“Three bras and a bottle of Bombshell”

That’s what Mirella Casares gets as her “benefit” package from working at Victoria’s Secret. The package doesn’t include health or retirement contributions.

As it turns out, Casares is not alone. Far from it.

Many American workers, because of the precarious nature of their jobs and household finances, are concerned (as reflected in the word chart above) with “money,” “bills,” “health,” and “retirement income.”

According to the Report on the Economic Well-Being of U.S. Households in 2016 by the Board of Governors of the Federal Reserve System (pdf), about 30 percent—or approximately 73 million adults—are either finding it difficult to get by or are just getting by financially. Even more, almost half (44 percent) of adults say they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money.

One of the major reasons is American workers simply aren’t being paid enough. That’s why more than half (53 percent) are forced to spend more than they earn and therefore don’t have the ability to save. They also face extraordinary health (approximately 24 million people, representing 10 percent of adults, are carrying debt from medical expenses that they had to pay out of pocket in the previous year) and education expenses (over half of adults under age 30 who attended college took on at least some debt while pursuing their education). Therefore, they have to borrow money and rely on family and friends to make ends meet.

The other reason is because of income volatility. About one third of American adults indicate that their monthly income varies either occasionally or quite a bit from month to month. Thirteen percent of adults (40 percent of those with volatile incomes) report that they struggled to pay their bills at least once as a result of income volatility. One of the major causes of that volatility is variable work schedules: seventeen percent of workers have a schedule that varies based on their employer’s needs, and just over half of those with a varying work schedule are usually assigned their schedule three days in advance or less.

One of the consequences of being underpaid and subjected to variable work schedules dictated their employers is American workers have found it necessary to turn to multiple jobs and informal work. According to the survey, 9 percent of all adults, and 15 percent of those who are employed, report that they worked at multiple jobs. In addition, 28 percent of all adults report that they or their family earned money through one or more of informal and occasional activities (such as babysitting, selling at flea markets, and performing tasks through online marketplaces) in the prior month.

The United States is now eight years into the recovery from the Great Recession and the benefit to American workers consists of little more than 3 bras and a bottle of perfume.

Chart of the day

According to the AFL-CIO Executive Paywatch project, in 2016, CEOs of S&P 500 Index companies received, on average, $13.1 million in total compensation. In contrast, production and nonsupervisory workers earned only $37,632, on average, in 2016—a CEO-to-worker pay ratio of 347 to 1.

Above is a list of the top twenty CEOs, ranging from Kenneth Lowe of Scripps Networks Interactive at over $28 million to Sundar Pichai of Alphabet, who managed to capture over $100 million in executive compensation.

Nice job, if you can get it

Federal government jobs are a pretty good deal, especially for workers without a professional degree or doctorate.

According to a recent study by the Congressional Budget Office (pdf), wages for federal workers with a high-school diploma or less are 34-percent higher than comparable workers in the private sector. And, when you include benefits (especially defined-benefit retirement plans), their total compensation is 53-percent higher. For federal workers with a bachelor’s degree, the numbers are 5 percent (for wages) and 21 percent (for total compensation). Only federal workers with a professional degree or doctorate are paid less than their private-sector counterparts (by 24 percent), resulting in a total compensation that is also less (by 18 percent).

The problem is, it’s not easy to get those jobs. In contrast to what many people think (my students included), federal employment (excluding the U.S. Postal Service) makes up only 1.4 percent of civilian employment in the United States—just a bit higher than before the Second Great Depression (when it stood at 1.3 percent) but far below what it was in the late 1960s (when it was 2.8 percent).

So, to all those who complain about the growth of the “government bureaucracy,” they should be reminded of the small percentage of total employment represented by federal workers—and the fact that most federal employees (60 percent) work in just three departments in the executive branch: Defense, Veterans Affairs, and Homeland Security.

And for those who argue that federal employees are compensated better than their private-sector counterparts, there’s an easy solution: raise the pay of private-sector workers and improve their benefits!

Only in America

Apparently, it’s big news that California Governor Jerry Brown [ht: sm] just signed a bill that, for the first time, means farmworkers in that state will be entitled to the same overtime pay as most other hourly workers

But this is the United States. So, the law only takes effect beginning in 2019. And it will lower the current 10-hour-day threshold for overtime by half an hour each year until it reaches the standard eight-hour day by 2022. (It will also phase in a 40-hour standard workweek for the first time.) And the governor will be able to suspend any part of the process for a year depending on economic conditions.

But, still, it’s a vast improvement over what exists now—in California and across the United States.

In California, employers currently must pay time-and-a half to farmworkers after 10 hours in a day or 60 hours in a week. That only happened beginning in 1976, since before that (dating back to 1941), the California Legislature exempted farmworkers from earning any overtime pay.

And U.S. federal law is even worse. The federal Fair Labor Standards Act of 1938, which established minimum wage and overtime standards, excluded all agricultural workers, the majority of whom at the time were African American.

Even now, the amended Fair Labor Standards Act, which states that all workers (including farmworkers, except those employed on “small farms”) need to paid at least the federal minimum wage, still exempts farmworkers from the overtime pay requirements that apply to all other hourly workers.

Ah, what a country!

Chart of the day

 

According to the AFL-CIO Corporate Pay Watch, in the state of Indiana, the 2014 CEO to average worker’s pay ratio was 101:1 (for corporations in the Russell 3000) and 306:1 (for corporations in the S&P 500).

In the nation as a whole, the ratio (for corporations in the S&P 500) was 373:1, which surpassed the ratio for 2013 (331:1)—both of which were much, much higher than the ratio in 1980 (42:1).

The average CEO compensation of Russell 3000 companies in 2014 was $5,504,432. As it turns out, the industry with the highest CEO pay was Tobacco Products ($13,061,671), followed by Railroad Transportation ($12,526,083), Petroleum Refining ($12,502,981), Communications ($10,769,054), and Hotels ($10,058,029).

As for the Security and Commodity Brokers, Dealers, Exchanges, and Services industry (where financial institutions like Goldman Sachs are located), the average CEO pay was “only” $8,102,970—ranging from $105,295 (for Joe Mansueto of Morningstar) to $88,518,411 (for Mario J. Gabelli of Gamco Investors, Inc.).

Clearly, a large portion of the surplus workers create ends up in the pockets (and portfolios) of the CEOs of the nation’s largest corporations.

Cartoon of the day

Special mention

 

Cartoon of the day

Special mention