1 making labor markets work jon forman alfred p. murrah professor of law university of oklahoma...
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1
Making Labor Markets Work
Jon Forman
Alfred P. Murrah Professor of Law
University of Oklahoma
First Annual Colloquium on Current Scholarship in Labor & Employment Law
Milwaukee, Wisconsin
October 27, 2006
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Share of Household Income
0
10
20
30
40
50
60
Poorest 20% Middle 20% Richest 20%
perc
ent
Free market After taxes & transfers
3
Average Annual Earnings of Full-time Workers, 2004
Doctors $128,689
Lawyers 105,716
Economists 71,672
Nurses 53,289
Police 50,063
Auto mechanics 38,967
Secretaries 32,349
Garbage collectors 31,284
Orderlies 20,959
Waiters and waitresses 8,789
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Distribution of Earnings, 2004
$15,600 $26,000 $36,000$50,000
$84,000
$0
$100,000
$200,000
$300,000
$400,000
0 10 20 30 40 50 60 70 80 90 100
Percentile
Ear
ning
s
5
Distribution of Workers by Earnings Category, 2004
0
1
2
3
4
5
6
7
8
9
10
11
12
< 0 15 30 45 60 75 90 105 120 135 150 165 180 195 210 225 240 >250
Earnings (thousands of dollars)
Per
cent
of
wor
kers
6
Wages by Percentile, 1979-2003
$0
$5
$10
$15
$20
$25
$30
$35
$40
1979 1985 1991 1997 2003
Year
Dol
lars
per
hou
r 20
03$)
95th percentile
90th percentile
80th percentile
50th percentile
20th percentile
10th percentile
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Health Coverage of the Nonelderly, 2004
Source of Coverage millions percentage
Total population 255.9 100.0
Employment-based coverage
161.2 63.2
Individually Purchased 17.0 6.6
Public 45.5 17.8
Medicare 6.2 2.5
Medicaid 34.2 13.4
Military health care 8.1 3.2
No health insurance 45.5 17.8
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Clusters without Coverage
• Employees of small businesses• Workers who lose their jobs• Workers who decline employer coverage• Low-income parents• Low-income childless adults• The near elderly• Young adults• Children• Immigrants
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Transition to Expanded Coverage
• Tax Changes: cap the exclusion for employer-provided insurance at a fixed dollar amount and gradually replace it with a tax credit
• Employer Mandate: require employers to offer a plan, and automatically enroll workers
• Individual Mandate: require workers to get coverage
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Persons in Jail and Prison 1980-2004
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
1980 1984 1988 1992 1996 2000 2004
Year
Nu
mb
er
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Rate of Return to Investment in Education as a Function of Age
0 Age
Rat
e of
re
turn
12
Minimum-Wage Earnings versus Poverty Levels, 1960-2006
$0
$5,000
$10,000
$15,000
$20,000
$25,000
1960 1970 1980 1990 2000Year
Ear
ning
s
Poverty level, familyof three
Poverty level, familyof four
Annual minimumwage earnings
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$2,000 per Worker Earned Income Tax Credit, With or Without a Phase-out
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$0 $20,000 $40,000 $60,000 $80,000
Earned income
Cre
dit A
mou
nt t
$2,000 per worker credit $2,000 per worker credit with phase-out
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Making Labor Markets Work
• Make Health Care Work• Vigorously Enforce Discrimination Laws• Reduce Incarceration Levels• Make Education and Training Work• Raise the Minimum Wage• Expand the Unemployment Insurance Program• Promote Unionization• Make Full Employment a Reality• Other ideas
– Regulate executive compensation– Restrict immigration– Promote worker safety