preferred form $600 million a year in Medicaid costs via the home-care of services for a rapidly expanding number of consum- model instead of more costly public institutionaliza- ers, but also because it is cost-effective. For more than tion.”18 This suggests that home care workers are already a decade, the states have been shifting their long term saving state, local and the federal government around the care spending away from more costly institutional care, country billions of dollars. Improving worker pay will such as nursing homes, and toward home care. Illinois help ease the turnover and recruitment problems that Attorney General Lisa Madigan and U.S. Secretary of have prevented states from rebalancing the long term Labor Thomas Perez recently noted the tremendous cost care system by expanding the use of home care. 17 Conclusion Transitioning the fast-growing home care industry to a Despite repeated attacks on their unions, home care more stable, higher wage staffing model is essential if our workers continue to organize. Tens of thousands of work- nation is to meet the long term needs of both the caregiv- ers in Minnesota and Missouri recently voted to join SEIU ing workforce and our aging population. Fortunately, in and AFSCME, joining hundreds of thousands of home recent years we have seen some of the first steps towards care union members who are fighting for job improve- rebuilding wage and job standards, and paving the way ments and quality services. for a $15 wage. For example, after years of advocacy by worker and consumer advocates, the U.S. Department of The fight for a $15 wage has raised expectations for what Labor in 2013 finalized rules extending federal minimum workers can achieve and has inspired many workers and wage and overtime protections to the workforce, while supporters to join the fight. Since fast-food workers took domestic worker bills of rights have won greater state the streets in New York City in 2012, several cities have wage protections and industry standards in several states proposed or enacted $15 minimum wages.19 and spurred campaigns in others. A $15 wage for the home care industry will ensure that all Several states and cities have recognized that raising home care workers across the country earn a decent wage wages for workers employed in such publicly funded that supports their families and communities and helps programs also saves public funds by easing workers’ reli- stabilize a workforce that growing numbers of Americans ance on public benefits and stemming the tremendous will be counting on to deliver dependable, quality care in financial and human cost of recruiting and retraining the years and decades to come. n what has been a constantly churning workforce. They have passed reforms such as New York’s Wage Parity Act, which raised compensation for Medicaid-funded home care workers to $14 per hour in wages and benefits. NELP | DATA BRIEF | FEBRUARY 2015 072 3 Technical Appendix 1. Estimating the size of the workforce worked in a year (weeks). Pooling data from the 2012 and Employment and wage figures are based on 2013 esti- 2013 March Supplement of Current Population Survey, mates that the Bureau of Labor Statistics (BLS) publishes we included workers age 16 and older, working at least through its Occupational Employment Statistics (OES) 10 hours a week, and 27 weeks per year. We included program. We define home care workers as those work- workers in the Home Health Care Services Industry ers classified under two occupational codes: Personal (NAICS 621610) who reported working in either of two Care Aides (SOC 39-9021) and Home Health Aides (SOC occupational categories: Personal or Home Care Aide and 31-1011). It is important to note that the OES survey Nursing Assistant, Psychiatric Aide or Home Health Aide. does not cover the self-employed, which excludes many Following previous studies, we use this group as a proxy individuals who participate in the workforce as Personal for the home care workforce as a whole.21 We find that Care Aides, and thus likely underestimates the size of the the average number of hours worked in a year is 1806. home care workforce. Multiplying that number with the weighted mean hourly wage yields an average annual wage of $18,597.89. Our 2. Estimating average annual earnings calculations for what home care worker earnings would This study combines data from the Current Population be had they kept pace with growth in executive com- Survey (CPS) and Occupational Employment Statistics pensation assume a constant number of annual hours (OES) in order to estimate annual earnings for home worked based on the above estimate for 2012-2013. care workers. Combining data from the CPS for annual 20 hours worked with OES hourly wage estimates produces a 3. Estimating the economic stimulus impact better estimate of yearly earnings for home care work- Due to the limitations of available wage data for this ers than using either data source alone. This is because workforce, this report makes several assumptions about OES assumes full-time, year-round employment for all the current wages that home care workers earn. We workers when estimating annual earnings. While the CPS assume that all home care workers currently make less provides more precise information on hours and weeks than $15 an hour, and would therefore receive a raise. worked, it has the drawback of grouping the occupation While precise figures are not available, we believe this of Home Health Aide with the higher-earning occupa- to be a fair approximation given the available OES data, tions of Nursing Assistants and Psychiatric Aides. which show that at the 90th percentile, home health aides earn $14.17 an hour, and personal care aides earn $13.34 To estimate average annual earnings, we take the an hour. We also assume that raising the wage floor to weighted average of the OES-published mean hourly $15 dollars would result in all home care workers making wages for workers classified under two occupation codes: exactly $15. Additionally, we assume that the average Home Health Aides and Personal Care Aides. This yields raise for all home health aides would be equivalent to an average hourly wage of $10.30. We then estimate $4.40 (the difference between the 2013 mean hourly wage the average number of hours worked in a year for home and $15). Likewise, we assume that the average raise care workers using CPS microdata that the Center for for all personal care aides would be equivalent to $4.91. Economic and Policy Research (CEPR) makes publicly Table A.1 shows the latest available wage distribution for available, constructing an annual-hours-worked variable home care workers. by combining usual hours a week (uhours) and weeks Table A.1. 2013 Wage Distribution for Home Health Aides and Personal Care Aides Occupation Total Employment Hourly mean 10th percentile 25th percentile 50th percentile 75th percentile 90th percentile Home Health Aides 806,710 $10.60 $8.03 $8.78 $10.10 $11.59 $14.17 Personal Care Aides 1,135,470 $10.09 $7.91 $8.57 $9.67 $11.17 $13.34 Source: May 2013 OES NELP | DATA BRIEF | FEBRUARY 2015 073 4 We construct GDP and job creation macroeconomic We use Zandi’s across-the-board tax cut (0.98) to approxi- models based on models developed by the Economic mate the stimulus effect of costs passed to taxpayers and Policy Institute (EPI). These models adapt standard private-pay consumers, and Zandi’s cut in the corporate fiscal multipliers calculated by Mark Zandi, chief tax rate to approximate the stimulus effect of costs economist of Moody’s Analytics, to estimate additional absorbed by home care companies. In this model, we GDP spending resulting from an increase in earnings assume that private-pay consumers are similar in profile for minimum wage workers. Other studies have used to the average U.S. taxpayer. 22 23 similar methods to estimate economic stimulus effects for workers in particular industries.24 Assuming a 100 percent pass-through in the private-pay market yields a multiplier of 0.235: 1.215 - [(0.25 *0.98) + Following previous models, we use Zandi’s fiscal multi- (0.75 * 0.98)] = 0.235. plier for the Earned Income Tax Credit and Zandi’s fiscal multiplier for the Making Work Pay tax credit for work- Assuming a 0 percent pass-through in the private-pay ing individuals and families provided by the American market yields a multiplier of 0.4: 1.215 – [(0.25 *0.32) + Recovery and Reinvestment Act (ARRA). We average (0.75*0 .98)] = 0.4. these two multipliers to create a proxy for the stimulus effect of redistribution toward low-wage workers. In Our estimates for new job creation are based on the order to account for the effect of higher costs to home Economic Policy Institute’s previous work modeling the care companies and potentially higher costs to taxpay- number of new jobs that are created when GDP increases. ers, we incorporate an offsetting multiplier that is then EPI estimates that for every $133,000 increase in GDP (in subtracted from the low-wage-worker multiplier. Our off- 2013 dollars), one full-time-equivalent job is created.26 setting multiplier differs slightly from previous modeling of minimum-wage-raise multiplier effects in retail and Although official unemployment rates have declined in other industries to account for the fact that the home care recent years, we believe that these fiscal multipliers are industry depends heavily on public funding. About 75 still relevant given that the labor market has not fully percent of the home care services are government-funded recovered to its pre-recession state. Among the strongest through Medicaid, Medicare, and other programs, while measures of labor market health is the percentage of the rest is made up of consumers paying for their own prime-age men (ages of 25 - 54) who are currently work- care (commonly referred to as the private-pay portion ing, also known as the employment-to-population ratio. of the industry).25 We distinguish between the offsetting This measure is about 4 percent lower than it was when effects for these two sections of the industry. As such, the the recession began. The ratio for all prime-age workers logic of our multiplier is the following: is similarly depressed.27 In addition, some economists have recently noted a trend in the US economy towards > Home care worker stimulus multiplier = Low-wage- a long-term deficiency in demand, or “secular stagna- worker fiscal stimulus multiplier (average of EITC/ tion”.28 Accounting for these factors, it is reasonable to Making Work Pay) – [Offset for private-pay portion of assume that generating increased consumer demand will market + Offset for Medicaid portion of market]. continue to generate some level of new employment. Given that the industry varies significantly across states, While we acknowledge the possibility that increasing our model incorporates a range of values (from 0-100 wages could negatively impact employment levels, par- percent) for the portion of the increased wage bill that ticularly in the private-pay sector, previous research has home care companies would absorb. For the government- shown that raising wages actually increases demand for funded portion of the industry, our model assumes that home care services and generates more home care jobs. 100 percent of the wage increase to home care workers is A previous study examined a California county in which passed through to the public in the form of tax increases. wages for home care workers in nearly doubled over a It is important to note that this likely overestimates the four-year period as a result of organizing and advocacy cost to taxpayers and thus underestimates the multiplier efforts. It found that the increase in wages actually lead effect of a raise to home care workers. to a 54 percent increase the number of workers employed NELP | DATA BRIEF | FEBRUARY 2015 074 5 Table A.2. Estimated Impact of a $15 Wage for Home Care Workers on GDP and Job Creation Number of workers 1.9 million Average wage $10.30 Average annual hours 1806 Current total annual earnings $36.1 billion (Annual hours worked × Hourly wage x Number of workers) Total annual earnings with $15 minimum $52.6 billion (Annual hours worked x 15.00) Increase to total annual earnings with $15 minimum $16.5 billion Increase to GDP as a result of increase in wages $3.8 billion to $6.5 billion New jobs created as a result of GDP increase 29,000 to 49,500 Sources: Data on size of workforce and wages are from OES; data on hours are from 2012-2013 CPS March Annual Supplement Note: All findings presented in 2013 dollars. in the home care. As the wage rate rose, the job became To arrive at this list, we used the following criteria: more desirable for people who would otherwise be working in other industries. As such, it became much easier > Major Means-Tested Programs Supporting for consumers to find acceptable providers, which in turn Families and Workers. We limit the study to the largest increased overall demand for home care services and nationwide programs that restrict benefits to families increased accessibility to consumers who had previously with low incomes. Our analysis covers programs used by been underserved. Given labor shortages in home care families with active jobseekers and workers, even when around the country, it is fair to assume that with a $15 the availability of those benefits does not depend on a dollar wage floor, these effects on employment would at family’s working status. We analyze only programs that least be partially replicated in both the private-pay and function as income supplements, omitting job-training, government-funded portions of the industry. However, educational and other programs that indirectly assist without more precise estimates, our study assumes no low-income families. 