In yet another attack on the minimum wage, New York Times Economix blogger Casey Mulligan argues that the failure of part-time employment to continue to increase at the end of 2009 is proof that the July 2009 minimum wage increase prevented 800,000 part-time jobs from being created.

But Mulligan’s reasoning is marred by two critical flaws that invalidate his argument. First of all, he attempts to use the employment of all part-time workers to evaluate the impact of the minimum wage increase, but only 11 percent of part-time workers made minimum wage in 2009. The vast majority of part-time workers are not minimum wage earners, so examining changes in the overall employment of part-time workers before and after the minimum wage increase is not a reliable indicator of how changes in the minimum wage impact employment.

The fact that part-time employment is an inaccurate proxy the for the impact of the minimum wage increase on employment is enough to derail Mulligan’s argument, but let’s continue to see how he further misinterprets the trends in part-time employment during the recession and recovery. Observing that the increase in overall employment among part-time workers halted and began to decline in the second half of 2009, Mulligan argues that the July 2009 minimum wage increase prevented employers from hiring more part-time workers. Because part-time employment declined at the end of 2009, he concludes that the rising cost of low-wage labor was the cause.

His graph:

However, attributing the stagnation in the number of part-time jobs to the minimum wage increase completely ignores the fact that part-time jobs were increasing from December 2007 to June 2009 because companies were cutting back on workers’ hours and millions of people previously holding full time jobs (34 hours or more a week) were facing hours cutbacks that turned their full-time jobs into part time jobs. Average weekly hours declined from 34.6 in December 2007 to a low point of 33.7 hours in June 2009. While minimum wage rose in July 2009 to $7.25, that same month was also the first month that average weekly hours began to increase again. The increase in part-time employment began to level off as fewer workers saw their hours cut and more workers had their hours restored.

See my graph below, which shows the sharp rise in part-time jobs coinciding with a precipitous fall in hours. As hours begin to increase back into the full-time range at the end of 2009, the number of part-time employed begins to fall:

If you break down part-time employment into voluntary part-time employment (workers who indeed want part-time positions) and involuntary part-time employment (workers working part-time only because they are unable to find full-time positions), you will see that the increase in part-time employment from 2007-2009 was driven by involuntary unemployment— companies were slashing hours as the economy convulsed, and many more people were becoming involuntarily employed part-time as hours were cut.

Thus, the leveling off of the increase in part-time jobs at the end of 2009 is not a result of the minimum wage increase that affected only a sliver of part-time workers, but instead a result of the macroeconomic trend that employers were no longer dramatically cutting the hours of full-time jobs to create more part-time positions– they were actually beginning to expand hours. July 2009 was the first month the country was officially out of recession, and businesses responded by beginning to restore the hours of the workers they had.

As New Year’s Day approaches, here’s wishing you a Happy New Year 2001! That’s right, 2001. With wages stuck at 2001 levels, it’s been a lost decade for working families.

Significant job growth continues to elude the American workforce, as companies hold back from expanding and rehiring in the face of weak demand for their goods and services. In a Wall Street Journal article last month, “Dearth of Demand Seen Behind Weak Hiring,” CEOs and economists repeatedly emphasized that without customers lining up to buy products, new jobs will not materialize. “We’re hiring a little here and there—but it’s not what it should be. And it’s because of the lack of demand,” Long-Stanton Manufacturing CEO Daniel Cunningham told The Journal.

Unfortunately, the prospect of rising demand has suffered further setbacks in the past month. On August 2, the Commerce Department reported that consumer spending had dropped in June, the first time in nearly two years. That was, of course, the same day the debt-ceiling deal became law, mandating spending cuts and a process for further deficit reductions that will suck billions of dollars out of the economy. These cuts are estimated to reduce next year’s GDP by 0.1 to 0.3 percentage points.

Another cause for concern is the latest evidence that the jobs that are coming back are low-paying positions with declining wages. A new analysis by the National Employment Law Project finds that while the majority of jobs lost during and after the recession were in mid-wage occupations, roughly three-quarters of the jobs added since job growth resumed are in low-wage occupations like cashiers and food preparation. To add injury to injury, workers in lower-wage occupations (with median wages under $13.52) have seen a 2.3 percent decline in real wages. The increase in low-wage jobs is in particular sharp relief in Texas, where minimum wage jobs have shot up in the state since 2008.

