Sen. Brown: “It’s not businesses who drive the economy –it’s workers”

In a speech given at Columbus, Ohio, US Senator Sherrod Brown unveiled a plan for addressing the lack of wage growth in the US economy.

“Hard work doesn’t pay off like it used to,” said Brown. “Wages and benefits have declined or stagnated for American workers for decades. People earn less, people can’t save for retirement, and people feel less stable–all while working harder and producing more than ever before. We need to update our economic policies, our retirement policies, and our labor laws to reflect today’s reality.”

Brown’s plan, entitled “Working too Hard for too Little: A Plan for Restoring the Value of Work in America,” calls for enacting legislation that:

  • raises wages and benefits
  • makes it easier for workers to join unions
  • provides new ways of saving for retirement and
  • encourages more companies to invest in their workforce.

We need to change the way we think about the American economy,” said Brown. “It’s not businesses who drive the economy –it’s workers. We grow the economy from the middle class out. If work isn’t valued, Americans can’t earn their way to a better life for their families–no matter how hard they work. And without a strong, growing middle class to consume goods and services, our economy simply can’t grow.”

Brown’s plan calls for raising the minimum wage to $15 an hour and expanding the number of people eligible to receive overtime pay.

Expanding overtime payments would raise pay for millions of middle-income workers.

Brown said that Kevin Gee, one of his constituents, is an example of a worker who would benefit from expanding overtime benefits.

Gee works about 50 or 60 hours a week, makes about $40,000 a year, but because of the way that he is classified by his employer, Gee isn’t paid time and one-half for the hours he works above the standard 40-hour work week.

Brown’s plan extends overtime coverage to workers like Gee.

In his speech, Brown said that the nature of work is changing, but labor standards aren’t keeping up with these changes.

“More businesses use temp workers and contractors and subcontractors–and they pay lower wages and provide less job security, fewer benefits, and fewer legal protections,” said Brown.

Brown’s plan would extend more protections to temporary workers and punish employers who misclassify employees to avoid paying standard benefits such as social security, workers compensation, and unemployment insurance.

Another way that the nature of work is changing is that more workers are working in the service sector.

These service sector jobs for the most part are low-wage jobs.

One of the surest ways to raise wages is for workers to form unions and bargain together for better pay and benefits, but unionization in the service sector is quite low.

Service sector unionization is low because when workers do try to form unions, their bosses often use fear and intimidation to prevent them from doing so. When workers do form unions, bosses use legal technicalities to delay bargaining with workers.

“We need to update our labor laws to ensure that workers trying to form unions don’t face discrimination, and that companies aren’t able to tie up unionization efforts in legal challenges,” said Brown. “Modernizing our labor laws means recognizing the right of all workers–even those in alternative work arrangements–to collectively bargain for higher pay and better benefits.”

Brown also said that companies that pay poverty wages that make their workers eligible for government assistance such as food stamps and Medicaid should pay a penalty.

“My plan creates a Corporate Freeloader Fee, for all corporations whose pay is so low that taxpayers are forced to subsidize their workers,” said Brown. “It’s simple–if you choose to pay your workers so little that they are disproportionately forced onto government assistance, then you need to reimburse American taxpayers. This will save taxpayers money, and give companies an added incentive to invest in one of their greatest resources: their human capital.”

On the other hand, Brown’s plan rewards employers that do the right thing.

“My plan would give companies a tax break when they commit to staying in the US, to hiring in the US, and to providing good wages and fair benefits for workers,” said Brown.

Brown said that his plan carries some cost for corporations, but he asked, “what about the cost of not raising wages? We’ve seen what years of stagnant wages and a fraying safety net have cost our country and its millions of workers.”

Brown called for universal solutions to the wage stagnation problem, not individual solutions that target niche sectors.

My plan is aimed at making “life better for all workers. Every single one of them,” said Brown. “That is the heart of populism. Populism is for the people–not these people, or those people, but all people. It is not about appealing to some by pushing others down. It’s about lifting everyone up.”