29 30 change in home care employment directly resulting from the wage increase. In addition, we believe that creating a > Data Availability. An ideal analysis of the hidden subsidy for private-pay consumers (for example, a refund- public cost of low-wage work would piece together data able home care worker tax credit) could help to maintain on a broad range of income support programs, including demand and help consumers to access needed services. child care subsidies and reduced-price school lunches. But our method for linking these costs to a worker’s 4. Estimating levels of public assistance enrollment 31 employment status requires both national-level program Data analysis and modeling for these estimates were enrollments and administrative data, and individual- provided by the University of California Berkeley level survey data on the benefits consumption of work- Labor Center. ers. As a result, our estimates necessarily exclude some federal and many state and local programs for which We focus on four vital public benefits programs that the required data were unavailable, such as state earned account for hundreds of billions in assistance to work- income tax credit programs and local services to the poor. ing families: Health insurance (Medicaid and Children’s Health Insurance Program, or CHIP, coverage), 32 the This report combines data from three sources. First, we Federal Earned Income Tax Credit (EITC), food stamps gathered aggregate government administrative data for (the Supplemental Nutrition Assistance Program, the four public support programs named above for all 50 or SNAP) and basic household income assistance states and Washington, D.C. These data document both (Temporary Assistance for Needy Families, or TANF). NELP | DATA BRIEF | FEBRUARY 2015 075 6 the annual enrollment and the annual benefits paid by we constructed a model that made it possible to inte- each program (please note that we exclude the costs of grate data from a third source, the U.S. Census Bureau’s program administration and oversight). American Community Survey (ACS), which contains a larger sample size than the CPS. The use of the ACS Second, we used the March Supplement of the U.S. allows us to estimate costs for all U.S. workers, for our Bureau of Labor Statistics’ Current Population Survey subset of home care workers and for some states with (CPS) to obtain information on employment, worker large populations. demographics and public benefits usage. Together, these sources allow us to estimate the total amount of public We included workers who reported working in either of benefits paid to different groups of workers. To correct two occupational categories: Personal or Home Care Aide for the well-documented undercount of program enroll- and Nursing Assistant, Psychiatric Aide or Home Health ment in the CPS, we adjust the CPS so that estimated Aide. To be included in the analysis, a worker had to program costs match the administrative program data meet the requirement of working at least 27 weeks and at for each state. 33 least 10 hours per week in a given year. To combine the CPS and administrative data, we selected Additionally, our analysis cannot take into account a multiyear period (2007–2011) that minimized the enrollment in other federal or state programs for which impact of annual fluctuations in program costs and data are not readily available. These programs include enrollment. For the Earned Income Tax Credit and the Child Care Assistance, Women, Infants and Children Supplemental Nutrition Assistance Program, we were Nutrition Program, Free or Reduced Price Lunches, able to pool data for all five years. Because the release of Section 8 Housing, the Low-Income Heat and Energy administrative data for Temporary Assistance for Needy Assistance Program and all state-based programs. Families lags slightly, our data for that program cover the Previous analyses of these programs find that significant shorter 2007–2010 period. The release of Medicaid data shares of their expenditures likewise support low- lags an additional year, limiting our sample to the three- income, working families. 35 This report focuses only on year period 2007–2009. To link program costs to worker the largest federal public assistance programs and covers characteristics, we matched CPS data for the same time a limited segment of the fast-food workforce. Thus, our period to each program. estimates of both program enrollments and costs are conservative, and by definition undercount total Using multiple years allows us to smooth the changes public costs. in enrollment and cost over the course of the recession. During the past decade, each of these programs has expe- A final methodological specification concerns the family rienced changes in funding, enrollment and aggregate basis of public benefits programs. While low earnings is benefits payouts. The 2007–2009 recession and the sub- the basic criterion for program eligibility, public benefits sequent period of slow employment growth increased the do not necessarily go directly to the worker. For example, working population eligible for public assistance. In some some workers have neither public nor private health states policymakers responded to declines in state tax insurance, but enroll their children in the CHIP program. revenues by restricting program eligibility and benefits Other benefits, such as SNAP and EITC, are provided levels. Other states selectively expanded program eligibil- at the family level. Accordingly, our measure of public ity, particularly for Medicaid and CHIP, in response benefits to employed workers covers benefits provided to the widespread loss of jobs and employer-provided to the family as a whole, rather than only those provided health insurance. 34 directly and exclusively to the worker. This process yielded national-level estimates of the hidden public cost of low-wage work. To translate those numbers into public benefits payments at the state level and to develop estimates for the home care industry, NELP | DATA BRIEF | FEBRUARY 2015 076 7 Endnotes 1. Bureau of Labor Statistics, Employment Projections. At: http://data. bls.gov/projections/occupationProj. 2. Data on size of workforce from the Bureau for Labor Statistics’ (BLS) May 2013 Occupational Employment Statistics (OES) survey. Annual earnings are NELP estimates from 2012 and 2013 March Supplement of the Current Population Survey. There is significant variation depending on where home care workers live. Annual earnings for home care workers ranged from $15,100 in West Virginia to almost $25,000 in Alaska. 3. May 2013 OES. 4. BLS Quarterly Service Survey (QSS) and Service Annual Survey (SAS). Growth is calculated after adjusting for inflation using the CPI. 5. To convert nominal wages to real wages, we used the Bureau of Labor Statistics’ Consumer Price Index (CPI-W). 6. May 2004-2013 OES, adjusted for inflation. 7. Standard and Poor Capital IQ database, which compiles Securities and Exchange filings. The four publicly-traded home health companies are include Amedysis, Almost Family, Gentiva, and LHC Group. 8. NELP estimates from May 2013 OES and 2012 and 2013 March Supplement of the Current Population Survey. 9. Aaronson, Daniel and Eric French. 2013. “How does a federal minimum wage hike affect aggregate household spending?” Chicago Fed Letter. Chicago: Federal Reserve Bank of Chicago. 10. See Technical Appendix. 11. PHI. 2011. “Facts 3” New York: PHI. At: http://www.phinational. org/sites/phinational.org/files/clearinghouse/NCDCW%20Fact%20 Sheet-1.pdf 12. Pew Research Center. 2010. “Baby Boomers Retire.” Washington: Pew Research Center. At: http://www.pewresearch.org/dailynumber/baby-boomers-retire/. 13. West, Loraine Samantha Cole, Daniel Goodkind, and Wan He, “65+ in the United States: 2010” 2014. Current Population Reports. Washington: US Census Bureau. At: http://www.census.gov/ content/dam/Census/library/publications/2014/demo/p23-212.pdf 14. Gleckman, Howard. 2014. “Nearly Half of All Seniors Need Help With Daily Activities, Far More Than We Thought,” Forbes. 15. Redfoot, Donald, Lynn Feinberg, and Ari Houser. 2013. “The Aging of the Baby Boom and the Growing Care Gap: A Look at Future Declines in the Availability of Family Caregivers.” Washington: AARP Public Policy Institute. At: http://www.aarp.org/content/ dam/aarp/research/public_policy_institute/ltc/2013/baby-boomand-the-growing-care-gap-insight-AARP-ppi-ltc.pdf 16. Seavey, Dorie. 204. “The Cost of Frontline Turnover in Long-Term Care” New York: PHI. At: http://tinyurl.com/PHI-Seavey2 17. Kassner, Enid, et al., A Balancing Act: State Long Term Care Reform (AARP Public Policy Institute, July 2008), http://assets.aarp.org/ rgcenter/il/2008_10_ltc.pdf 18. U.S. Department of Labor. 2014. “Taking Care of Our Caretakers.” Washington: US DOL. At: http://social.dol.gov/blog/taking-care-ofour-caretakers/ 19. Seattle’s minimum wage will rise to $15 by 2018 and San Francisco’s will rise to $15 by 2018-21. http://www.nelp.org/page/-/rtmw/ City-Minimum-Wage-Laws-Recent-Trends-Economic-Evidence. pdf?nocdn=1 20. Wicks-Lim, Jeannette and Robert Pollin. 2013. “The Costs to FastFood Restaurants of a Minimum Wage Increase to $10.50 per Hour,” Amherst: PERI, University of Massachusetts-Amherst. 21. 22. Bivens, Josh. 2011. “Method Memo on Estimating the Jobs Impact of Various Policy Changes.” Washington: Economic Policy Institute. At: http://www.epi.org/publication/bp251; Hall, Doug and David Cooper. 2012. “How Raising the Federal Minimum Wage Would Help Working Families and Give the Economy a Boost” Washington: Economic Policy Institute. At: http://www.epi.org/ publication/ib341-raising-federal-minimum-wage/. Gable and Douglas Hall. 2012. “The Benefits of Raising Illinois’ Minimum Wage, Economic Policy Institute Issue Brief #321.” At: http://www. epi.org/publication/ib321-illinois-minimum-wage/. 23. Zandi, Mark. 2012. “Written Testimony of Mark Zandi, Chief Economist and Co-Founder, Moody’s Analytics Before the Joint Economic Committee, February 7, 2012.” https://www.economy. com/mark-zandi/documents/2012-02-07-JEC-Payroll-Tax.pdf 24. Ruetschlin, Catherine. 2012. “Retail’s hidden potential: How raising wages would benefit workers, the industry and the overall economy.” http://www.demos.org/sites/default/files/publications/ RetailsHiddenPotential.pdf. New York: Demos. 25. PHI, 2014. “Facts 5: Home Care Aides at a Glance”. New York: PHI. 26. Cooper, David. 2013. “Raising the Federal Minimum Wage to $10.10 Would Lift Wages for Millions and Provide a Modest Economic Boost. Washington: Economic Policy Institute At: http://www.epi. org/publication/raising-federal-minimum-wage-to-1010/ 27. Bureau of Labor Statistics. 2015. Labor force statistics from the Current Population Survey. At: http://data.bls.gov/timeseries/ LNS12300000 28. Summers, Lawrence. (2014) “U.S. Economic Prospects: Secular Stagnation, Hysteresis, and the Zero Lower Bound.” Business Economics, 44 (2):65-73. 29. Howes, Candace. 2002. “The Impact of a large wage increase on the workforce stability of IHSS Home Care Workers in San Francisco County.” Berkeley: UC Berkeley Labor Center. At: http://laborcenter. berkeley.edu/pdf/2002/Howes.pdf 30. Hagerty, James. 2013. “As America Ages, Shortage of Help Hits Nursing Homes.” Wall Street Journal. 31. This section is adapted with permission from Allegretto, Sylvia, Marc Doussard, David Graham-Squire, Ken Jacobs, Dan Thompson and Jeremy Thompson. 2013. “Fast Food, Poverty Wages: The Public Cost of Low-Wage Jobs in the Fast Food Industry.” Berkeley: UC Berkeley Labor Center. Urbana-Champaign: University of Illinois at Urbana-Champaign. 32. Due to potential overlap between Medicaid and Medicare receipt for seniors ages 65 and older, the analysis of Medicaid was limited to benefits provided to individuals age 64 and younger. 33. See Davern, Michael, Jacob Alex Klerman, David K. Baugh, Kathleen Thiede Call and George K. Greenberg. 2009. “An Examination of the Medicaid Undercount in the Current Population Survey: Preliminary Results from Record Linking.” Health Services Research 44 (3): 965-987; Wheaton, Laura. No date. “Under-Reporting of Means-Tested Transfer Programs in the CPS and SIPP.” Washington, D.C.: The Urban Institute. 34. Kaiser Family Foundation. 2009. “A Foundation for Health Reform: Findings of An Annual 50-State Survey of Eligibility Rules, Enrollment and Renewal Procedures and Cost-Sharing Practices in Medicaid and CHIP for Children and Parents During 2009.” At: http://kff.org/medicaid/report/afoundation-for-health-reformfindings-of/. 35. Zabin, Carol, Arindrajit Dube and Ken Jacobs. 2004. “The Hidden Public Cost of Low-Wage Jobs in California.” Berkeley: University of California, Berkeley, Center for Labor Research and Education. PHI, supra note 17. © 2015 National Employment Law Project. This report is covered by the Creative Commons “Attribution-NonCommercial-NoDerivs” license fee (see http://creativecommons.org/licenses). For further inquiries, please contact NELP ([email protected]). NELP | DATA BRIEF | FEBRUARY 2015 077 8 The Growing Movement for $15 Irene Tung, Yannet Lathrop, and Paul Sonn APRIL 2015 078 Contents Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1. Who Makes Less Than $15 per Hour in the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2. A Closer Look at Front-Line Occupations in Six Key Industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Food Services and Drinking Places . . . . . . . . . . . . . . . . 10 Fast Food . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Home Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Auto Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Child Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Hotel/motel Accommodation . . . . . . . . . . . . . . . . . . . . . 19 3. $15 Wage Policies: Economic Research and Case Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Case Study: Johns Hopkins . . . . . . . . . . . . . . . . . . . . . 22 Case Study: Aetna . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Case Study: Seattle . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Case Study: Portland Public Workers . . . . . . . . . . . . . 24 4. Action Recommendations . . . . . . . . . . . . . . . . . . . . . . . 27 Appendix A: Technical Notes . . . . . . . . . . . . . . . . . . . . . . . 