This post-recession drop in wages for the lowest earners fits a trend of long-term bad news for the American worker. As highlighted by Harold Meyerson , J.P. Morgan Chase reported to its banking clients in July that profit margins of the S&P 500 companies are at their highest levels in almost 50 years—due to cuts in pay and benefits. “Reductions in wages and benefits explain the majority of the net improvement in margins,” wrote the J.P. Morgan CIO. “US labor compensation is now at a 50-year low relative to both company sales and US GDP .”

Given these obstacles, how can we jump-start demand and create the impetus for rehiring that businesses need? With millions of workers looking for jobs that still don’t exist, we must extend unemployment insurance to keep families afloat and keep demand from falling off a cliff. But in order to boost demand, we need meaningful proposals that can help put a little more money in the pockets of millions of Americans who are working but are still financially struggling.

Raise the Minimum Wage

The federal minimum wage is currently $7.25 an hour, or $15,000 per year for a full-time worker. Congress has acted only three times in the past decade to raise wages for the lowest paid workers in our economy, but if the minimum wage had kept up with inflation over the past 40 years, it would be over $10 an hour. Instead, our painfully outdated minimum wage is depressing the pay scales for the entire low-wage economy.

When President Obama campaigned in 2008, he pledged to raise the minimum wage to $9.50 by 2011. According to an analysis by the Economic Policy Institute, this increase would generate more than $60 billion in new consumer spending. Eighteen states and the District of Columbia have recognized the federal minimum wage level is insufficient and have raised their state minimum wage rate. Raising the minimum wage is thus both feasible and an important strategy for boosting consumer demand.

Eliminate Wage Theft

Along with strengthening the minimum wage, we need to ensure our wage standards are enforced. A survey of more than 4,000 low-wage workers conducted by the National Employment Law Project and its partners in 2008 found that a quarter of workers had been paid less than the minimum wage in the preceding week, and three quarters who worked overtime were denied overtime pay. The average losses due to wage theft were about $2,600 from annual earnings of roughly $17,000. In New York, Los Angeles and Chicago alone, working families were estimated to lose $56.4 million a week to wage theft. That’s money that isn’t being recycled into local businesses and the local economy.

Unmonitored, unscrupulous corporations are all too quick to exploit their workforces, and given the terrible state of the economy, workers are in even greater fear of speaking up and defending themselves. In order to stop wage theft, states and cities must strengthen wage laws, and all levels of government must boost enforcement of these laws and penalties for breaking them. NELP’s Winning Wage Justice guide provides 28 policy proposals for state and city policies to fight wage theft, such as informing workers of their wage rates, increasing the damages workers can win if they have been denied pay, increasing the number of wage theft investigators at state labor departments, and lengthening the statute of limitations for a worker to file a complaint. And the blueprint for enforcement reform compiled by NELP and its partners in the Just Pay Working Group points the way to smart, strategic and cost-effective enforcement at the federal level.

Protect Workers’ Rights to Organize and Bargain Collectively

Workers in unions earn more and are more likely to have such benefits as health care and retirement than their nonunion counterparts. Low-wage workers who are able to join a union experience particularly robust improvements in compensation. Unionized workers in the bottom 10 percent of the earnings scale make 21 percent more than their nonunion counterparts. Yet, the share of workers benefiting from union representation has been on decline, sliding to under 11.9 percent of workers from more than a third in the 1960s.

Workers trying to organize too often face severe obstacles when exercising their right to organize, including being threatened by their employer or even fired. But too often these violations go unpunished. The right to organize must be better protected so that workers who want to join a union can do so without threats and intervention from employers.

Our nation’s families and our overall economy are in a deep hole. Millions of jobs disappeared along with our housing value and retirement savings. Much of the growth that led up to this crisis was fueled by increased consumption while incomes stagnated. In order to rebuild a stable economy fueled by sustainable growth, we must make work pay again.

The Austin American-Statesman ran an op-ed Saturday under the head-spinning headline ”Low Texas Wages are Mostly Good News.” No joke.

American-Statesman staff writers Lori Taylor and Heather Gregory noted that Texas had the highest percentage of low-wage workers in the country in 2009 and 2010: more than a half a million workers in the state made the federal minimum wage or less. In this tough economy where so many Americans are struggling to provide their families with housing, food, education and health care, how is that good news?

