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Data: BLS via RSM US; Chart: Axios Visuals 

The federal minimum wage is now just 28% of average hourly earnings. That's just half its level in 1968, when the ratio was 54%. 

Why it matters: The federal minimum is so low — well below the living wage in all states — that it has at this point lost most of its power as an anchoring mechanism. 

How it works: Employers like to pay the minimum wage not only because it's the lowest wage they can get away with, but also because it's a wage that the government is explicitly telling them is acceptable. 

$7.25 per hour is so low, however, as to be incompatible with dignified hiring. Fewer than 2% of workers now earn the minimum wage or less.  

That's how a new consensus has arrived that $15 is, as Joe Brusuelas and Tuan Nguyen of RSM put it, "the de-facto minimum wage."

By the numbers: $15 per hour is higher, in real terms, than the actual minimum wage has ever been. But at 58% of average hourly earnings, it's a perfectly reasonable baseline.

The bottom line: As David Card showed, higher wages don't need to mean less employment. 

As Brusuelas and Nguyen write, while higher wages do tend to cause marginal price inflation, "it’s hard to argue that bringing working families above the poverty level would damage the economy."

How the minimum wage lost relevance

The federal minimum is so low that it has at this point lost most of its power as an anchoring mechanism.

Minimum wage

A chart showing minimum and average hourly earnings in the U.S. 

Jobs

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

Chart showing monthly job quits as a share of total employment

New government jobs data released Tuesday helps paint a clearer picture of the impact the Delta variant had on the stalled jobs recovery in August. In a nutshell, more people quit their jobs, and companies pulled back on job openings.

Why it matters: The number of new jobs created in August (366,000) was a stark slowdown from July’s 1 million — and a reality check for investors and economists.

This week's Job Openings and Labor Turnover Summary (JOLTS) report puts meat on the bones of how that played out.

By the numbers: The rate of quits increased to its highest level ever, at 2.9% of the workforce.

Layoffs remained at record lows as companies tried to hold on to employees — but notably, they pulled back on new job openings.

Total job openings receded to 10.4 million, from a record high 11 million in July.

Go deeper: In leisure and hospitality, one of the sectors most impacted by the Delta variant, the pullback was pronounced.

Quit rates there were more than double the overall average. And employers cut back on job openings by 10.5%, twice the 5% retreat across all industries.

The bottom line: "The tepid employment growth we have seen in recent months has been at least partially the result of a decline in hiring appetite. The question is whether this is a temporary speed bump due to a surge in COVID cases or if demand will continue to slacken in the months ahead," wrote Indeed Hiring Lab's Nick Bunker in a research note.

Record number of U.S. workers quit their jobs in August

The rate of quits increased to its highest level ever, at 2.9% of the workforce.

Employment

A chart showing monthly job quits as a share of total employment. 

Sneak Peek

Axios Sneak Peek

The Biden administration is working with private companies, port officials and unions to keep the Port of Los Angeles running 24/7 in order to reduce the backlog of cargo ships floating in the Pacific, according to administration officials. 

Why it matters: With the International Monetary Fund citing supply chain problems as a major factor in cutting global growth projections, the White House is scrambling to address some of the sources of the problem at U.S. ports. 

The delays caused by shipping logjams could leave holiday shelves bare, with disruptions affecting everything from retail, to remodeling to rental cars.

Driving the news: The White House is on Wednesday convening business and union leaders, as well as port officials, to discuss the delays at ports and the congestion across the transportation systems.

President Biden will meet with leaders from the ports of Los Angeles and Long Beach and the International Longshore and Warehouse Union to discuss how they address the challenges in Southern California. 

They will announce public and private commitments to improve operations at the Ports of Los Angeles and Long Beach, which together are the point of entry  for 40 percent of containers to the U.S.

What to watch: The goal is to accelerate the shipments of goods throughout the country. 

Walmart, UPS, FedEx, Samsung, The Home Depot and Target will all be part of the effort.  

Between the lines: The International Longshore and Warehouse Union (ILWU) has agreed to have its members work those extra shift to expand capacity. 