28 Appendix B: Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Acknowledgements The authors thank Arun Ivatury, Tsedeye Gebreselassie, Claire McKenna, Norman Eng, Christine Owens, Chris Schwartz, Letasha Irby, Albina Ardon, Dana Wittman, Kendra Littell, and Fatmata Jabbie for their contributions to this report. About NELP For more than 45 years, the National Employment Law Project has worked to restore the promise of economic opportunity for working families across America. In partnership with grassroots and national allies, NELP promotes policies to create good jobs, enforce hard-won workplace rights, and help unemployed workers regain their economic footing. For more information, visit us at www.nelp.org. 079 Executive Summary D uring 2012 and 2013, fast-food workers walked off Walmart, McDonald’s, T.J. Maxx and the Gap, recently their jobs, first in New York and then nationwide, announced pay increases for their lowest-paid work- in what was one of the first mass-scale labor actions in ers. While these increases are modest, their public the United States in most adults’ lifetimes. The workers’ announcement demonstrates the effect of the $15 message was that they simply cannot survive on their movement in highlighting soaring corporate profits on meager paychecks. They called on the nation’s fast-food the one hand, stagnant worker wages on the other, and chains to raise their pay to $15 per hour, and to sit down growing public demand for companies to increase pay. with them as a union to work together to improve their jobs and industry. As the movement for $15 continues to gain momentum, the potential benefits for the U.S. workforce and In the intervening two years, the fight for $15 has economy are significant. This report provides compre- grown from a rallying cry to a diverse movement. Retail hensive wage and demographic figures on the substan- workers for Walmart and other chains, home care and tial swath of the U.S. workforce that today earns less child-care workers, convenience-store and dollar-store than $15 per hour, profiles notable recent victories in workers and others have joined strikes to demand a the $15 movement, and offers action recommendations raise to $15 per hour—just over $31,000 for a full-time for federal, state, and local policymakers and private- employee. sector leaders. The call for a $15 wage has also palpably shifted the In Part 1 of this report, we look at the portion of the U.S. national conversation around income inequality and workforce that currently earns less than $15 per hour in created momentum for much more meaningful action the United States. Our findings include the following: to raise the minimum wage. Over the past two years, the levels of proposed minimum wage increases across the nation have jumped markedly—with major cities now approving up to $15 per hour, and the Democrats • Forty-two (42) percent of U.S. workers make less than $15 per hour. • Women and people of color are overrepresented in Congress and leaders in many states raising their in jobs paying less than a $15 wage. Female workers wage proposals to $12 or $13. account for 54.7 percent of those making less than $15 per hour while making up less than half of the overall The $15 movement is making great strides, as illustrated U.S. workforce (48.3 percent). African Americans by recent public-opinion polling showing strong public make up about 12 percent of the total workforce, support for $12 and $15 minimum wage rates; the wave and they account for 15 percent of the sub-$15-wage of successful policy campaigns raising minimum wages workforce. Similarly, Latinos constitute 16.5 percent at the state and local levels; the recent upsurge of wage- of the workforce, but account for almost 23 percent of increase announcements by low-wage employers; the workers making less than $15 per hour. increase in the number of employers that have modified • More than half of African-American workers and their business plans to include minimum pay of around close to 60 percent of Latino workers make less $15 per hour; and the spread of campaigns calling for than $15. $15 wages. • About half (46.4 percent) of workers making less than $15 per hour are ages 35 and older. Since November 2012, grassroots momentum gener- • Two states—Arkansas and Mississippi—have ated by the $15 movement has helped to push through median wages of less than $15 per hour. Four other dozens of state and local minimum wage policies, states—Tennessee, Montana, Kentucky, and South raising wages for millions of workers.1 In addition, some Dakota—have $15 median wages. of our nation’s biggest low-wage employers, including • Food preparation and serving occupations have 1 NELP | THE GROWING MOVEMENT FOR $15 080 the greatest concentration of workers making • Four out of five workers in both retail and hotel/motel less than a $15 wage. Other occupation groups in accommodation front-line occupations make less which such jobs are concentrated include farming, than $15 per hour. fishing, and forestry; personal care and service; • Automotive manufacturing jobs have long been seen building and grounds cleaning and maintenance; as well paid, but we find that about half of front- healthcare support; sales; and transportation and line automotive manufacturing workers make moving. In these occupations, more than 50 percent below $15. of workers make less than $15 per hour. • Retail salespersons is the largest occupation with median wages of less than $15 per hour, with • Almost 90 percent of people working in home care and child care make less than $15 per hour. • Front-line, low-wage jobs in these industries are at least three million people in the United States predominately filled by women. A majority of making less than a $15 wage in that job. The workers in these occupations—more than 70 percent next-largest occupations in this category are cashiers, of front-line workers in fast food, 74 percent in hotel/ combined food preparation and serving workers, and motel accommodation, and 53 percent in retail—are office clerks. female. • Six out of the ten largest occupations with median wages less $15 also rank among the occupations projected to add the most jobs in coming • Although front-line retail jobs are often seen as jobs held by young people, almost half of workers in these occupations are age 35 or older. years. These are retail salespersons; combined food • Unionization rates are low—ranging from about preparation and serving workers, including fast food; 2 to 10 percent—for front-line workers in these laborers and freight, stock, and material movers, industries, with the exception of auto manufac- hand; janitors and cleaners, except maids and turing, in which more than one in four workers housekeeping cleaners; stock clerks and order fillers; are union. nursing assistants; and personal care aides. • The top industries for sub-$15 work are food ser- In Part 3, we review recent economic research on wage vices and drinking places, private households, floors, profile the experiences of localities and employ- agriculture, personal and laundry services, ers that are transitioning to $15 wages, and give an over- (hotel/motel) accommodation, retail trade, and view of recent and current $15 wage policy campaigns. administrative and support services. In these We find the following: industries, more than 60 percent of workers make less than $15 per hour. • Both the most rigorous research and the actual onthe-ground experiences of localities and employers In Part 2, we take a closer look at the largest front- suggest that pay in the affected jobs can be upgraded line occupations in six industries—restaurants/bars, to $15 without any significant adverse effect on retail, child care, auto manufacturing, home care, and employment. hotels—and find the following: • Seattle, SeaTac, WA and San Francisco have all adopted $15 minimum wages, and campaigns are • Even after accounting for tips, more than four out of underway in at least eight more cities – including Los five (83.8 percent) front-line workers in all food ser- Angeles, Washington, D.C., and New York City – and vice and drinking places make less than a $15 wage. four more states – Oregon, Massachusetts, New York • The overwhelming majority—96 percent—of fast-food workers make less than $15 an hour. 2 and Delaware – to increase minimum wages to at least $15. Private sector employers, such as insurance NELP | THE GROWING MOVEMENT FOR $15 081 giant Aetna, the university-affiliated hospital Johns Hopkins Medicine, and the University of Rochester, have also raised their base pay to approximately $15 per hour. Finally, in Part 4, we offer concrete recommendations for action by federal, state, and local policymakers, and private-sector leaders seeking to continue shifting our economy back toward better-paying jobs. Those recommendations include the following: • Phasing the minimum wage up to $15, as cities such as San Francisco and Seattle have done, with others such as Los Angeles poised to follow. • Adopting $15 minimum wages for key low-wage industries such as fast food, large retail, hotels, caregiving, property services, and airport workers, as several cities have done and states are now beginning to propose. • Issuing executive orders or wage laws raising the minimum wage to $15 for businesses receiving taxpayer-funded contracts or subsidies. • Raising wages for low-paid city, state, or federal employees to $15, as growing numbers of public bodies are doing. • Raising private-sector pay scales to $15, as employers from Aetna to the Johns Hopkins Hospital have done. 3 NELP | THE GROWING MOVEMENT FOR $15 082 1 Who Makes Less Than $15 per Hour in the A United States? $15 hourly wage generates annual earnings of • Food preparation and serving occupations have $31,200 for a full-time, year-round worker. While the greatest concentration of workers making this represents a relatively modest pay rate, our analy- less than a $15 wage. Other occupation groups in sis shows that a sizeable portion of U.S. workers earn which such jobs are concentrated include farming, less than this amount. In this section of the report, we fishing, and forestry; personal care and service; take a look at which U.S. workers make less than $15 building and grounds cleaning and maintenance; per hour and what kinds of jobs they have. We analyze healthcare support; sales; and transportation and data from the Current Population Survey (CPS) and the moving. In these occupations, more than 50 percent Occupational Employment Statistics survey (OES), two of workers make less than $15 per hour. of the main government surveys providing informa- • Retail salespersons is the largest occupation tion on wages, hours, and earnings for U.S. workers (see with median wages of less than $15 per hour, with Technical Appendix for details on data and methods). at least three million people in the United States Our analysis includes both workers who are paid on an making less than a $15 wage in that job. The hourly basis and those paid salaries. For non-hourly next-largest occupations in this category are cashiers, workers, we use an hourly wage variable that is calcu- combined food preparation and serving workers, and lated using reported hours and weeks worked. (In other words, a worker who is paid at an hourly rate of $15 and a office clerks. • Six out of the ten largest occupations with full-time year-round worker who earns an annual salary median wages less $15 also rank among the occu- of $31,200 are understood to have equivalent earnings.) pations projected to add the most jobs in coming Our findings include the following: years. These are retail salespersons; combined food preparation and serving workers, including fast food; • Forty-two (42) percent of U.S. workers make less than $15 per hour. • Women and people of color are overrepresented in jobs paying less than a $15 wage. Female workers laborers and freight, stock, and material movers, hand; janitors and cleaners, except maids and housekeeping cleaners; stock clerks and order fillers; nursing assistants; and personal care aides. account for 54.7 percent of those making less than $15 • The top industries for sub-$15 work are food ser- per hour while making up less than half of the overall vices and drinking places, private households, U.S. workforce (48.3 percent). African Americans agriculture, personal and laundry services, make up about 12 percent of the total workforce, (hotel/motel) accommodation, retail trade, and and they account for 15 percent of the sub-$15-wage administrative and support services. In these workforce. Similarly, Latinos constitute 16.5 percent industries, more than 60 percent of workers make less of the workforce, but account for almost 23 percent of than $15 per hour. workers making less than $15 per hour. • More than half of African-American workers and Demographics close to 60 percent of Latino workers make less Almost half of U.S. workers (42.4 percent) make less than $15. than $15 per hour. Workers within certain demographic • About half (46.4 percent) of workers making less than $15 per hour are ages 35 and older. • Two states—Arkansas and Mississippi—have groups are more likely to be working in this low-wage category than are workers in other groups. As Figure 1.1 shows, more than half of African-American workers and median wages of less than $15 per hour. Four other close to 60 percent of Latino workers make less than states—Tennessee, Montana, Kentucky, and South $15. Dakota—have $15 median wages. 4 NELP | THE GROWING MOVEMENT FOR $15 083 Figure 1.1. Ratio of workers making less than $15 wage within each demographic group All Workers 42.4% Female 48.1% White 36.4% African American 54.1% Latino 59.5% 0% 10% 20% 30% 40% 50% 60% Source: NELP calculations from Current Population Survey Merged Outgoing Rotation Group files 2012-2014. Figure 1.2. & 1.3. Share of workers in U.S. workforce and sub-$15-wage workforce, by demographic group 70% As % of <$15 50% 0% Female African American 10% 28.4% 37.6% 33.8% 25.7% 20.6% 11.8% 10% 16.0% 20% 23.2% 20% 16.5% 30% 15.0% 30% 30.9% 40% 7.3% 40% 46.9% 50% 54.7% 60% 55.4% 64.5% As % of U.S. workers 0% Latino White Age 16-20 Age 22-34 Age 35-49 Age 50-64 Source: NELP calculations from Current Population Survey Merged Outgoing Rotation Group files 2012-2014. Female workers are overrepresented in the sub-$15- White workers make up 65 percent of the workforce and wage workforce, accounting for 55 percent of those 55 percent of workers making less than $15 per hour. making less than $15 per hour while making up 54.1% less than half of the overall U.S. workforce. African The concentration of workers making less than $15 Americans also hold a disproportionate number of differs across states. Table B.1 in Appendix B shows sub-$15-wage jobs. While they make up about 12 percent the share of workers in each state who make less than of the total workforce, they account for 15 percent of the $15 per hour. Arkansas and Mississippi had the largest sub-$15-wage workforce. Similarly, Latinos constitute shares of workers earning less than a $15 wage, each 16.5 percent of the workforce, but account for almost with about half of all workers in this category. 23.2 percent of workers making less than $15 per hour. 5 NELP | THE GROWING MOVEMENT FOR $15 084 this isn’t always the case. Production occupations, for The distribution of workers making less than $15 per hour across occupation and industry example, can vary widely in compensation depending on what is being manufactured. Certain occupations and industries have particularly high concentrations of sub-$15-wage jobs. (An occupation refers to a specific task or set of tasks, while an In what follows, we first look at the distribution of jobs industry refers to the type of firm for which a person paying less than $15 by individual occupations, then by works. A single occupation may be present in a range occupation groups (as classified by the Census), then by of industries. For example, the retail; food and drink- industries. Figure 1.4 ranks individual detailed occupa- ing places; and arts, entertainment and recreation tions with a median wage less than $15 by the number industries all employ cashiers.) While in general, people of people employed in them, while Tables 1,1 and 1.2 working in similar occupations earn similar wages, show the share of sub-$15-wage workers in occupation groups and industries, respectively. Figure 1.4. Largest occupations with median wages less than $15 per hour Number of People Employed Retail Salespersons* 4,562,160 Cashiers 3,398,330 Combined Food Preparation and Serving Workers, Including Fast Food* 3,131,390 Office Clerks, General 2,889,970 Waiters and Waitresses 2,445,230 Laborers and Freight, Stock, and Material Movers, Hand* 2,400,490 Janitors and Cleaners, Except Maids and Housekeeping Cleaners* 2,137,730 Stock Clerks and Order Fillers Nursing Assistants* Personal Care Aides* 1,878,860 1,427,740 1,257,000 Source: NELP calculations from May 2014 OES; 2012 BLS Employment Projections. OES wage measures include tips and commission but not overtime. Asterisk denotes occupations in the top 30 of occupations projected to have the most net growth between 2012-2022. 