Taylor and Gregory argue that Texas has a higher percentage of low-wage workers primarily because it is cheaper to live in Texas. “The biggest reason why Texas is a low-wage state,” they write, “is that we have a relatively low cost of living.” As a result, the authors argue that low-wages are sufficient for Texas workers and not a cause to worry.

Yet while Texas may have a lower cost of living than other states, the federal minimum wage is so woefully low and out-of-date that Texas workers making minimum wage are still mired in poverty. The federal minimum wage is $7.25 an hour, or roughly $15,000 a year for full-time work. That is more than $7,000 below the official poverty line for a family of four, and even farther below what a family requires to meet basic needs. The notion that $15,000 is enough to raise a family in any state in this nation is absurd.

But according to Taylor and Gregory, these low wages are acceptable to Texans, otherwise they would not be taking such poorly paid jobs. They write “Research demonstrates that workers are generally willing to accept lower wages in locations — like Texas — where the cost of living is low and there are local amenities that make it a desirable place to live.” According to the authors, it’s not that companies are offering lower wages and workers have little bargaining power to negotiate a better wage—it’s that workers willingly accepting lower pay because they don’t need higher wages.

Yet more than one in six Texans—or 17.2 percent of state residents— lived in poverty in Texas in 2009. That’s the 8th highest rate in the country. Mississippi, which tied Texas in 2010 for having the highest percentage of minimum wage workers, had the highest poverty rate in the nation in 2009. Texas also has the nation’s highest percentage of residents without health insurance; in 2009, more than one in four Texans had no health coverage.

Another reason that Taylor and Gregory say that lower wages in Texas are not a cause for concern is that the workforce is younger than in other states, and young workers’ wages will increase with age. They write, “Nationally, teenagers are five times more likely to earn the minimum wage than are hourly workers over the age of 25, and Texas has a lot of teenagers.” However, Census data show that teens make up an even smaller portion of wage earners in Texas than they do nationwide: nationally 4.1 percent of working people are teens while 4.05 percent of wage earners in Texas are teens. . In fact, it’s not a greater percentage of working teens that are driving low wages in Texas. That makes sense, because we know that while teens are more likely to make minimum wage, more than three quarters of minimum wage earners in the U.S. are adults over the age of 20. Contrary to stereotypes, the overwhelming majority of low-wage workers are adults who contribute a substantial portion of their households’ incomes.

Stepping back to look at the stalled economic recovery, the fact that low wages could be regarded as good news is stunning. As David Leonhardt detailed over the weekend, the main factor preventing an economic comeback is anemic consumer demand. With the bursting of the housing bubble and the disappearance of easy credit, wages play an even bigger role in spurring spending. The downward pressure on wages caused by the economic crisis make a stronger minimum wage even more important—both because even more families are depending on it, and because it is the floor for other wages across the bottom of the labor market.

As the below graph from the Bureau of Labor Statistics demonstrates, the number of Texans making at or below federal minimum wage has shot up since the recession. The number of jobs paying at or below the federal minimum wage in Texas increased by 76,000 in 2010.

With the disappearance of higher paying jobs, more and more families are depending on low-wage jobs to get by. A growing proportion of workers making minimum wage or near-minimum wage will make it harder for Main Street to recover from the severe economic hit they have already taken. This is anything but good news.

In his latest attack on the minimum wage,Casey Mulligan charges in his NYT Economix post that the 2007-2009 minimum wage increases are adding to teen unemployment. He writes that “Many teenagers cannot find work this summer, victims of a weak economy and a situation made worse by minimum-wage laws.”

Mulligan is correct to note that teens have been hit hard by the recession—as the youngest, least experienced members of the workforce, they are among the last to be rehired in economic recoveries. Due to the dramatic disappearance of jobs during the Great Recession, many older workers are taking jobs previously filled by teens: half of college graduates are now filling jobs that don’t require a college degree.

Over the last half century we have seen that teen unemployment rises and falls in proportion to the overall unemployment rate. Since the end of World War II, the teen unemployment rate has ranged from 2.5 to 3.5 the overall employment rate. With overall unemployment at a painful 9.1 percent, May’s teen unemployment rate of 24.2 falls within that historic range.

However, Mulligan’s claim that the minimum wage is exacerbating the teen unemployment problem is simply not true. A recent recent study [pdf] by economists at the University of California examined every state and federal minimum wage increase over the past two decades and found that they did not lead to declines in teen employment. Their analysis included an in-depth examination of minimum wage increases during times of high unemployment—including the Great Recession of 2007-2009— and found that even in these difficult economic periods, increases in the minimum wage did not cause job loss or slow rehiring.

