Study: 7 in 10 Minimum Wage Workers Leave Their Jobs Within a Year

Employers who pay workers the federal minimum wage of $7.25 an hour encounter a 70% annual turnover in those employees, a rate more than double that of the broader workforce according to new analysis published by one of the nation’s largest small-business payroll outsourcing firms.

The same analysis found that employee turnover rates decline dramatically with wage increases. At $10 an hour, the annual turnover rate is 55%. At $15 an hour, it’s just 41%.

The cloud-based HR services provider Gusto conducted this research based on data from tens of thousands of its clients across the nation.

According to the Work Institute’s 2018 Retention Report, “The cost of turnover, voluntary or involuntary, is estimated at one-third of a worker’s (annual) salary.” Voluntary worker separation cost U.S. companies an estimated $600 billion last year.

Senator Tartaglione has introduced legislation, SB 12, that proposes to raise Pennsylvania’s minimum wage above the federal level. The Commonwealth is one of just 21 U.S. states that have not raised their minimum wages above $7.25. The General Assembly has not adopted new minimum wage legislation in more than 13 years.

Congress last raised the nation’s minimum wage in 2009. Earlier this year, the U.S. House of Representatives adopted the Raise the Wage Act, which would increase the national rate incrementally to $15 by 2025. The U.S. Senate has not acted on the legislation.

Senator Tartaglione’s legislation proposes to raise Pennsylvania’s minimum wage to $12 this year and to $15 by 2025. It is awaiting action in the Senate Labor & Industry Committee.

Minimum Wage Raises Gaining Traction in States, Cities Around the Nation

More than 760,000 Floridians have signed a petition to raise the state’s minimum wage from $8.46 an hour to $15 by 2026. The number of signatories is almost seven times the winning margin in Florida’s 2016 general election for U.S. president.

The Sunshine State is among numerous U.S. states and municipalities, including some perhaps unexpected areas, where efforts to raise the minimum wage have gained momentum in recent weeks and months.

According to the Pensacola News Journal, a political committee known as Florida for a Fair Wage had submitted 763,330 valid petition signatures to the state as of October 21. The committee needs at least 766,200 signatures to get a proposed constitutional amendment on the state’s November 2020 election ballot. The committee has until February to obtain the remaining signatures.

In Texas – where, like Pennsylvania, the minimum wage mirrors the federal rate of $7.25 and where Republicans control the state legislature – Houston Mayor Sylvester Turner issued an executive order on October 9 mandating that workers at the city’s major airports make at least $12 within two years. That includes George Bush Intercontinental Airport.

According to the Houston Chronicle, the order requires all current and future contractors including vendors and restaurants to start paying at least $10.39 this year and $12 by 2021. An estimated 8,000 workers will be directly affected.

“Houston municipal workers have made $12 since 2015, but local airport workers typically are contracted by airlines that do not have to pay more than the current, $7.25 minimum wage,” the newspaper reported.

Earlier this year, Denver City Council unanimously voted to raise the minimum wage for all city workers to $15 after Denver International Airport workers petitioned for the measure. This month, city officials are hosting a series of public meetings for the community to discuss a proposed $15 minimum wage for all workers in Denver, including those in the private sector.

The effort follows the Colorado legislature’s recent revocation of a “preemption” law that prevented the state’s municipalities from adopting their own minimum wage laws.

Mack Employees Return to Work as UAW Announces Tentative Four-Year Agreement

About 3,500 Mack Trucks employees were expected to return to work on October 25 as negotiators from the United Auto Workers announced they had reached a tentative four-year contract agreement with the heavy truck manufacturer.

About 2,400 of those workers are employed at the company’s Lower Macungie Township, Lehigh County, plant where all Mack trucks for the North American market are assembled, according to the Morning Call.

The strike began at midnight on October 13, 10 days after the previous Mack-UAW contract expired. The walkout lasted for 12 days, surpassing the nine-day strike that Mack employees held in 1984.

Last week, a union official told the Morning Call that job security was the main point of contention in the latest negotiations. UAW leaders wanted the company to commit to keeping all heavy-duty truck assembly for North America in the Lehigh Valley. Neither side released details of the tentative pact.

UAW Secretary-Treasurer Ray Curry stated via the union’s website that members “have achieved significant gains toward fair pay, benefits and job security protections. … Ultimately it is our members’ contract, and UAW Mack members will make the final decision as they vote.”

Mack also employs UAW members in Middletown, Pennsylvania; Hagerstown, Maryland; Baltimore, Maryland; and Jacksonville, Florida.

Meanwhile, about 48,000 UAW members employed by General Motors remain on strike as the union conducts its ratification process on a tentative agreement with the nation’s largest automaker.

Previously, the UAW announced it would conduct informational meetings with members on the local level through October 25 in advance of a rank-and-file vote on the proposed contract, which includes wage increases and signing bonuses for members and maintains their current health insurance plan. Yet, the tentative agreement would allow GM to permanently close three U.S. plants.

Amazon Breaks Ground on Massive Allegheny County Fulfillment Center

Amazon broke ground on October 23 on a new 86-acre, 1 million-square-foot fulfillment center in Allegheny County that will be the company’s largest facility in Western Pennsylvania and will employ more than 800 people, according to KDKA.

The project comes amid what CNBC has described as growing “momentum to organize” among many of the company’s more than 650,000 worldwide employees.

“Three big unions are among those talking to Amazon workers – the Teamsters, the United Food & Commercial Workers Union, and the Retail, Wholesale and Department Store Union,” CNBC reported. “Recent worker protests point to organizing efforts.”