6 NELP | THE GROWING MOVEMENT FOR $15 085 Representing more than 4.6 million workers, the In Table X, we show groups of occupations ranked by category of retail salespersons tops the list of largest the percentage of workers making less than $15 per occupations with a median wage less than $15; at least hour. Food preparation and serving-related occupations three million people in the United States make less than have the largest share (88.3 percent) of workers earn- a $15 wage in that job (See Table X). The next-largest ing less than a $15 wage. Workers making less than $15 occupations meeting this criterion are cashiers and are also concentrated in farming, fishing, and forestry combined food preparation and serving workers. occupations (83.8 percent), personal care and service Six out of the ten largest occupations with median occupations (77.9 percent), building and grounds clean- wages less $15 also rank among the occupations pro- ing and maintenance occupations (75.2 percent), and jected to add the most jobs by 2022. These are retail healthcare support occupations (72 percent). salespersons; combined food preparation and serving workers, including fast food; laborers and freight, stock, Table X shows the industries ranked by the percentage and material movers, hand; janitors and cleaners, of workers making less than $15 per hour. Food services except maids and housekeeping cleaners; stock clerks and drinking places (85.2 percent), private households and order fillers; nursing assistants; and personal care (80.6 percent), and agriculture (75.3 percent) rank the aides. highest, followed by personal and laundry services (70.7 percent), hotel/motel accommodation (66.6 percent), and retail trade (64.1 percent). Table 1.1. Occupation groups with largest shares of workers earning less than $15 per hour Occupation group % Earning <$15 Median wage 1. Food preparation and serving-related occupations 88.3% $9.00 2. Farming, fishing, and forestry occupations 83.8% $10.00 3. Personal care and service occupations 77.9% $10.35 4. Building and grounds cleaning and maintenance occupations 75.2% $10.80 5. Healthcare support occupations 72.0% $12.00 6. Sales and related occupations 58.1% $12.65 7. Transportation and material moving occupations 54.9% $14.00 8. Production occupations 49.6% $15.00 9. Office and administrative support occupations 49.2% $15.00 Source: NELP calculations from Current Population Survey Merged Outgoing Rotation Group files 2012-2014. 7 NELP | THE GROWING MOVEMENT FOR $15 086 Table 1.2. Industries with the largest shares of workers earning less than $15 per hour Industry % Earning <$15 Median wage 1, Food services and drinking places 85.2% $9.00 2. Private households 80.6% $10.20 3. Agriculture 75.3% $10.20 4. Personal and laundry services 70.7% $11.38 5. Accommodation (Hotels, motels, etc.) 66.6% $11.52 6. Retail trade 64.1% $12.00 7. Administrative and support services 62.0% $12.42 8. Textile, apparel, and leather manufacturing 59.2% $13.00 9. Arts, entertainment, and recreation 59.0% $12.56 10. Social assistance 57.5% $13.26 11. Food manufacturing 55.5% $14.07 12. Rental and leasing services 50.3% $14.91 Source: NELP calculations from Current Population Survey Merged Outgoing Rotation Group files 2012-2014. Notes: All wages reported in 2014 dollars. 8 NELP | THE GROWING MOVEMENT FOR $15 087 2 O A Closer Look at Front-Line Occupations in Six Key Industries ur analysis to this point provides a broad overview • Even after accounting for tips, more than four out of of the distribution of the sub-$15-wage workforce five (83.8 percent) front-line workers in all food ser- in the United States. But in order to gain a more precise understanding of wage levels for specific kinds of vice and drinking places make less than a $15 wage. • The overwhelming majority—96 percent—of workers, we must take a closer look at groups of low- fast-food workers make less than $15 an hour. wage occupations within industries. In what follows, • Likewise, four out of five workers in both retail and we focus on the following six industries: food services and drinking places (including fast food), retail, home care, automotive manufacturing, child care, and hotel/ hotel/motel accommodation front-line occupations make less than $15 per hour. • Automotive manufacturing jobs have long been seen motel accommodation. We identify the largest, non- as well paid, but we find that about half of front- managerial occupations in these industries and define line automotive manufacturing workers make workers in these occupations as “front-line” workers in below $15. these industries. • Almost 90 percent of people working in home care In addition to wages, we look at unionization rates for • Front-line, low-wage jobs in these industries are and child care make less than $15 per hour. front-line workers in these six industries, all of which predominately filled by women. A majority of have seen active union organizing campaigns in recent workers in these occupations—more than 70 percent years. Union membership in the United States reached of front-line workers in fast food, 74 percent in hotel/ its peak in 1954, when 34.8 percent of all U.S. wage motel accommodation, and 53 percent in retail—are and salary workers belonged to unions. As of 2014, female. 2 however, only 11.1 percent of the workforce belonged to • Although front-line retail jobs are often seen as jobs held by young people, almost half of workers unions, down from 20.1 percent in 1983. 3 in these occupations are age 35 or older. For the largest front-line occupations in restaurants/ • Unionization rates are low—ranging from about bars, retail, child care, auto manufacturing, home care, 2 to 10 percent—for front-line workers in all six and hotel/motel accommodation, our findings include industries, with the exception of auto manufac- the following: turing, in which more than one in four workers are union. Figure 2.1. Share of jobs in front-line occupations filled by women, by industry Child Care 93.5% Home Care 91.4% Fast Food 71.1% 74.3% Hotel Retail 52.6% Auto 33.0% 0% 20% 40% 60% 80% 100% Source: NELP calculations from Current Population Survey Merged Outgoing Rotation Group files 2012-2014. 9 NELP | THE GROWING MOVEMENT FOR $15 088 Food services and drinking places tips, overtime, and commission. For restaurant workers, According to the Bureau of Labor Statistics, 10.6 million it is reasonable to assume that these figures primarily people in the United States worked in the food services reflect earnings from tips.) Our findings show that while and drinking places industry in 2014. As we show tips do provide some additional earnings—especially above, this industry has the highest concentration of for wait staff and bartenders—hourly earnings are still workers making less than $15 per hour of any industry. low even for these workers. Seventy-eight percent of The largest non-managerial occupations in food wait staff and 65 percent of bartenders make less than services and drinking places are the following: wait $15 per hour including tips. 4 staff, cooks, cashiers, food preparation workers, other preparation and serving-related workers, bartenders, Fast food hosts, chefs, and dishwashers. Table X shows earnings While wages are low throughout the restaurant indus- figures for these occupations; cashiers are the lowest try, fast-food workers’ wages rank the lowest. Table paid, followed by dishwashers and food preparation 2.2 reports earnings for the following fast-food-related workers. Less than two percent of front-line workers in occupations: cashiers, combined food preparation this industry are unionized. and serving workers, and counter attendants. The overwhelming majority—95 percent—make less than Even when accounting for tips, more than four out of $15 per hour. As a result, many workers rely on public five front-line restaurant workers make less than a $15 assistance to make ends meet. A recent study showed wage. (Available data on tips combine earnings from that more than half of families of front-line fast-food Table 2.1 Hourly earnings and unionization rates for front-line workers in all food service and drinking places, by occupation <$15 <$15 with tips Median wage Median wage with tips Union All front-line occupations 91.6% 83.8% $8.53 $9.31 1.7% Waiters and waitresses 92.5% 77.9% $8.00 $10.00 Cooks 91.2% 88.0% $9.26 $9.56 Cashiers 95.9% 93.7% $8.25 $8.28 Food preparation workers 94.1% 90.4% $9.00 $9.18 Other preparation and serving-related workers 94.8% 88.4% $8.28 $8.80 Bartenders 84.1% 64.7% $8.50 $12.01 Hosts and hostesses, restaurant, lounge, and coffee shop 66.1% 61.5% $12.24 $12.94 Chefs and head cooks 95.4% 89.8% $8.28 $9.00 Dishwashers 94.9% 92.5% $8.67 $8.80 Source: NELP calculations from Current Population Survey Merged Outgoing Rotation Group files 2012-2014. Notes: All wages reported in 2014 dollars. Available data on tips combine earnings from tips, overtime, and commission. The union column refers to the share of workers that are either members of a union or covered by a union contract. 10 NELP | THE GROWING MOVEMENT FOR $15 089 workers are enrolled in public assistance programs; the even more so in fast-food jobs. Seventy-one percent cost of public assistance to families of workers in the of fast-food workers and 53 percent of all front-line fast-food industry is nearly $7 billion a year.5 workers at food service and drinking places are women. Twenty-one percent of fast-food workers and 12 percent As Table 2.2 shows, female workers, workers of color, of all front-line workers at food service and drinking and young workers are highly concentrated in front-line places are African American. occupations at food service and drinking places, and Table 2.2. Hourly earnings and unionization rates for workers in fast food <$15 Median wage Union All front-line occupations 95.9% $8.25 1.7% Cashiers 95.6% $8.25 Combined food preparation and serving workers 96.1% $8.15 Counter attendants 96.9% $8.16 Source: NELP calculations from Current Population Survey Merged Outgoing Rotation Group files 2012-2014. Note: All wages reported in 2014 dollars. Table 2.3. Demographic characteristics of front-line workers in food service and drinking places Female African American Latino White Age 16-21 Age 22-34 Age 35-49 Age 50-64 All food services and drinking places 53.3% 12.0% 27.3% 52.6% 32.2% 40.0% 18.5% 9.2% Fast food 71.1% 21.4% 26.2% 44.7% 54.4% 29.5% 11.0% 5.1% Source: NELP calculations from Current Population Survey Merged Outgoing Rotation Group files 2012-2014. 11 NELP | THE GROWING MOVEMENT FOR $15 090 Worker Profile: Dana Wittman, Subway, Kansas City, Missouri Dana Wittman is a 38-year-old employee of Subway in Kansas City, Missouri. She has been working food preparation jobs for 20 years. Prior to working at Subway, she worked at Pizza Hut. At her current job at Subway, she makes an hourly wage of $8.75, taking home about $720 each month. As a “sandwich artist,” she is responsible for greeting customers, making sandwiches, ringing customers up, and keeping the store clean. In order to makes ends meet, Dana skips meals and relies on payment plans for her rent and utility bills. Wittman says, “Winning $15 and a union would mean I could finally support myself. I would feel like I was actually living my life, not just surviving. My fridge would be fully stocked and I would never have to skip meals.” Wittman has been on strike three times since she joined the $15 movement a year ago. “I got involved because she was tired of living paycheck to paycheck and not being able to pay my bills. I knew if I didn’t stand up and fight, no one was going to do it for me.” “Winning $15 and a union would mean I could support myself. I would feel like I was actually living my life, not just surviving.” Worker Profile: Albina Ardon, McDonald’s, Los Angeles, California Albina Ardon has workplace that have resulted from the $15 move- been working for ment: “Being part of this campaign has changed McDonald’s in Los things at my store in a major way. Before the union, Angeles for nearly 10 we rarely if ever received our 10 minute breaks or our years. As a cashier checks on time. Since we have held actions and gone and a crew member, on strike, we have gotten our breaks and the owner she makes $9.05 has apologized publicly when our checks were late.” per hour. Her hus- After being arrested for civil disobedience as part of band also works at the campaign, Ardon says she felt proud. “It made McDonald’s. They me hopeful for the future. My son and daughter have two children, a five-year-old son and a seven- could see that I can make a difference for their lives year-old daughter. Ardon describes the difficulty and speak up for them.” in covering her expenses with both bread-winners in their family working at McDonald’s: “My checks go toward rent, and [we try to cover] lights, phone, gas, transportation, and food on his checks, [but] it’s hard.” Like many other fast-food workers, they receive public assistance in the form of food stamps “Since we have held actions and gone on strike, we have gotten our breaks and the owner has apologized publicly when our checks were late.” and Medicaid. Ardon highlights the shifts at her 12 NELP | THE GROWING MOVEMENT FOR $15 091 Retail In early 2015, several large retailers such as Walmart, Employing more than 1 in 10 people in the U.S. work- Target, and T.J. Maxx announced their decisions to force, the retail sector plays a vital role in the U.S. raise wages for their workers, with the new base-wage economy ; retail sales rates serve as a closely watched levels ranging between $9 and $10. While these raises indicator of the country’s economic well-being. In 2014, represent an improvement, the new hourly pay rates more people in the U.S. worked as retail salespeople still only amount to about $20,000 in annual earnings than in any other occupation, and the Bureau of Labor for full-time, year-round employees. Moreover, low 6 wages in retail are compounded by less-than-full-time Statistics projects that the retail industry will be one of the leading producers of new jobs in the coming period. hours and unpredictable schedules; retail workers Our study focuses on the four-largest non-managerial report higher rates of involuntary part-time than many occupations in the retail trade; these include jobs typi- other industries.8 Although wages in this sector are cally associated with retailing, such as cashiers and low on average, there are notable examples of large and salespersons, as well as back-of-the-house occupations profitable retail companies, such as Costco, that pay such as stock clerks, laborers, and movers. higher rates. The starting wage at Costco is $11.50 per 7 hour, and the average wage is $21 per hour; the retailer As Table 2.4 shows, almost 80 percent of these front- attributes its higher wages to lower employee turnover line workers make less than a $15 wage, and only five and higher customer satisfaction. Research has shown percent are unionized. Table 2.5 shows that although that Costco’s sales per employee are almost double front-line retail workers tend to be younger than the those of Sam’s Club.9 U.S. workforce overall, almost half are age 35 or older. As with many other low-wage occupations, women and people of color are disproportionately represented. Table 2.4. Hourly earnings and unionization rates of front-line retail workers, by occupation <$15 Median wage Union All front-line occupations 79.9% $9.94 5.0% Retail Salespersons 71.2% $10.35 Cashiers 90.3% $9.00 Stock clerks and order fillers 83.7% $10.10 Laborers and freight, stock, and material movers, hand 80.2% $10.00 Source: NELP calculations from Current Population Survey Merged Outgoing Rotation Group files 2012-2014. Note: All wages reported in 2014 dollars. Table 2.5. Demographic characteristics of front-line workers in retail Female African American Latino White Age 16-21 Age 22-34 Age 35-49 Age 50-64 52.6% 14.6% 17.9% 60.6% 23.8% 35.3% 20.7% 20.2% Source: NELP calculations from Current Population Survey Merged Outgoing Rotation Group files 2012-2014. 