Moreover, the new study demonstrates how a body of previous research – one frequently relied on by business lobbyists who oppose minimum wage increases – inaccurately attributes declines in employment to increases in the minimum wage. It finds that these studies failed to sufficiently account for critical economic factors such as regional economic shocks and long-run job growth differences in low-wage employment across states. When the authors control for these important factors, the claimed negative employment effects disappear.

While the minimum wage has not contributed to job loss among teens, there are other economic trends affecting teen employment which Mulligan ignores. In fact, he fails to note that teen employment has undergone a dramatic decline since 2000—perhaps because it doesn’t fit his claim that the 2007-2009 minimum wage increases are to blame for high teen employment.

Part of this trend in decreasing employment among teens is a result of a positive shift in education—more teens are spending more time fulfilling stricter graduation requirements, taking more advanced courses, and spending time in summer school. Thus, with teens gaining more skills and education, they are investing in becoming more productive contributors to the nation’s economy in the futue.

But in addition to this encouraging development, teens are also confronting a more competitive labor market. In a 2005 paper [pdf], Northwestern economist Andrew Sum details how the 2003-2004 recovery, in a sharp contrast to all other post-war recoveries, saw teen employment continuing to fall, while workers 55 and over dramatically increased their employment. Writing about the 2000-2004 period Sum concludes: “No other age subgroup in the U.S. has been as adversely affected by changing national labor market conditions over the past four years as teens. In fact, all older age groups of workers (those 55 and older) have become employed at higher rates over the past four years while the teen employment rate hit a new historical low. A substantial “age twist” in the structure of employment rates has taken place over the past four years in the nation.” Keep in mind that this dramatic decline in teen employment was occurring at a time when minimum wage had been losing value for 7 years.

Sum describes structural changes contributing to this age-twist—including fewer jobs in manufacturing, little net job growth in retail, and rising competition from older adults as a result of a jobless recovery. In 2001, the first of the baby boomers were turning 55, creating a growing cohort of older workers. Moreover, these workers are increasingly taking “bridge” jobs after their career jobs and before retirement as a result of changes in Social Security, reductions in pensions and retirement savings, and the need to get a job after losing or leaving a previous job.

A 2010 paper from the Bureau of Labor Statistics shows how this increased competition from older workers continued throughout the decade in the occupations where teens are predominantly employed. Most teens work in food preparation and serving occupations, followed by sales and related occupations. From 2000-2009, employment in food preparation and serving increased by 1.1 million. Every age group recorded gains in employment in food preparation and serving occupations, while the number of teens declined by 242,000. Employment in sales and related occupations was little changed from 2000-2009, though teen employment fell by more than half a million, and workers over 55 increased their employment in sales occupations by 822,000.

In addition to the Great Recession, increased competition resulting from a weak job market and a growing number of older workers has been hitting the entire workforce, dealing the sharpest blow to teens. While roughly 10 million jobs were created from 2000 to early 2008 before job losses wracked the economy, teen employment declined by more than 1.5 million.

The crisis in teen employment isn’t a wages problem as Mulligan contends, it’s a jobs problem. There aren’t enough to go around.

As conservatives in Congress exploit the impending vote to on the debt ceiling to further slash government programs that support working and middle class families, a new poll from the Ms. Foundation for Women shows that the American people want the government to play a larger—not smaller—role in improving the economic situation of average Americans.

More than half of respondents agreed that “It is time for government to take a larger and stronger role in making the economy work for the average American.” By contrast, only 36 percent supported the idea that “Turning to big government to solve our economic problems will do more harm than good.”

And while the clamor from conservatives to gut government has heated up in the past year, the poll finds that support for government action to improve the economic situation of American families has actually increased since the poll was conducted last year.

The survey, conducted in March by Lake Research Partners, finds that by a 2-1 margin Americans think government should focus on creating jobs, even if it increases deficits in the short-term. When given the choice between job creation and immediate deficit reduction, two thirds of the public prioritizes jobs. Yet, conservatives in Congress are putting forward plans to do the exact opposite—Congressman Paul Ryan’s budget would cut jobs to reduce spending.

Why this disconnect? How can conservatives push an agenda to slash government programs and threaten jobs, when the American people strongly support government’s role in helping people survive these tough economic times and creating new jobs?

