News & Commentary

January 11, 2017

Hannah Belitz

Hannah Belitz is a student at Harvard Law School.

In case you missed it, the New York Times has full video and text coverage of President Obama’s farewell speech. In his speech, President Obama praised worker organization as part of “our nation’s call to citizenship,” called for “a new social compact” that, inter alia, “give[s] workers the power to unionize for better wages,” and warned that “[i]f every economic issue is framed as a struggle between a hardworking white middle class and an undeserving minority, then workers of all shades are going to be left fighting for scraps while the wealthy withdraw further into their private enclaves.”

Also at the New York TimesNoam Scheiber covers two new studies on raising the minimum wage.  The first study found, consistent with the growing body of work on minimum wage, that increasing wages does not contribute to a decline in hiring.  However, the study also showed that when employers were forced to pay more in wages, they hired more productive workers, so that the overall amount amount of money employers spent on each job did not change substantially.  If this pattern were to apply across the economy — and the study’s author, as well as other economists, note that there are many reasons it might not — a higher minimum wage could result in low-skilled workers losing their jobs to higher-skilled workers.  The second study suggested that some employers may go out of business in response to a rising minimum wage.  The study, which examined restaurants in the San Francisco area, found that many poorly rated restaurants went out of business after a minimum-wage increase took effect.  Highly rated restaurants, by contrast, appeared “to be largely unaffected,” and overall there was “no substantial rise in restaurant closings after a minimum-wage increase.”

Politico and CNBC report that Andy Puzder’s confirmation hearing for Secretary of Labor may be delayed until February.  Puzder was originally scheduled to testify before the Senate Committee on Health, Education, Labor and Pensions on January 17, but the hearing will now be moved and may not take place until after Betsy DeVos’ hearing, which has also been delayed.

According to the Wall Street Journal, automobile makers are pushing back against Donald Trump’s assertion that their overseas factories hurt U.S. employment.  At Detroit’s annual motor show on Monday, automobile executives “rattled off a list of statistics” supporting claims that “reliance on Mexico is limited.”  They also warned that uncertainty over Trump’s trade policies could wreak havoc on the automobile industry.  As Fiat Chrysler’s Chief Executive put it, “We need clarity.  None of us have had a tweeting president before. It’s a new way of communication, and we’re going to have to learn how to respond.”

In international news, workers for the London Underground staged a 24-hour strike on Monday.  The New York Times reports that the strike “forced the evacuations of subway stations, left buses dangerously crammed and made thousands of commuters walk for hours to get to and from work.”  City officials have been engaged in a “long-running dispute” with workers over the closing of ticket offices, and according to union officials, the strike came as a result of Transport for London’s failure to provide “a serious set of proposals” to deal with stations that had insufficient staff to be run safely.  London’s mayor criticized the strike as “completely unnecessary,” saying that the disagreement should have been resolved in negotiations, not in a strike that caused Londoners to have a “miserable journey.”


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