13 NELP | THE GROWING MOVEMENT FOR $15 092 Worker Profile: Fatmata Jabbie, Walmart, Northern Virginia Fatmata Jabbie works as a cashier at a Walmart in Northern Virginia, earning $8.40 per hour. Although she has asked her supervisors for full-time hours, her schedule remains inconsistent and often includes fewer hours than she needs. Some weeks she works 36 or 26 hours, while other weeks she works as few as 18 hours; her take-home pay is usually less than $200 each week. Her unpredictable schedule also makes it difficult to arrange childcare for her fouryear-old son and one-year-old daughter, or pursue an education for herself. Jabbie can’t afford health care and pays out of pocket at the emergency room when necessary. She relies on food stamps, subsidized housing, and publicly subsidized childcare. 14 NELP | THE GROWING MOVEMENT FOR $15 093 Latino/a. Home care workers are slightly older than the Home care The home care workforce encompasses workers in two U.S. workforce as a whole, with 35 percent of workers main occupations: home health aides and personal care age 50 or older. aides. Both assist older adults or people with disabilities at their homes with personal care (assistance with Low wages for home care workers have profound impli- eating, dressing, bathing, and toileting) and household cations beyond the workers and their families, driving services (meal preparation, shopping, light cleaning, alarmingly high turnover and burnout, jeopardizing and transportation). The number of home care jobs in critical services, and straining the home care system the United States is projected to grow five times faster just as more and more Americans come to rely on its than jobs in all other occupations. About two million services.11 Several states and cities have recognized that people currently work in home care, and the country raising wages for workers employed in such publicly will need an additional one million new home care funded programs also saves public funds by easing workers by 2022. workers’ reliance on public benefits and stemming the 10 tremendous financial and human cost of recruiting Our analysis shows that almost 90 percent of home care and retraining what has been a constantly churning workers make less than $15 per hour. Slightly over 10 workforce. They have passed reforms such as New percent are unionized (See Table 2.6). The home care York’s Wage Parity Act, which raised compensation for workforce is overwhelmingly female (91 percent); one Medicaid-funded home care workers to $14 per hour in in three workers is African American, and one in five is wages and benefits. Table 2.6. Hourly earnings and unionization rates of front-line home care workers Home care workers <$15 Median wage Union 88.6% $10.00 10.6% Source: NELP calculations from Current Population Survey Merged Outgoing Rotation Group files 2012-2014. Note: All wages reported in 2014 dollars. Table 2.7. Demographic characteristics of front-line workers in home care Female African American Latino White Age 16-21 Age 22-34 Age 35-49 Age 50-64 91.4% 33.5% 20.3% 38.9% 4.6% 30.5% 30.0% 35.0% Source: NELP calculations from Current Population Survey Merged Outgoing Rotation Group files 2012-2014. 15 NELP | THE GROWING MOVEMENT FOR $15 094 Auto manufacturing to decline. Between 2003 and 2013, the real wage for For much of the 20th century, motor-vehicle manufac- auto parts workers fell by 13.7 percent. As NELP’s past turing jobs anchored the blue-collar middle-class in research has shown, during the recovery, many of the the United States, paying wages that were higher than well-paying jobs that were lost during the crisis were those earned by most private-sector workers. In recent replaced by lower-wage jobs, often non-union, out- decades, however, real (inflation-adjusted) wages have sourced, and/or staffed via employment agencies.15 declined in the automotive sector, with a sharp acceleration after the collapse of the U.S. economy in 2008. Almost three-quarters of a million people worked in Since then, U.S. auto production has rebounded, from automobile parts and assembly manufacturing in 2014. a low of 5.7 million vehicles in 2009 to 11.1 million vehi- Our analysis includes workers from the largest produc- cles in 2013. 12 tion occupation category, “miscellaneous assemblers Foreign and domestic companies have and fabricators.” As Table 2.8 shows, almost half these added 350,000 new jobs at their U.S. auto assembly and parts plants since 2009. 13 workers make below $15, and slightly more than one in With expanded production, the industry has seen steady increase to capital returns; four are unionized. Auto workers are largely white (58.3 several major automotive parts suppliers recently percent) or African American (28.4 percent), and male each completed over $1 billion in share repurchases.14 (67 percent). A majority—about three in five—are age 35 However, average wages in the sector have continued or older. Table 2.8 Hourly earnings and unionization rates for front-line auto-manufacturing workers Miscellaneous assemblers and fabricators <$15 Median wage Union 45.6% $15.30 28.7% Source: NELP calculations from Current Population Survey Merged Outgoing Rotation Group files 2012-2014. Note: All wages reported in 2014 dollars. Table 2.9. Demographic characteristics of front-line auto-manufacturing workers Female African American Latino White Age 16-21 Age 22-34 Age 35-49 Age 50-64 33.0% 28.4.% 7.8% 58.3% 3.9% 36.1% 35.8% 24.0% Source: NELP calculations from Current Population Survey Merged Outgoing Rotation Group files 2012-2014. 16 NELP | THE GROWING MOVEMENT FOR $15 095 Worker Profile: Letasha Irby, Lear Corporation, Selma, Alabama year. The vast majority of Selma residents—80 percent—are African American. “I have two children—a 10-year-old boy and a fouryear old little girl. I struggle to raise them on $12.00 an hour—the same wage that most workers in my plant make. On $12.00 an hour, we can’t afford our own house. My kids and I share my mother’s house. I can’t save for college on $12.00 an hour. On $12.00 an hour, all I can do is pay the bills. “When you make this little, the only way to earn enough money to provide for your family is to work all the overtime you can. At my plant, often you don’t “A lot has happened this year in Selma, Alabama, where I’ve worked for nine years at a plant that manufactures foam seat cushions for Hyundai. Tens of thousands of people came to Selma to celebrate the 50th anniversary of Bloody Sunday and remember our town’s role in passing the Voting Rights Act, and millions more Americans learned the story by watching the award-winning movie Selma. When Oprah Winfrey came to town on Martin Luther King’s birthday, I listened to her speak from the steps of City Hall as she urged us to never forget how people had fought bravely 50 years ago to make a better life possible for so many today. “But the fact is, the struggles in Selma are not just a thing of the past. “Today, about 42 percent of people living in Selma are below the poverty line. The median income is half the average for Alabama as a whole—about $22,500 a “For our parents and grandparents, a good manufacturing job—especially in auto— was a ticket to the middle class. Why should my generation of workers be any different? ” have a choice. Lear operates six or sometimes even seven days a week, and it’s not unusual for a worker in the plant to work 60 or more hours a week. That’s a lot of time away from your kids. When I have to work those kinds of hours, it’s a constant juggling act. We shouldn’t have to choose between earning enough money to provide for our families, and having the time to actually be there for them. “When you make this little, the only way to earn enough money to provide for your family is to work all the overtime you can. ” “Even with all this, many people say a job at our plant is one of the best in town. But I know things can be better. I can appreciate what people went through many years ago when they fought for civil rights and voting rights. Now we’re fighting for workers’ rights. Since my co-workers and I started joining together to form our union, we’ve seen wages go up by almost $1.00. That’s a start, but we have a long way left to go. For our parents and grandparents, a good manufacturing job—especially in auto—was a ticket to the middle class. Why should my generation of workers be any different?” 17 NELP | THE GROWING MOVEMENT FOR $15 096 Child care meet, child-care providers often rely on various forms There are more than 800,000 child-care workers in the of public assistance such as Medicaid, food stamps, and United States today, employed at child-care centers, the earned income tax credit. A recent estimate sug- pre-schools, family day cares, and in private households gests that some 46 percent of child-care workers rely as “nannies.” 16 on some form of public assistance and that the annual Child-care wages in the United States have historically been low, and have failed to increase public cost of that assistance-program participation is even as public understanding of the importance of $1.3 billion.17 quality early-childhood care and education has deepened. Many child-care providers employed in private As Table 2.10 shows, 85 percent of child-care workers households are excluded from coverage of labor protec- make less than $15 per hour. About six percent are tions, including federal minimum wage and overtime union. The workforce is overwhelmingly female (93.5 law, occupational health and safety protections, and percent). Fifty-nine percent are white, almost 15 percent the right to organize unions. In order to make ends are African American, and 21 percent are Latino/a. Table 2.10. Hourly earnings and unionization rates of front-line child-care workers Child-care workers <$15 Median wage Union 85.1% $9.83 5.7% Source: NELP calculations from Current Population Survey Merged Outgoing Rotation Group files 2012-2014. Note: All wages reported in 2014 dollars. Table 2.11. Demographic characteristics of child-care workers Female African American Latino White Age 16-21 Age 22-34 Age 35-49 Age 50-64 93.5% 14.9% 21.4% 58.4% 26.0% 30.1% 23.2% 20.7% Source: NELP calculations from Current Population Survey Merged Outgoing Rotation Group files 2012-2014. Worker Profile: Kendra Liddell, Seattle, Washington Kendra Liddell toiletries for her family. She has a five-year-old son, lives in Seattle, for whom she can’t afford to pay for activities like Washington and going to a baseball game or trips to the zoo. Liddell currently earns believes that her supervisors at the child-care center $11 per hour are doing their best to support her and her co-work- working at a ers, but she has joined with other workers to call for child-care center union representation because she believes a union caring for children ages one to five. She started at the would give them a greater voice to fight for more center two years ago, first teaching in pre-K class- resources and support. According to Liddell, such rooms and now working in all of the classrooms with resources would not only allow child-care workers to all age groups. Earning low wages has meant that make ends meet, but also to improve the quality of Liddell struggles to take care of bills each month the care they are able to provide. and to pay for basic necessities such as food and 18 NELP | THE GROWING MOVEMENT FOR $15 097 We look at hourly earnings for the four-largest non- Hotel/motel accommodation The hotel business in the United States is booming, managerial occupations: maids and housekeepers; with record profits in recent years and 2014 seeing hotel, motel and resort desk clerks; waiters and wait- the highest levels of rooms booked ever. 18 resses; and janitors and building cleaners. We find that One indus- try analyst recently noted, “We have not seen...such more than 8 out of 10 workers in front-line occupations strong and sustained profit growth in the 78 years [this make less than $15 per hour. Less than 1 in 10 are union- firm] has been tracking the U.S. lodging industry.” ized. Three out of four workers are female. More than 19 Although hotel profits are soaring and room occupancy one in three workers is Latino/a, and about one in five rates are at all-time highs, wages for front-line staff is African American. More than half of front-line hotel/ remain low. motel workers are over the age of 35. 2.12. Hourly earnings and unionization rates for workers in fast food <$15 Median wage Union All front-line occupations 83.5% $10.00 9.5% Maids and housekeeping cleaners 86.8% $9.44 Hotel, motel, and resort desk clerks 78.9% $10.14 Waiters and waitresses 85.6% $9.18 Janitors and building cleaners 72.9% $11.25 Source: NELP calculations from Current Population Survey Merged Outgoing Rotation Group files 2012-2014. Note: All wages reported in 2014 dollars. 2.13. Demographic characteristics of front-line hotel workers Female African American Latino White Age 16-21 Age 22-34 Age 35-49 Age 50-64 74.3% 18.6% 36.4% 34.0% 8.1% 33.6% 33.2% 25.1% Source: NELP calculations from Current Population Survey Merged Outgoing Rotation Group files 2012-2014. 