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  • Backgrounder posted January 21, 2017 by James Sherk Labor Department Can Create Jobs by Calculating Davis–Bacon Rates More Accurately

    The Davis–Bacon Act (DBA) requires federal construction contractors to pay “prevailing” wages. However, the Department of Labor (DOL) estimates these prevailing rates unscientifically. DBA surveys use tiny, statistically unrepresentative samples of the construction workforce. As a result, DBA rates differ markedly from true market wages. Calculating DBA rates with Bureau…

  • Backgrounder posted January 19, 2017 by James Sherk $15 Minimum Wages Will Substantially Raise Prices

    Raising the minimum wage creates winners and losers. Those workers who receive higher pay benefit. But the money for that higher pay comes from somewhere. Advocates for a minimum wage hike usually argue that “somewhere” means profits. They present starting-wage increases as a way to redistribute wealth from business owners to low-wage workers. Reality is not so simple.…

  • Backgrounder posted January 19, 2017 by James Sherk The NLRB Can Protect Worker Voting Rights Administratively

    The National Labor Relations Board (NLRB) election processes have failed to achieve the National Labor Relations Act’s (NLRA) goal of enabling unionized workers to select their own representatives. Only 6 percent of workers currently represented by unions voted for union representation. The remaining workers are represented by legacy labor organizations for which they…

  • Issue Brief posted December 12, 2016 by James Sherk Compulsory Union Representation Would Make Gig-Economy Jobs Less Flexible

    The city of Seattle has passed regulations unionizing rideshare drivers. Union activists in other cities have proposed similar measures. These ordinances violate federal law and are likely to be struck down in court. Even beyond the question of legality, however, these ordinances are simply bad policy. Compulsory union representation forces all workers to operate under…

  • Backgrounder posted October 7, 2016 by James Sherk The Rise of the “Gig” Economy: Good for Workers and Consumers

    In today’s growing “gig” economy, workers and customers connect directly through computer programs or smartphone apps. Most people taking on these gigs work for themselves. They choose when and where to work, and when not to. While many Americans prefer jobs with regular hours, gig workers value flexibility and control over their schedules. Most gig workers say they…

  • Backgrounder posted August 30, 2016 by James Sherk Unelected Representatives: 94 percent of Union Members Never Voted for a Union

    Workers are legally represented by unions in workplace negotiations. In theory, this legal representation is legitimized through a democratic process in which workers vote in favor of union representation. In practice, only 6 percent of those covered by unions under the National Labor Relations Act (NLRA) have ever voted for union representation. In some cases, National…

  • Issue Brief posted August 17, 2016 by James Sherk How $15-per-Hour Minimum Starting Wages Would Affect Each State

    Researchers have paid little attention to the state-by-state impact of a $15-per-hour minimum wage. Such a measure was so far from the policy mainstream that few economists bothered considering it. Now, several cities and states have required $15-per-hour starting wages, prompting the need to consider the policy’s effects on jobs and the economy at large. This Issue…

  • Backgrounder posted July 27, 2016 by Rachel Greszler, James Sherk Why It Is Time to Reform Compensation for Federal Employees

    The federal government pays its employees more than they would earn in the private sector. Economic studies consistently find that federal employees enjoy both higher pay and substantially higher benefits than comparable private-sector workers. Alan Krueger, the former Chairman of President Barack Obama’s Council of Economic Advisers, documented this pay premium in the…

  • Issue Brief posted July 26, 2016 by James Sherk Raising Minimum Starting Wages to $15 per Hour Would Eliminate Seven Million Jobs

    Prominent Members of Congress have proposed raising the minimum wage to $15 per hour, more than doubling the federal minimum wage. States with lower costs of living would see an even greater real increase. At the state level, the minimum wage would cover one-third of wage and salary workers. The new minimum-wage legislation, including payroll taxes and the employer…

  • Testimony posted July 8, 2016 by James Sherk Keeping the American Dream Alive: The Challenge to Create Jobs Under the NLRB’s New Joint Employer Standard

    Testimony before the Committee on Small Business and Entrepreneurship U.S. Senate June 16, 2016 James Sherk, Research Fellow in Labor Economics Chairman Vitter, Ranking Member Shaheen, and members of the Senate Small Business and Entrepreneurship Committee, thank you for inviting me to testify. My name is James Sherk. I am a Research Fellow in Labor Economics at The…

  • Commentary posted July 6, 2016 by James Sherk Government Union Misusing Teachers' Pensions

    Government employee pensions are in crisis. They face a $3 trillion funding shortfall. A new Wall Street Journal article sheds light on one reason why: Unions use government pension investments as political weapons. The Employee Retirement Income Security Act (ERISA) makes private-sector pension managers fiduciaries. They must manage the pensions for the sole benefit of…

  • Commentary posted June 9, 2016 by James Sherk Simple - and Wrong - Solutions in Search for Higher Wages

    Why are so many workers struggling today? Some union-backed analysts have a straightforward answer: "Their employers are cheating them." They claim businesses no longer compensate workers for their productivity. This argument demonstrates H.L. Mencken's point that "for every complex problem there is an answer that is clear, simple, and wrong." Competition forces…

  • Backgrounder posted May 31, 2016 by James Sherk Labor’s Share of Income Little Changed Since 1948

    Many commentators claim that labor’s share of income has fallen to historic lows. They claim that a combination of automation, decreased unionization, and free trade reduced workers’ ability to command higher pay. However, changes in how the government measures self-employment income and faster depreciation explain—entirely—the apparent decline in labor’s share. Neither…

  • Backgrounder posted May 31, 2016 by James Sherk Workers’ Compensation: Growing Along with Productivity

    Increasing living standards depends on increasing worker productivity. Competition causes firms to tie wages closely to employees’ productivity. Since 1973, the average private-sector employee’s productivity has increased by 81 percent, while their average compensation has increased by 78 percent. Some analysts have produced charts purporting to show that productivity has…

  • Issue Brief posted May 19, 2016 by James Sherk California’s Unprecedented Minimum Wage Increase Will Hurt Vulnerable Workers

    The California legislature has passed an unprecedented statewide minimum wage hike. By 2023, the minimum wage across California will be $15 an hour. Adjusted for inflation, this will be higher than any statewide minimum wage in U.S. history. It will also be higher than the national minimum wage of any country in the world. The real increase will be even greater in inland…