The Port of Los Angeles will expand to 24/7 operations following the Port of Long Beach last month. 

Go deeper: Era of depletion and disruption

Biden works to expand Port of L.A. to 24/7 operations

President Biden will meet with port leaders today to address the shipping logjam problem.

A surfer waits for waves at Huntington Beach, California on Setember 25, 2021 as container ships wait offshore. Photo: Frederic Brown/AFP via Getty Images

Biden administration

President Biden has made the COVID-19 crisis and a post-Trump return to national unity and traditional democratic ideals his top priorities. From vaccinations to stimulus to schools, Biden is seeking bipartisan compromise while showing a willingness to use executive authority and bare Democratic majorities in the U.S. House and Senate to implement his policies. Republican leaders are navigating deep party divisions over if and how to move beyond former President Trump.

Politics & Policy

Closer

Axios Closer

Airbnb global head of hosting Catherine Powell says the "hosting economy" will include as many people as the creator economy does.

The big picture: The creator economy — businesses built by independent content creators — is currently made up of more than 50 million people, according to SignalFire, a venture capital firm.

The home rental industry is just a fraction of that: Airbnb currently has 5.6 million listings on its platform globally (including experiences), VRBO has 2 million homes, FlipKey has 830,000 properties and Homestay has 63,000 rooms.

What they're saying: “There is definitely a cause and effect of people who were impacted by the pandemic turning to hosting," particularly women, Powell told Axios on the sidelines of Fortune’s Most Powerful Women Summit.

Hosts who self-identify as women make up 55% of the platform, 44% of whom say income from hosting has helped them stay in their homes.

 Be smart: Women are turning more to gig work as the pandemic impacted them disproportionately.

Airbnb: Hosting will be as big as the creator economy

“There is definitely a cause and effect of people who were impacted by the pandemic turning to hosting."

graphic of gold colored keys on key ring made from the female gender symbol.

Airbnb

The Los Angeles school district has extended its deadline for staff to get the COVID vaccine from Oct. 15 to Nov. 15.

Why it matters: The second-largest school district in the nation, the Los Angeles Unified School District (LAUSD) has struggled to fill thousands of vacancies, including teachers, counselors and maintenance staff, per the Los Angeles Times. 

One in five employees remained unvaccinated as of Sept. 27.

Details: Employees who have secured at least one dose by Oct. 15 will be allowed to continue working as long as they get their second shot by Nov. 15. 

Employees without a record of any vaccination by Oct. 15 will not be "subject to separation from District service" before Nov. 1. They'll remain paid until Oct. 31.

What they're saying: "We don’t want people to be out of jobs," interim superintendent Megan Reilly told the Times. "Our employees are one of the strongest assets that we have." 

Reilly stressed, however, that "we’re absolutely adamant about keeping our schools the safest possible environment — and vaccinations are clearly the pathway to keeping them safe."

The big picture: The district issued its mandate in early August, requiring its roughly 73,000 staff members to get the vaccine by Oct. 15 or face unpaid leave or termination. 

LAUSD is allowing religious or medical exemptions, though it's unclear how many have been issued. 

The vaccine mandate was endorsed by the teachers union and some other employee unions, though Local 99 of Service Employees International Union, which represents most non-teaching employees and lower-wage workers, pressed the district to extend the vaccine deadline in recent contract negotiations. 

Worth noting: In September, LAUSD became the first major school district to require vaccines for students.

LA extends deadline for school employee vaccinations amid staffing shortage

The district has struggled to fill thousands of vacancies in recent weeks.

Photo of children sitting in a classroom raising their hands

The first day of school at Montara Avenue Elementary School in California. Photo: Allen J. Schaben/Los Angeles Times via Getty Images

Los Angeles

Coronavirus

The U.S. faces a range of health care flashpoints — unaffordable drugs, opioids, vaping — as we debate whether to adopt universal care. For now, the Affordable Care Act is the law of the land, but Republicans want to issue it a final death blow.

Health

The pace of the economic recovery hinges in part on workers returning to jobs that involve dealing with an unpredictable public. But many of those workers say increasingly combative customers — angry about everything from long wait times to mask mandates — have prompted them to quit.

