US Labor secretary focusing on income inequality
What gets US Labor Secretary Thomas E. Perez out of bed in the morning? Statistics like this: The unemployment rate for black men remains nearly double that of white men.
That’s just one measure of the inequality that Perez and his boss, President Obama, said has become one of the most pressing issues facing American society and a focus of the administration’s economic policies. Nearly five years after the recession ended, many low- and middle-income families are still struggling with joblessness and stagnant wages, even as those at the top of the income scale prosper, he said.
“Too many people are working hard and falling further behind,” said Perez in an interview with Boston Globe editors and reporters this week.
Perez was in Boston Wednesday and Thursday as part of a national, campaign-style tour to promote Obama’s proposal to raise the federal minimum wage to $10.10 from $7.25 an hour. He met Thursday in Cambridge with seven small business owners who told him that they already pay more than minimum wage — up to $14 an hour — because it helps them attract and retain productive workers.
“It’s not just Tom Perez saying this, and it’s not just low-wage workers saying this,” Perez said in a brief interview after the event at Cambridge Naturals, a natural health store in the Porter Square Shopping Center. “It’s business owners who are saying this.”
Obama has also sought to boost workers’ earnings by expanding overtime. In one of the most far-reaching executive actions this year, Obama signed a presidential memorandum Thursday directing the Labor Department to devise new overtime rules to make more workers eligible for time-and-a-half pay.
New rules is unlikely to take effect until 2015. Advocates of new overtime rules say millions of workers could benefit. Critics say it could burden small businesses and other companies and cost jobs.
Perez, named labor secretary in July after nearly four years as assistant attorney general for civil rights, has become a key public face in the Obama administration’s push to raise wages. Perez, who received a master’s in public policy and law degree from Harvard University, also served as the principal adviser on civil rights, criminal justice, and constitutional issues, to the late senator Edward M. Kennedy.
In the Globe interview, Perez addressed a broad range of problems facing the labor market, including historically high numbers of long-term unemployed.
Perez said the nearly 4 million Americans who have been unemployed for six months or more is a key concern. That is more than double what would typically be expected following a recession.
Perez didn’t offer insight into what may be causing the problem, but said the Labor Department needs to work to ensure that these people are connected with the national system of career centers, which operate in partnership with states and offer a variety of employment services. Government programs that help subsidize wages for employers who hire people who have been out of work for long periods or need career retraining have also helped.
Federal funding for career centers was reduced as a result of the automatic budget cuts known as sequestration. Extended jobless benefits that helped long-term unemployed workers make ends meet as they looked for work were renewed by Congress after the program expired near the end of last year.
“There is insufficient interest among some in Congress to bring these programs to scale,” Perez said.
But raising awareness of long-term unemployment can help, he said. Perez recalled a chief executive of a major bank who told him that his company changed its rules surrounding credit checks of prospective employees after realizing that many people may have damaged credit as a result of lengthy unemployment.
“He said they were screening out a lot of good people,” Perez said. “We need to get the message to all [human resources] directors.”
Perez said there should be more opportunity for apprenticeships as a way to provide career paths to those without four-year college degrees. Manufacturing, for example, has a demand for skilled workers who have more than a high school diploma, but less than a bachelor’s degree.
One barrier to these types of programs is the stigma connected with vocational training, even though many students move into jobs that can pay $32 an hour or more.
“There’s a bright future for people who want to work with their hands,” Perez said, noting that such wages can vault a family into the middle class.
For the nation’s poorest working families, an increase to the minimum wage would help lift them out of poverty, Perez said. Many economists say a higher minimum wage would lead to increased consumer spending, which drives the economy.
Increasing the minimum wage has emerged as a key issue both nationally and in Massachusetts. Here, the Legislature is considering increasing the state minimum wage, now $8 an hour, to $10.50.
The Senate has already passed a bill to increase the state’s minimum wage. On Thursday, Massachusetts House Speaker Robert A. DeLeo, a Winthrop Democrat, said he supported an increase to $10.50 by the middle of 2016.