Strengthening labor standards and institutions to promote wage growth


For most of the period since the 1970s the United States has suffered from two trends: stagnant wages for most workers, and rising inequality. While these trends have a number of causes, nearly all involve reductions in the relative economic leverage, or bargaining power, of low- and moderate-wage workers. This paper focuses on one particular set of factors: the erosion of labor standards, institutions, and norms. I show how this erosion has been facilitated by and has exacerbated the problem of low worker bargaining power, and propose a suite of remedies to help strengthen worker bargaining power and increase wages. These remedies include increasing the real value of the minimum wage and the overtime salary threshold, passing fair scheduling laws, boosting unionization, supporting joint employer standards, passing paycheck transparency laws, passing laws that make W-2 the default employment status, limiting the use of non-competes, banning the use of mandatory arbitration for statutory labor and employment claims, ensuring immigrant workers have full labor rights, boosting enforcement of labor standards, and leveraging procurement dollars to boost compliance.