19 NELP | THE GROWING MOVEMENT FOR $15 098 3 T $15 Wage Policies: Economic Research and Case Studies hough just a few years old, the $15 movement has pay to $15 for low-paid city employees and workers at already generated significant policy results. With companies performing contracts for the city. workers, employers, and policymakers across the country joining in, this movement for significantly raising A wider range of public bodies and institutions, from pay across the bottom of the U.S. economy has given the Los Angeles Unified School District to Multnomah rise to a growing number of policy changes, expanded County, Oregon to Baltimore’s Johns Hopkins Hospital the public debate on the minimum wage, and inspired have raised wages for low-paid public employees to a growing number of businesses to raise pay for their $15 through collective bargaining agreements. And workforces. Workers across the country have won pay in the private sector, major employers like Aetna have increases through a variety of methods: ballot initia- announced that they are raising their pay scales—a step tives, ordinances approved by local officials, collective that will boost wages for 5,700 at the insurance giant bargaining, executive orders, and voluntary changes to alone, where minimum pay will rise to $16. employers’ pay scales. Low-wage workers in a number of localities around the The most significant policy results have been the wave country have won pay increases to approximately $15 of action in major U.S. cities to adopt city minimum per hour (see Table 3.1). With the spread of the move- wages of up to $15. This began in November 2013 in ment to other cities and states, the number of workers SeaTac, Washington, when voters approved a ballot receiving wage increases could significantly increase. initiative to increase the minimum wage to $15 for work- Table 3.2 lists campaigns underway in several cities and ers in travel and tourism industry jobs associated with states, proposing minimum wage rates of around $15. the SeaTac International Airport. The SeaTac action in turn sparked a campaign in neighboring Seattle for the The public strongly backs this trend toward more nation’s first citywide $15 minimum wage, which its significant wage increases of up to $15. A January 2015 city council unanimously approved in June 2014. San poll by Hart Research Associates, commissioned by Francisco became the third and largest city to approve a the National Employment Law Project, found that $15 minimum wage in November 2014, when 77 percent nearly two in three voters (63 percent) support raising of city voters backed a ballot measure raising pay for 23 the federal minimum wage to $15 per hour by 202020 — percent of the city’s workforce. Shortly after, Chicago including a solid majority of Independents (61 percent) under Mayor Rahm Emanuel won approval of a slightly and two in five Republicans (40 percent).21 This support lower $13 minimum wage after a citywide campaign for includes a majority (56 percent) of Americans living in a $15 wage made that the moderate compromise posi- states that voted for Mitt Romney in the 2012 elections, tion. Similar proposals are being debated today in Los and strong margins in all regions of the country: 73 Angeles, which is likely to phase up its wage close to $15 percent in the Northeast, 60 percent in the South, and in the coming years. And leaders in a range of other U.S. 61 percent each in the Midwest and West. cities, from Sacramento to Minneapolis to New York, are In other cities—especially those that may not currently Economic research and on-the-ground experiences demonstrate the feasibility of $15 wage floors have the authority to adopt citywide minimum wages— Both the most rigorous research and the actual experi- policy action has taken other forms. New York City ences of cities that have adopted significantly higher Mayor Bill de Blasio issued an executive order raising minimum wages show that low-paying jobs can be pay and benefits to $15 for employers operating at city- manageably transitioned up to $15 wages. championing similar proposals. subsidized economic development projects. Portland, Oregon adopted a city living wage–type law raising 20 NELP | THE GROWING MOVEMENT FOR $15 099 The bulk of rigorous research over the past two decades And as the Los Angeles City Council considers propos- shows that raising the minimum wage has little adverse als to raise the citywide minimum wage to $13.24 by effect on employment levels. This is best illustrated by 2017 and to $15.25 by 2019, two separate studies found “meta-studies” that survey and aggregate the findings that these higher wage rates would have substantially of scores of studies of the impacts of higher minimum positive effects on the local economy and workers’ wages. The two leading meta-studies—by economists earnings. A City Council–commissioned study by the Hristos Doucouliagos and T.D. Stanley (2009) and Institute for Research on Labor and Employment at the Dale Belman and Paul Wolfson (2014)—show that the University of California, Berkeley estimated that these vast majority of recent studies find minimum wage proposals would boost workers’ spending by $1.36 bil- increases have little to no effect on employment levels lion by 2017 and $2.38 billion by 2019, with little impact or job growth.22 on total employment; there would be a net gain of more than 5,200 jobs county-wide, and business operating Similarly, state-of-the-art recent studies of cities and costs would rise by just 0.9 percent by 2019.26 counties with higher minimum wages have found no evidence that the higher wages cost jobs to any sig- In a separate study on the impact of Los Angeles’s $15.25 nificant degree. For example, in what is probably the minimum wage proposal, researchers at the UCLA most sophisticated and widely praised recent study, Labor Center projected even stronger economic ben- “Minimum Wage Effects across State Borders,” econo- efits—that 723,000 workers would see increased earn- mists Arindrajit Dube, T. William Lester and Michael ings totaling $5.9 billion in 2019, resulting in a boost of Reich (2010) compared employment trends in every pair consumer spending that would translate to 46,000 new of neighboring counties in the United States that had jobs.27 differing minimum wage levels at any time between 1990 and 2006. They found that higher minimum Finally, the on-the-ground experiences of cities that wages did not lead businesses in affected counties to have adopted significantly higher minimum wages in reduce their hiring or shift their hiring to neighboring recent years has shown that higher wages have been counties with lower minimum wage rates. manageable for businesses and have not led to lay-offs 23 or slowed job growth. For example, in both San Jose Now that cities have begun to phase up their minimum and San Francisco, jobs in the restaurant industry grew wages to the $15 level, economists have gone further faster after the minimum wage was increased, than and begun to model how the costs of such substantially they did in surrounding cities and counties that did higher wages can be manageably absorbed. For exam- not raise wages. In San Jose, The Wall Street Journal ple, economists Robert Pollin and Jeannette Wicks-Lim reported, “Fast-food hiring in the region accelerated recently analyzed how fast-food employers—one of once the higher wage was in place. By early [2014], the the major low-paying industries—would adjust to a pace of employment gains in the San Jose area beat $15 wage.24 They found that the costs of transitioning the improvement in the entire state of California.”28 to this higher pay scale could be covered without any Similarly, University of California researchers found reduction in fast-food employment, through a combina- that restaurant employment grew 17.7 percent in San tion of four types of offsets: substantial savings from Francisco, faster than in the other Bay Area counties.29 reduced employee turnover; moderate price adjustments; allocating a slightly larger share of projected The story has been similar in SeaTac, Washington—the industry sales growth (which averages 2.5 percent per first city in the United States to transition to a $15 mini- year) to labor costs rather than profits; and redistribut- mum wage. Some local businesses had predicted lay- ing a higher portion of overall revenues within firms to offs and expansion-plan cancellations, as the proposed cover labor costs. wage increase would represent a 63 percent boost in the 25 21 NELP | THE GROWING MOVEMENT FOR $15 100 minimum wage and would not be phased in (although Johns Hopkins University and the affiliated Johns the new $15 minimum wage was originally meant to Hopkins Medicine (JHM) in Baltimore is one such cover all hospitality and transportation workers, a law- example. Collectively, Johns Hopkins–affiliated institu- suit by Alaska Airlines and the Washington Restaurant tions employ more than 33,000 people in the city and Association has delayed coverage to airport work- account for nearly $4 billion in economic activity. 34 ers. The state’s Supreme Court may rule on this case Johns Hopkins Medicine itself is the largest single relatively soon). However, as the Puget Sound Business employer in the City of Baltimore and one of the State of Journal reported a year later, the “[o]nce controversial Maryland’s largest private employers.35 $15-an-hour minimum wage [is] now a shoulder shrug So when 2,000 housekeepers, food service workers, in SeaTac.”30 nurses assistants, and other caregivers at JHM’s Johns SeaTac hotelier Scott Ostrander, owner of Cedarbrook Hopkins Hospital—inspired by fast-food workers—went Lodge, for example, had testified in front of the SeaTac on strike for a $15 wage in the spring of 2014, it was City Council in July 2013, stating, “I am shaking here significant news not only in Baltimore but around the tonight because I am going to be forced to lay people nation. The workers, members of SEIU 1199 United off…I’m going to take away their livelihood…And Healthcare Workers East, earned as little as $10.71 per what I’m going to have to do on January 1 [2014] is to hour36 working for an institution that opened a $1 bil- eliminate jobs, reduce hours.”31 Rather than distribut- lion medical complex in 2012 and provided its CEO over ing pink slips, Mr. Ostrander went ahead with a $16 $15 million in compensation in 2013. 37 million expansion, adding 63 rooms and a spa, and creating jobs. 32 Another business, MasterPark, simi- Hospital employee Melvinna Alford, who cleans rooms, larly opposed to the wage increase, warned it would assists nurses, and transports patients,38 told the be forced to replace some workers with automation. Baltimore Sun, “We just want to be able to take care of Instead, it implemented a surcharge of less than a dollar our families.”39 for its services, did not cut jobs, and highlighted the $15 wage as an employee recruiting incentive. After the After a three-day strike in April, a Mother’s Day march wage increase took effect, its manager stated that laying and rally attended by 3,500 Hopkins employees and off workers would be “foolish,” that good service is key supporters (including the actor Danny Glover),40 the to the company’s business model, and that this type threat of another strike in late June, and the interven- of service includes customers’ ability to interact with tion of Maryland Governor Martin O’Malley,42 the human beings. hospital workers won a significant victory. The contract 33 they signed in July 2014 will give every worker with 15 These real-world experiences illustrate that businesses years’ experience a $15 wage by 2017, and ensure that all are reluctant to cut jobs when faced with a substantially workers employed in the unit will earn a least $13 per higher minimum wage. And that many—including the hour by 2018.43 businesses highlighted in this report—instead actively incorporate the benefits of paying higher wages into Given Johns Hopkins’ massive presence and clout in their staffing strategies. the City of Baltimore, observers have predicted that the increase will not only impact wages at other local Case Study: Johns Hopkins medical facilities but also effectively raise wages in the In many small- and medium-sized cities with a signifi- city as a whole.44 cant higher education presence, universities and their affiliated institutions—in particular medical centers—are The Hopkins victory—in the relatively small, post- often the most powerful drivers of the local economy. industrial city of Baltimore—represents a major 22 NELP | THE GROWING MOVEMENT FOR $15 101 advance for a $15 movement whose biggest wins thus far have been confined to big cities and the West Coast. Case Study: Seattle Minimum Wage More U.S. cities than ever before are fighting poverty locally by raising the minimum wage. With eleven Case Study: Aetna acting in 2014 alone, today more than 20 cities and The growing $15 movement has not only made signifi- counties have adopted higher local minimum wages.49 cant progress through policy campaigns and collective And buoyed by the $15 movement, more major cities are bargaining—it has also inspired some large companies adopting higher minimum wages than ever before— to re-think their pay scales. demonstrating that it is feasible to transition local economies to significantly higher wages of up to $15. In January, Mark Bertolini, CEO of insurance giant Aetna, announced plans to boost the company’s mini- Seattle is at the forefront of that movement as the first mum pay to $16 per hour, giving 5,700 employees a pay major city to adopt a $15 minimum wage. The effort increase of up to 33 percent.45 Asked why he made the actually began in SeaTac, a Seattle suburb that is home move, Bertolini echoed the demands of fast-food, retail, to the city’s airport. Like many airports across the coun- and other workers who have protested low pay. try, workers at the Sea-Tac International Airport had seen their formerly well-paying jobs turn into low-wage “Here we are a Fortune 50 company and we’re about to ones, as airline companies increasingly contracted put these people into poverty, and I just didn’t think it out their work. Alex Hoopes, an airport worker with 20 was fair,” he told CNBC.46 In the interview, Bertolini years of experience who earned $21 per hour in 2005 as indicated that many of Aetna’s workers are single moth- a baggage handler for Alaska Airlines, told the Seattle ers who have had to rely on food stamps and Medicaid Post-Intelligencer that his pay fell to $9.50 per hour because they could not afford Aetna’s health-care plans working for a contractor.50 on their low wages. 