For example, in July workers at a fulfillment center in Minnesota went on strike for six hours during the company’s annual Prime Day promotion to protest working conditions and wage practices. Amazon workers in Germany also went on strike that day. Last October, the company announced it would increase its minimum wage to $15 an hour. But it phased out stock benefits and cash bonus incentives for warehouse workers, CBS News reported.

A 2018 company training video for Whole Foods stores managers was leaked to the news media. In it the company allegedly stated via an animated character, “We are not anti-union, but we are not neutral either. We do not believe unions are in the best interest of our customers or shareholders or most importantly, our associates,” according to CNBC.

The Pittsburgh-area facility “will be large enough to ship 200,000 unique items from under one roof,” KDKA reported. It’s expected to open in time for the 2020 holiday shopping season. It will be the company’s 11th fulfillment center and 15th operations facility in the state. Amazon employs about 10,000 Pennsylvanians.

Hundreds of Kentucky Miners Finally Getting Back Pay Months After Sudden Layoff

The non-union Kentucky miners who blockaded a coal train for two months last summer to protest weeks of unpaid wages are finally get their missing paychecks, along with a new appreciation for the power of unity.

Under a new bankruptcy court settlement, Blackjewel LLC will pay about $2 million in back wages to more than 400 coal miners in Kentucky. That’s in addition to more than $3 million to almost 700 miners in Virginia and West Virginia, payments that were previously approved by the court.

The Lexington Herald-Leader reported that the Harlan County protest began in early July shortly after Blackjewel, which was the nation’s sixth-largest coal mining firm, unexpectedly filed for bankruptcy and caused the paychecks it issued on June 28 to bounce, leaving its 1,100 miners suddenly unemployed and many of them with over-drawn bank accounts.

About a half-dozen miners initially assembled on the railroad to block the company from shipping a million-dollar load of coal. The demonstration quickly grew and garnered the attention of national and international news media ranging from CBS to Rolling Stone, which reported on the outpouring of community support for the protestors as well as their personal financial crisis and broader issues affecting their industry.

The protestors disbanded last month after about two months on the tracks, but not before labor activists, local politicians, and the Kentucky governor visited them, and the U.S. Department of Labor intervened, according to the New York Times.

“We were trying to get our point across: You delay our pay, we’ll delay your train,” one miner told the Times. “We just thought we were going to be five guys blocking a train – it was going to be local news and that was it.”

Another miner told the Herald-Leader it was a matter of “realizing that we can all stand together and be powerful. It’s not just one or two guys (saying), ‘We want our money.’ We are here to say, ‘We are standing for what we believe in and what we’ve worked for.’ … I’m glad it’s gotten as big as it is because we are definitely making a point.”

September 2019 PA Jobs Update

Pennsylvania’s seasonally adjusted unemployment rate rose to 4.0% in September 2019, up 0.1% from August’s rate of 3.9%. Over the month, unemployment rolls increased by 5,351 individuals, with total unemployment rising above 260,000. State unemployment statistics for the month are as follows:

• Total Unemployment – 260,232
• Change Over Month –   UP   5,351
• Change Over Year –   DOWN   9,631
• Change Over Gov. Wolf 1st Term –   DOWN   78,565
• Change Over Gov. Wolf to Date –   DOWN   84,632
• Rate Change Over Month –   UP   0.1%
• Rate Change Over Year –   DOWN   0.2%
• Rate Change Over Gov. Wolf 1st Term –   DOWN   1.3%
• Rate Change Over Gov. Wolf to Date –   DOWN   1.4%

As indicated above, total unemployment’s rounded percentage of the labor force, or unemployment rate, rose over the month (rate = unemployment / labor force). The labor force is the number of employed individuals combined with the number of unemployed individuals actively searching for work. Labor force growth can be a sign of a strengthening economy from more people working and/or more individuals searching for jobs. In September 2019, PA’s labor force rose for a third consecutive month, increasing by 12,100 individuals, a combination of total employment* rising by 6,749 and unemployment up by 5,351 as noted above. Over Governor Wolf’s first term, the state’s labor force grew by 58,755 (employment +137,320 – unemployment -78,565) and is up 89,658 (employment +174,290 – unemployment -84,632) over both terms thus far. State labor force statistics for the month are as follows: 

• Total Labor Force – 6,491,646
• Change Over Month –   UP   12,100
• Change Over Year –   UP   52,121
• Change Over Gov. Wolf 1st Term –    UP   58,755
• Change Over Gov. Wolf to Date –   UP   89,658

PA non-farm* job rolls fell by 5,000 from August to September 2019, with total employment falling to 6,044,500. Year-over-year (September 2018 to September 2019), a total of 30,200 new non-farm jobs have been added. Over Governor Wolf’s first term (Jan. 2015 – Jan. 2019), a total of 223,000 new non-farm jobs were added, roughly 71,000 more than were added over the four-year term of the prior Corbett Administration. The addition of 223,000 non-farm jobs over Governor Wolf’s first term ranked the commonwealth 35th out of 50 states for new percentage growth, an improvement from it’s ranking of 49th in the same survey over Governor Corbett’s term. Non-farm job growth has slowed in 2019 with only 6,500 new jobs added as of September 2019 (the lowest September year-to-date total since 2009), bringing total growth over both of Governor Wolf’s terms thus far to 229,500. State non-farm employment statistics for the month are as follows:

• Total Employment – 6,044,500
• Change Over Month –   DOWN   5,000
• Change Over Year –   UP   30,200
• Change Over Gov. Wolf 1st Term –   UP   223,000
• Change Over Gov. Wolf to Date –   UP    229,500

*Total employment for labor force provided by U.S. Census Household survey. The separate BLS Establishment survey measures non-farm jobs only.

State Job Growth Rankings Under Wolf

(Ranked by seasonally adjusted growth of non-farm jobs; Source: U.S. Bureau of Labor Statistics; figures represent thousands.)