Broadly speaking, conservatives have been able to push through cuts to key programs under the anti-government mantle because the public is acutely aware that much of federal economic policy is squarely aligned with corporate interests and serves to further enhance their power and privilege– bailouts for bankers, subsidies for oil companies, expensive wars in foreign lands. Within this context, attacks on government—and its elite beneficiaries– find fertile ground among the public.

But when conservatives move from their broad brush anti-government rhetoric to attacking specific government programs that actually improve the lives of the American people—like Medicare, Medicaid, and Social Security– their support disappears. Cue the rowdy town halls of the past weeks.

Progressives should feel emboldened not only to defend these deeply popular programs that support working Americans, but to reset the debate in Washington to focus on job creation. As the new Ms. Foundation poll reveals, Americans not only want to defend these key government programs that promote economic security for “the average American,” they want to expand them.

 
The House Republicans have developed a track record of bait and switch when it comes to their approach to job creation.
 
Last week, House Republican leadership released a PowerPoint by Congressman Paul Ryan that they are using to educate the Republican Caucus on their top policy priorities. Ryan laid out the “Jobs Deficit” as the number one challenge facing America in his very first slide. Yet he failed to focus on jobs until the very last slide, which reads: “Keep taxes low; spur job creation and growth.” Not quite the robust plan we need to put millions of Americans back to work.
 
Today Darell Issa tweeted a new Congressional GOP website, AmericanJobCreators.com– a site which implies a focus on job creation. The site consists of a form in which business owners can provide feedback to their elected representatives, but it asks just two questions, neither of them dedicated to job creation: “How is government holding your business back?” and “Please indicate the federal government agencies that oversee the regulations identified in your response (check all that apply).” AmericanJobCreators.com? Maybe AmericansAgainstRegulations.com was already taken.  
 
And today’s Forum on Job Creation held at the Capitol Visitors Center by the Republican House leadership was yet another misdirection play by the GOP. Today’s talk was billed as a summit bringing business leaders from across the country together to discuss job creation, but putting people back to work was barely mentioned. Instead, the hour-long session served as a punching bag for regulations and corporate taxes and a PR blitz for the REINS act, which would require agencies to get approval from Congress for all significant regulatory decisions.
 
And they didn’t let the facts get in the way of a good time, either.  Conference Chairman Jeb Hensarling of Texas asserted that the EPA was now trying to regulate spilt milk on dairy farms as they do for oil spills. This was first declared in an unsigned Wall St Journal editorial and repeated in a newsletter from Congressman H. Morgan Griffith, but the claim has been roundly rebuked as fiction by the EPA and Politifact. But that didn’t stop Hensarling.
 
26:56:
Congressman Hensarling:  It’s almost like you could sell a video tape of bureaucrats gone wild. I wake up and I find out the EPA wants to tell dairy farmers they have to have emergency spill plans like petroleum companies. I mean I heard one farmer, one of my colleagues said, to their dairy farmers, you know we’ve got an emergency plan if we’ve got spilled milk: The emergency plan is this: Here kitty, kitty, kitty. We laugh about it, but that’s a burden on dairy farmers. I have dairy farmers in East Texas. They’re going to now spend money on an emergency plan that’s laughable when they could have been expanding dairy farms and jobs.
 

Video streaming by Ustream

Progressives last week spent a full day talking about jobs at “The Summit on Jobs and America’s Future” at the National Press Club in Washington. Instead of whipped-up frenzy over false or exaggerated regulatory schemes, experts and elected officials discussed concrete federal policies that would lead to the building of a new economy of broad middle-class prosperity. If you missed the summit, you can watch videos of the proceedings at ourfuture.org/jobsummit.

Campaign for America’s Future, in conjunction with the new campaign Health Care for America Now, captures the health insurance industry failing to deliver on its promise to listen to citizens’ ideas about how to create “affordable, high quality health care for every American.” As part of the insurance industry’s new “listening tour” that launched last week, the insurance company front group Coalition for An American Health Care Solution has launched a hotline for individuals to share ideas about how to improve and expand the health care system. Yet, the hotline phone calls go straight to an answering machine, consistent with the industry’s woeful customer service record.

Dear Rick,

Greetings from Buenos Aires. You are always talking about how we need to invest more in our public infrastructure. How ’bout this street sign strategy from the Paris of Latin America?

Anne