47 A broad coalition, including SEIU 775, a local SEIU Bertolini also cited the benefits to Aetna’s business. health care union, led a ballot initiative campaign to Employees impacted by the increase include those in establish a $15 wage floor for airport and airport-related customer service, claims administration, and billing— jobs. The organizing to pass the ballot initiative was people who are “the face of the company to customers deep and sustained. In a town with just 12,000 reg- every day,” according to the company’s press release.48 istered voters, volunteers knocked on doors 40,000 times.51 By a narrow margin, the initiative passed—rais- “We’ve sort of destroyed business after business in ing pay for nearly 6,000 airport, hotel, car rental, and this country by looking at spreadsheets with numbers other workers. we call truth,” Bertolini said. “Instead, let’s look at the potential benefits we could derive, hard and soft, as a Lifted by the success of this initiative, the coalition result of this investment.” proposed a $15 wage for Seattle and helped make the proposal a centerpiece in the city’s 2014 mayoral race. The Aetna’s unilateral pay increase—no other company in “$15 question” was raised in almost every major candidate the insurance industry has made the same move—is forum and event, prompting then-candidate Ed Murray to evidence both that big business can absorb such endorse the idea. The fast-food worker movement, which increases and that there is a significant benefit to busi- had elevated the debate on wages nationally and in Seattle, ness that comes from paying higher wages. It remains prompted a race to the top—with candidates eager to sup- to be seen whether Bertolini’s fellow Fortune 500 CEOs port the movement and the idea of a $15 minimum wage. will get the message. Once elected, Mayor Murray appointed a business-labor 23 NELP | THE GROWING MOVEMENT FOR $15 102 taskforce to figure out how the city could get to $15 per Multnomah County was first. In November, 2014, hour. Appointing both David Rolf, the president of SEIU AFSCME Local 88 reached agreement with the county 775, and business leader Howard Wright, the founder of on a new contract that will lift the minimum wage for the Seattle Hospitality Group, Mayor Murray gave the covered employees to $15 by mid-2016.53 Not content to taskforce four months to hammer out a proposal. 52 The stop there, AFSCME suggested that the county extend taskforce settled on a compromise proposal that would the $15 minimum to all county workers, not just union- phase in a $15 minimum wage more slowly for smaller ized ones – and in early December the county Board of businesses than for larger ones, and would allow Commissioners voted to do just that. The decision will employers to count some portion of tips and health-care impact nearly 400 city employees, in addition to the 150 benefits in calculating the minimum wage—but only unionized employees who will see their wages rise to temporarily. With community groups and significant $15, and makes Multnomah the first county and largest segments of the business community supporting the public employer in Oregon to adopt a $15 wage. 54 proposal, in June 2014, Seattle’s city council unanimously approve the taskforce proposal. In the city of Portland, the increase to $15 came via a 5-0 vote by the city council to raise its minimum wage As the first city to adopt a plan to transition to a $15 for full-time city workers and contracted workers. wage, Seattle is leading the way for the nation’s other major cities. Shortly after Seattle, in November 2014 San The vote was the result of pressure by $15 Now Portland, Francisco voters approved raising that city’s minimum which has ties to activists in Seattle who orchestrated wage to $15 by 2018. In December 2014, Chicago under that city’s campaign for a $15 minimum wage, and the Mayor Rahm Emanuel approved a $13 minimum wage local Jobs with Justice chapter, which spearheaded the after the $15 movement created significant local pres- original version of the city’s “Fair Wage Policy.” The sure for strong wage action. Currently, Los Angeles is city’s labor unions have also pushed the increase. debating minimum wage proposals ranging from $13.25 to $15.25, with final action expected this year. And cities Most of the workers who will be affected are janitors, from Sacramento and Olympia to Minneapolis and New parking attendants, and security officers employed by York are considering $15 proposals. contractors covered by the Fair Wage Policy. Left out are 1,800 seasonal and part-time Parks Bureau employees, Case Study: Portland Public Workers but the Council has agreed to commission a study on Cities have long been ground zero for the living wage extending the increase to these workers. movement, the site of numerous campaigns over the past two decades focused on ensuring that taxpayer Inspired by and following on the heels of the victory in dollars – which pay the salaries of city employees and Seattle, the Multnomah and Portland measures have subcontracted workers – fund decent jobs. solidified the Pacific Northwest’s role as the vanguard of the Fight for $15. And more wins may be coming: a But even with all the successes of this, the recent bill for a statewide $15 minimum wage is now before the approval of a $15 wage for public workers in two sepa- Oregon state legislature. rate jurisdictions in Oregon (Multnomah County and the city of Portland) is momentous. 24 NELP | THE GROWING MOVEMENT FOR $15 103 Table 3.1. Summary table of $15 wage policies State Wage Year Type of Policy San Francisco $15.00 2018 Citywide Minimum Wage Law LA (hotel workers) $15.37 2015 City Industry Minimum Wage Law LA Unified School District $15.00 2016 Collective bargaining $14.40 ($30K/yr) 2014 Company policy C1 Bank $14.00 2014 Company policy Maryland John Hopkins Hospital $15.00 2017 Collective bargaining Massachusetts Lynn Community Health Center $15.00 2016 Collective bargaining Michigan Moo Cluck Moo $15.00 2014 Company policy New York University of Rochester (service workers) $15.00 2017 Collective bargaining New York City economic development project workers $15.22 2019 Executive order Portland (housing authority workers) $15.00 2014 Collective bargaining Portland (seasonal park rangers) $15.83 2014 Collective Bargaining Multnomah County $15.00 2016 Collective bargaining Portland (full-time city, contract workers) $15.00 2015 City Living Wage Law SeaTac $15.00 2014 City Industry Minimum Wage Law Seattle $15.00 2017 Citywide Minimum Wage Law Seattle Central Co-Op Grocery Store $15.36 2015 Collective bargaining King County (county, contract workers) $15.00 2017 Ordinance Aetna $16.00 2015 Company policy California Florida Oregon Washington State Various Jurisdiction or Employer First Green Bank 25 NELP | THE GROWING MOVEMENT FOR $15 104 Table 3.2. Current policy campaigns for $15 base wages State Wage Year $15 Citywide Minimum Wage Law Not Available Los Angeles $13.25 to $15.25 Citywide Minimum Wage Law 609,00055 Sacramento $15 Citywide Minimum Wage Law Not Available Delaware Delaware (fast food & property services) $15 State Industry Minimum Wage Law Not Available District of Columbia Washington $15 Citywide Minimum Wage Law Not Available Illinois Chicago (public school employees) $15 Policy Not Available Maine Portland $15 Citywide Minimum Wage Law Not Available Massachusetts Massachusetts (fast food & larger retail) $15 State Industry Minimum Wage Law Not Available New York New York State Minimum Wage Law for Certain Cities 1.0 to 1.25 million56 Oregon Oregon $15 Statewide Minimum Wage Law 703,000 workers57 Washington State Olympia $15 Citywide Minimum Wage Law Not Available Tacoma $15 Citywide Minimum Wage Law Not Available California 26 Jurisdiction or Employer Davis $11.50 to $15 Type of Policy NELP | THE GROWING MOVEMENT FOR $15 105 4 A Action Recommendations s cataloged in this report, the growing momentum and early achievements of the $15 movement 3. Executive orders or wage laws raising the minimum wage to $15 for businesses receiving are giving rise to a diverse array of policy initiatives. public contracts or subsidies. Many cities, some Federal, state, and local policymakers and private- states, and the federal government already make sector leaders, recognizing the benefits of shifting our it a practice, under living wage or prevailing wage economy back toward better-paying jobs, can contribute laws, to require employers receiving government to this change through steps such as the following: contracts or economic development subsidies to pay higher minimum wages. Many of these city and 1. Phasing up the minimum wage to $15. San state wage laws already require pay of $15 or more, Francisco and Seattle led the way with the first but others still do not and may set standards as low citywide $15 wages. This momentum led Chicago to as $10 per hour. Mayors, governors, and the federal raise its wage significantly to $13. And Los Angeles government should adopt executive orders or wage and other major cities are now poised to follow. laws to raise pay for employers benefiting from Mayors and other city leaders, especially in high- taxpayer-funded contracts or subsidies to at least cost regions, can join and build this movement by $15 plus benefits. championing increases to phase up their minimum 4. Raising wages for low-paid city, state, or fed- wages to $15 to over several years. And in states eral employees to $15. Many state or city employ- like Oregon, coalitions are campaigning for state- ees, such as school aides, human services workers, wide $15 minimum wages—proposals that, even property service workers, and food service workers, if they do not fully prevail, can shift the debate perform vital public functions yet earn well under and create momentum for higher statewide wages $15 per hour. Through either executive action, or like the $12-13 proposals that many states and the as part of negotiating collective bargaining agree- Democrats in Congress are now calling for. ments with public workers, mayors and governors 2. $15 minimum wages for key low-wage indus- can tackle this problem by raising pay for public tries such as fast food, large retail, hotels, workers to at least $15, as the Los Angeles Unified caregiving, property services, and airport workers. Growth in major low-paying industries School District and the City of Portland have done. 5. Raising private-sector pay scales to $15. has been driving our economy’s tilt toward low- Employers such as Aetna and the Johns Hopkins paying jobs. By paying so little, employers in these Hospital are leading the way for the private sector sectors are forcing taxpayers to pick up the cost of by acting to raise their minimum company pay supporting their workforces; they can afford to pay scales to $15 or more. They are finding that rais- better. Airports such as SeaTac, LAX, SFO, San Jose, ing pay at the bottom helps retain a stable and Oakland, and St. Louis have already shown that it is motivated workforce, with significant productivity feasible to raise pay and benefits to $15 or more. Los benefits for the company and the nation’s economy. Angeles has raised wages for hotel workers to $15.37. Other private companies and major institutions Washington, D.C. raised pay and benefits for secu- should follow their example, creating momentum rity guards in large office buildings to $16.71. New to raise standards in their industries and make a York raised wages and benefits for Medicaid-funded broader shift toward investing in better jobs. home care workers to $14.09. States and cities can join this movement by raising the minimum wage for key low-wage industries to $15 or more, as Massachusetts is proposing for fast-food and large retail employers. 27 NELP | THE GROWING MOVEMENT FOR $15 106 Appendix A: Technical Notes Estimating the share of workers making less than $15 per hour The bulk of our analysis in this study uses data from the Percentages reported with regard to demographic and wage variables are calculated using CPS-provided population weights. Current Population Survey (CPS), the primary government survey containing information on wages, hours, Employment level estimates and unionization rates. The CPS is a monthly national We supplement our CPS analysis with analysis of data survey of approximately 60,000 households that is from the Occupational Employment Statistics survey, representative of the U.S. non-institutional popula- which is a Bureau of Labor Statistics establishment tion aged 16 and older. We used the Current Population survey that provides more reliable estimates of employ- Survey Merged Outgoing Rotation Groups (CPS ORG) ment levels than the CPS. The OES only reports wage files made publicly available by the Center for Economic levels at the following percentiles: 10th, 25th, 50th, and Policy Research. In order to have a sample suf- 75th, and 90th. In order to estimate the minimum ficiently large to analyze specific occupations and number of workers in each occupation, we identified the industries, our analysis combines data from the last first reported percentile at which wages were below $15 three consecutive years available (2012-2014). We use per hour. Note that the wage measure in the OES survey wage variables in which all values have been converted includes tips and commission but excludes overtime. to 2014 dollars. Estimating unionization rates Our sample includes private- and public-sector, hourly The CPS asks whether respondents are union members and salaried workers between the ages of 16 and 64. We or covered by a union or employee association contract exclude non-incorporated, self-employed workers. For because it is possible to be represented by a labor union non-hourly workers, hourly wages are calculated using and to be covered by a collective bargaining agreement, reported hours worked. Unless otherwise noted, the fig- but not be a member of that union. We define union ures we report are calculated from hourly earnings that workers as respondents who answer affirmatively to do not include tips, overtime, and commission. Note being a member of, or being represented by, a union at that there is a tendency for workers to report hourly their current job. earnings in round numbers, which causes percentiles of the distribution to “clump” at whole-dollar values. Defining front-line occupations Our analysis does not “smooth” wages to correct for this Food service and drinking places includes workers clas- source of measurement error. For calculations involv- sified in the Census two-digit detailed industry recode ing wages, we only include respondents for whom wage as “food service and drinking places” (46), and in the data are available. For calculations involving occupa- occupations listed in the Table X (Occupation codes tions and industries, we only include respondents for 4110, 4000, 4020, 4030, 4040, 4050, 4130, 4140, 4150, whom occupation and industry data are available. 4720). Demographic estimates For simplicity, we combined the occupation categories Racial/ethnic categories used in this analysis are mutu- “food prep and serving related, all other” (4050) and ally exclusive. “Latino” in our demographic tables refers “combined food prep and serving” (4130) into a category to individuals who report that they belong to Spanish, we labeled “other preparation and serving-related Hispanic, or Latino categories. These respondents may workers.” We report on “combined food prep and serv- also select more than one race. As such, the three racial/ ing” separately in the Table X, which reports figures on ethnic categories we report are white, non-Latino; front-line fast-food workers. African American, non-Latino; and Latino, any race. 28 NELP | THE GROWING MOVEMENT FOR $15 107 For fast-food restaurants, we likewise include workers code 3570) as “miscellaneous assemblers and fabrica- classified in the two-digit detailed industry recode tors” (7750). as “food service and drinking places” (46). Following previous studies, we used the following occupations as For child care, we included all workers in all industries a proxy for fast-food workers as a whole: “combined food who reported that their occupation was “child care preparation and serving workers, including fast food” worker” (4600). (4050), “counter attendants, cafeteria, food concession, and coffee shop” (4060) and “cashiers” (4720). For hotels, we included all workers in the category “accommodation” (four-digit industry code 8660), and For retail, we included the largest occupations (4720, the following largest non-managerial occupations: 4760, 5620, 9620) in the category “retail trade” (two- (4220) janitors and building cleaners; (4110) waiters and digit industry code 22). waitresses; (4230) maids and housekeeping; and (5300) hotel motel and resort desk clerks. For home care, we included workers classified in the “home health services” four-digit industry code (8170), who reported working in one of the following two occupations: “nursing, psychiatric, and home health aides” (3600) and “personal care aides” (4610). For automobile manufacturing, we included workers classified in the category “motor vehicles and motor vehicle equipment manufacturing” (four-digit industry 29 NELP | THE GROWING MOVEMENT FOR $15 108 Appendix B: Tables Table B.1. Estimates of workers making less than $15 per hour, by state State <$15 Median Wage Arkansas 51.0% $14.71 Mississippi 50.5% $14.79 Tennessee 49.8% $15.00 Montana 49.8% $15.00 Kentucky 49.5% $15.00 South Dakota 49.0% $15.00 Idaho 48.4% $15.19 South Carolina 47.8% $15.30 Louisiana 47.7% $15.30 North Carolina 47.5% $15.42 Nevada 47.3% $15.30 Texas 47.0% $15.52 Alabama 46.7% $15.52 New Mexico 46.7% $15.52 Oklahoma 46.5% $15.42 Nebraska 46.2% $15.52 West Virgina 46.1% $15.81 Arizona 45.3% $15.92 Georgia 45.3% $16.00 Iowa 45.0% $15.91 Florida 45.0% $16.00 Kansas 45.0% $15.99 Utah 45.0% $16.00 Indiana 44.9% $15.71 Ohio 44.8% $15.87 Maine 44.4% $16.00 Michigan 44.1% $16.32 Missouri 43.6% $16.32 Wisconsin 41.8% $16.83 California 40.9% $17.35 30 NELP | THE GROWING MOVEMENT FOR $15 109 Table B.1. Estimates of workers making less than $15 per hour, by state (continued) State <$15 Median Wage Oregon 40.8% $17.02 Illinois 40.8% $17.34 Pennsylvania 40.6% $17.10 Hawaii 40.4% $17.16 North Dakota 39.8% $16.92 Delaware 39.8% $17.59 Rhode Island 39.4% $17.83 Vermont 39.1% $17.16 Wyoming 38.4% $17.50 New York 38.4% $18.25 Virginia 36.9% $18.95 Colorado 36.4% $18.48 Minnesota 36.1% $18.54 New Hampshire 36.0% $18.46 Washington State 35.9% $18.75 New Jersey 35.8% $19.61 Maryland 33.8% $19.90 Massachusetts 33.6% $20.09 Alaska 33.5% $19.02 Connecticut 33.4% $20.40 Washington DC 25.8% $24.73 Source: NELP calculations from Current Population Survey Merged Outgoing Rotation Group files 2012-2014. 31 NELP | THE GROWING MOVEMENT FOR $15 110 Table B.2. Largest occupations with median wages less than $15 per hour Employment Minimum # workers <$15 Median wage Median annual earnings 1. Retail Salespersons* 4,562,160 3,421,620 $10.29 $21,390 2. Cashiers 3,398,330 3,058,497 $9.16 $19,060 3. Combined Food Preparation and Serving Workers, Including Fast Food* 3,131,390 2,818,251 $8.85 $18,410 4. Office Clerks, General 2,889,970 1,444,985 $13.78 $28,670 5. Waiters and Waitresses 2,445,230 2,200,707 $9.01 $18,730 6. Laborers and Freight, Stock, and Material Movers, Hand* 2,400,490 1,200,245 $11.74 $24,430 7. Janitors and Cleaners, Except Maids and Housekeeping Cleaners* 2,137,730 1,603,298 $10.98 $22,840 8. Stock Clerks and Order Fillers 1,878,860 1,409,145 $10.99 $22,850 9. Nursing Assistants* 1,427,740 1,070,805 $12.07 $25,100 10. Personal Care Aides* 1,257,000 1,131,300 $9.83 $20,440 11. Team Assemblers 1,125,160 1,012,644 $13.64 $28,370 12, Cooks, Restaurant* 1,104,790 828,593 $10.81 $22,490 13, Security Guards 1,077,520 538,760 $11.74 $24,410 14. Receptionists and Information Clerks* 981,150 490,575 $12.87 $26,760 15. Maids and Housekeeping Cleaners* 929,540 836,586 $9.67 $20,120 16. Landscaping and Groundskeeping Workers* 868,770 651,578 $11.68 $24,290 17. First-Line Supervisors of Food Preparation and Serving Workers 867,340 433,670 $14.21 $29,560 18. Construction Laborers* 852,870 426,435 $14.95 $31,090 19. Food Preparation Workers 850,220 765,198 $9.40 $19,560 20. Home Health Aides* 799,080 719,172 $10.28 $21,380 21. Light Truck or Delivery Services Drivers 797,010 398,505 $14.21 $29,570 22. Packers and Packagers, Hand 693,170 519,878 $9.77 $20,330 23. Shipping, Receiving, and Traffic Clerks 661,530 330,765 $14.39 $29,930 24. Substitute Teachers 622,600 311,300 $12.60 $26,200 32 NELP | THE GROWING MOVEMENT FOR $15 111 Table B.2. Largest occupations with median wages less than $15 per hour (continued) Employment Minimum # workers <$15 Median wage Median annual earnings 25. Medical Assistants 584,970 292,485 $14.41 $29,960 26. Childcare Workers* 582,970 524,673 $9.48 $19,730 27. Bartenders 579,700 434,775 $9.16 $19,050 28. Cooks, Fast Food 519,910 467,919 $8.91 $18,540 29. Tellers 514,520 385,890 $12.38 $25,760 30. Dishwashers 502,280 452,052 $9.03 $18,780 31. Bus Drivers, School or Special Client 499,440 249,720 $13.87 $28,850 32. Counter Attendants, Cafeteria, Food Concession, and Coffee Shop 476,470 428,823 $9.01 $18,740 33. Counter and Rental Clerks 437,610 218,805 $11.47 $23,860 34. Helpers—Production Workers 420,520 315,390 $11.35 $23,610 35. Dining Room and Cafeteria Attendants and Bartender Helpers 410,460 369,414 $9.02 $18,760 36. Driver/Sales Workers 405,810 202,905 $10.70 $22,250 37. Cooks, Institution and Cafeteria 402,800 302,100 $11.27 $23,440 38. Packaging and Filling Machine Operators and Tenders 381,760 190,880 $12.70 $26,410 39. Hosts and Hostesses, Restaurant, Lounge, and Coffee Shop 372,670 335,403 $9.00 $18,720 40. Pharmacy Technicians 368,760 184,380 $14.33 $29,810 Source: NELP calculations from May 2014 OES; 2012 BLS Employment Projections. Note: All dollar values in 2014 dollars. OES wage measures include tips and commission but not overtime. Asterisk denotes occupations in the top 30 of occupations projected to have the most net growth between 2012-2022. 33 NELP | THE GROWING MOVEMENT FOR $15 112 References 1. Rachel Abrams, “States’ Minimum Wages Rise, Helping Millions of Workers,” New York Times, December 31, 2014, available at: http://www.nytimes.com/2015/01/01/business/hourly-minimum-wage-isgoing-up-for-millions.htm 19. 2. Gerald Mayer, “Union Membership Trends in the United States”, Cornell University ILR School Digital Commons, available at: http://digitalcommons.ilr.cornell.edu/cgi/viewcontent. cgi?article=1176&context=key_workplace 20. Hart Research Associates, Support for a Federal Minimum Wage of $12.50 or Above, January 2015, available at: http://www.nelp.org/ page/-/rtmw/Minimum-Wage-Poll-Memo-Jan-2015.pdf?nocdn=1 3. Bureau of Labor Statistics, “Union Members Summary”, January 23, 2015, available at: http://www.bls.gov/news.release/union2.tn.htm 4. 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Upjohn Institute for Employment Research, 2014. 23. Arindrajit Dube, T. William Lester, and Michael Reich, “Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties,” The Review of Economics and Statistics, 92(4): 945–964 (November 2010), available at: http://www.irle.berkeley.edu/ workingpapers/157-07.pdf. See NELP summary here. 24. Robert Pollin and Jeannette Wicks-Lim, A $15 U.S. Minimum Wage: How the Fast-Food Industry Could Adjust Without Shedding Jobs, Political Economy Research Institute Working Paper Series, Working Paper No. 373, January 2015, available at: http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_ papers_351-400/WP373.pdf 25. Ibid, pg. 3. 26. Michael Reich, Ken Jacobs, Annette Bernhardt and Ian Perry, The Proposed Minimum Wage Law for Los Angeles: Economic Impacts and Policy Options, Institute on Labor and Employment at the University of California, Berkeley, March 2015, available at: http://clkrep.lacity.org/onlinedocs/2014/14-1371-S2_misc_3_3-19-15.pdf 27. Economic Roundtable, UCLA Labor Center, UCLA Institute for Research on Labor and Employment, Los Angeles Rising, March 2015, available at: http://clkrep.lacity.org/onlinedocs/2014/14-1371-S2_ misc_5_3-19-15.pdf 28. Eric Morath, “What happened to fast food workers when San Jose raised the minimum wage?”, Wall Street Journal, Apr. 9, 2014, available at: http://blogs.wsj.com/economics/2014/04/09/what-happenedto-fast-food-workers-when-san-jose-raised-the-minimum-wage/ 29. Michael Reich, Ken Jacobs and Miranda Dietz (eds.), When Mandates Work: Raising Labor Standards at the Local Level, University of California Press, 2014, available at: http://irle. berkeley.edu/publications/when-mandates-work/; “San Francisco’s Higher Minimum Wage Hasn’t Hurt the Economy,” Business Week, January 22, 2014, available at: http://www.businessweek.com/ articles/2014-01-22/san-franciscos-higher-minimum-wage-hasnt-hurt-theeconomy; “S.F. praised as model for U.S. on increasing minimum wage,” SF Gate, January 28, 2014, available at: http://www.sfgate. com/politics/article/S-F-praised-as-model-for-U-S-on-increasing-5183378. php 30. Marc Stiles, “Once controversial $15-an-hour minimum wage now a shoulder shrug in SeaTac”, Puget Sound Business Journal, Dec. 22, 2014, available at: http://www.bizjournals.com/seattle/blog/2014/12/ once-controversial-15-an-hour-minimum-wage-now-a.html?page=all 31. Dana Milbank, “Raising the Minimum Wage Without Raising Havoc,” The Washington Post, September 5, 2014, available at: http://www.washingtonpost.com/opinions/dana-milbank-no-calamity-yetas-seatac-wash-adjusts-to-15-minimum-wage/2014/09/05/d12ba922-350311e4-9e92-0899b306bbea_story.html. 32. Ibid. 33. Amy Martinez, “$15 Wage Floor Slowly Takes Hold in SeaTac,” NELP | THE GROWING MOVEMENT FOR $15 113 The Seattle Times, June 3, 2014, available at: http://www. seattletimes.com/seattle-news/15-wage-floor-slowly-takes-hold-in-seatac/ 34. Johns Hopkins University Government Community and Public Affairs, “The Impact of Johns Hopkins in Baltimore City,” available at http://web.jhu.edu/administration/gcpa/EIR_PDFs/15358%20 BaltoCity1PgSumPrinterProof.pdf 35. Johns Hopkins Medicine, “Fast Facts: Johns Hopkins Medicine,” available at: http://www.hopkinsmedicine.org/about/downloads/jhm_ fast_facts_feb_5_2015.pdf 36. Andrea Walker, “Hopkins hospital workers authorize strike”, Baltimore Sun, April 8, 2014 available at: http://articles.baltimoresun. com/2014-04-08/health/bs-hs-hopkins-strike-vote-20140408_1_ johnshopkins-hospital-seiu-united-healthcare-union-officials 37. Andrea Walker, “Hopkins workers set to strike Friday after impasse on negotiations,” Baltimore Sun, June 24, 2014, available at: http://articles.baltimoresun.com/2014-06-24/health/bs-hs-hopkinscontract-stalemate-20140624_1_hopkins-workers-seiu-united-healthcarejohns-hopkins-hospital 38. Walker, “Hopkins hospital workers authorize strike”, op. cit. 39. Ibid. 40. Hardship at Hopkins, “Mothers March and Rally for Justice”, available at: http://hardshipathopkins.org/mothers-march-rally-for-justice/ 41. Andrea Walker, “Hopkins workers give notice to strike,”, Baltimore Sun, June 18, 2014, available at: http://articles. baltimoresun.com/2014-06-18/health/bs-hs-hopkins-secondstrike-20140618_1_strike-notice-labor-union-seiu-united-healthcare 42. Andrea Walker, “Hopkins Hospital strike averted after O’Malley intervenes,” Baltimore Sun, June 26, 2014, available at: http://articles.baltimoresun.com/2014-06-26/health/bs-hs-hopkinsstrike-20140626_1_hopkins-worker-union-leaders-strike-notice http://www.bloomberg.com/bw/articles/2014-05-08/how-seattle-agreed-toa-15-minimum-wage-without-a-fight 53. Kevin Brown, “Historic $15 Minimum Wage Agreement Reached in Oregon,” November 2014, available at: http://www.afscme.org/ blog/historic-15-minimum-wage-agreement-reached-in-oregon 54. Tony Hernandez, “Multnomah County employee minimum wage to reach $15 per hour”, The Oregonian/Oregon Live, December 4, 2014, available at: http://www.oregonlive.com/portland/index. ssf/2014/12/multnomah_county_employee_mini.html 55. Michael Reich, Ken Jacobs, Annette Bernhardt and Ian Perry, The Proposed Minimum Wage Law for Los Angeles: Economic Impacts and Policy Options, Institute for Research on Labor and Employment University of California, Berkeley, March 2015, available at: http://clkrep.lacity.org/onlinedocs/2014/14-1371-S2_ misc_3_3-19-15.pdf 56. Fiscal Policy Institute, A Shared Opportunity Agenda: New York State Economic and Fiscal Outlook 2015-2016, February 10, 2015, available at: http://fiscalpolicy.org/wp-content/uploads/2015/02/20152016-FPI-Briefing-Book-1.0.pdf; and National Employment Law Project & Fiscal Policy Institute, Why New York State Should Let Cities and Counties Enact Higher Local Minimum Wages, February 2014, available at: http://nelp.3cdn.net/a75ad7e00146bfea9d_ gsm6bnvjg.pdf 57. Oregon Center for Public Policy, Great Progress for Oregon Workers: Who Would be Affected by Raising the State Minimum Wage to $15 by 2018? February 16, 2015, available at: http://www. ocpp.org/media/uploads/pdf/2015/02/fs20150216Impactof15_fnl.pdf 58. Allegretto, et al; op. cit. 43. Hardship at Hopkins, “93% vote in favor of contract,” available at http://hardshipathopkins.org/hopkins-1199ers-approve-contract-by-93/ 44. Shawn Gude and Rachel Cohen, “Baltimore Since Beth Steel: Hopkins Hospital Workers Fight for 15”, Dissent, June 26, 2014, http://www.dissentmagazine.org/online_articles/baltimore-since-bethsteel-hopkins-hospital-workers-fight-for-15 45. Aetna, Aetna Announces Changes that Will Improve Wages and Medical Benefits for Thousands of its Employees, January 21, 2015. Available at: http://news.aetna.com/news-releases/fact-sheet-aetnaannounces-changes-will-improve-wages-medical-benefits-thousandsemployees/ 46. Tom DiChristopher, “Paying Less than $16 per Hour not Fair: Aetna CEO,” CNBC, January 21, 2015, available at: http://www.cnbc. com/id/102354509 47. Ibid. 48. Aetna, op. cit. 49. National Employment Law Project, “City Minimum Wage Laws: Recent Trends and Economic Evidence”, available at: http:// www.nelp.org/page/-/rtmw/City-Minimum-Wage-Laws-Recent-TrendsEconomic-Evidence.pdf?nocdn=1 50. Joel Connelly, “$15 minimum wage: Today Sea-Tac, tomorrow America”, Seattle Post Intelligencer, November 26, 2013, http:// blog.seattlepi.com/seattlepolitics/2013/11/26/15-minimum-wage-todayseatac-tomorrow-america/#18398101=0 51. Ibid. 52. Karen Weise, “How Seattle agreed to a 15 dollar minimum wage without a fight,” Bloomberg Business, May 4, 2014, available at: 35 NELP | THE GROWING MOVEMENT FOR $15 114 36 NELP | THE GROWING MOVEMENT FOR $15 115 www.nelp.org NELP National Office 75 Maiden Lane Suite 601 New York, NY 10038 212-285-3025 tel 212-285-3044 fax Washington DC Office 2040 S Street NW Washington, DC 20009 202-683-4873 tel 202-234-8584 fax California Office 405 14th Street Suite 401 Oakland, CA 94612 510-663-5700 tel 510-663-2028 fax Washington State Office 317 17th Avenue South Seattle, WA 98144 206-324-4000 tel © 2015 National Employment Law Project. 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