The big picture: Aggressive and violent clashes between customers and service workers over COVID safety protocols over the past nearly two years have led to prison sentences, fines and deaths.

Many workers say they're simply not willing to put up with the abuse any longer — and their employers are often taking their side, even in industries that have long deferred to their customers.

Businesses have shut down in support of their employees. Some industries have provided self-defense classes and banded together on public awareness campaigns.

Driving the news: Workers in restaurants, bars, hotels (6.8%) and retail (4.7%) businesses quit at a higher rate in August than the record national rate (2.9%), new data from the Labor Department on Tuesday showed.

The number of retail workers is still 202,000 short of February 2020 levels, September employment numbers show. 

Restaurants and bars are still about 1 million jobs short of pre-pandemic levels, with more than two-thirds of restaurant workers saying customer behavior is a factor in the industry's labor shortage. 

Because consumers were so used to a “frictionless economy" before the pandemic, there was no tolerance for a slowdown in services as businesses opened back up, says Melissa Swift, U.S. Transformation Leader at Mercer, a consulting firm.  

“Technology has insulated the upper classes from the physical labor that enables their lifestyle," she said.

What they’re saying: "I was extremely lucky to work in a place where the employer treated the employees well and everyone made excellent money. ... [Customers] did make me quit," former bartender who goes by Ash in West Virginia, tells Axios Today. 

“What really hurts is that the same people whining about people on unemployment were the same people who would come in and treat the people actually working like [crap],” she continued, saying that she also moved to Michigan.

“[As] an essential business — [we] continued to work tirelessly through the entire pandemic … All we ask for in return is empathy, courtesy and understanding,” says Casey Carville, who runs a group of nonprofit veterinary clinics in Texas.

Between the lines: This trend of increasingly unpleasant, sometimes violent customers is changing the balance of power within the industry.

“We’ve unnaturally privileged the consumer over the employee for a while now,” Swift said. “We’re seeing a shift away from customer obsession to a more balanced view of the world.” 

"Organizations have been forced to confront the fact that unhappy employees cannot provide the customer experience they’re targeting," she added.

What to watch: If consumer behavior doesn’t improve, more workers may leave, putting the workers who stay at more risk of abuse and placing even greater challenges on businesses to operate.

Workers' fears would likely abate if more Americans get vaccinated and the risk of getting infected on the job declines. That would also allow businesses and local governments to ease up on mask mandates that workers are often tasked with enforcing.

The bottom line:  The customer is no longer always right.

Editor's note: This story has been updated to reflect the latest quit rates that were released after the story was published. 

Unruly customers threaten economic recovery

If consumer behavior doesn’t improve, more workers may leave, placing even greater challenges on businesses to operate.

Illustration of a service bell with an angry emoji on the bell

Axios Pro: Deals

The toll of the coronavirus pandemic has spurred nurses, front-line technicians and other hospital employees to walk out or authorize strikes. 

Why it matters: The pandemic has buckled a system that already faced worker shortages and burnout. Patients ultimately can't receive adequate care if workers leave from the stress and violence.

Driving the news: Unions representing more than 24,000 nurses and other hospital workers yesterday authorized strikes at Kaiser Permanente facilities in California and Oregon. 

A strike authorization does not automatically trigger a strike. Unions still have to provide hospitals with a 10-day notice before walking out.

Kaiser Permanente proposed 1% annual pay raises over the next three years and a two-tier wage system, but unions want 4% annual pay raises and no two-tier system.

Zoom out: The Kaiser Permanente fight is just the latest of several labor disputes.

More than 700 nurses at Saint Vincent Hospital, a Tenet Healthcare facility in Massachusetts, have been on strike for seven months.

Roughly 2,000 people who work at Mercy Hospital in New York, part of Catholic Health System, have been on strike since the start of October.

Home care workers in Connecticut rallied for higher pay last month.

Other recent health care strikes have taken place in Alabama, Montana and Oregon, among other places.

What they're saying: "We're drowning. There's just not enough staff," Jennifer Stone, a unionized ER technician at Sutter Delta Medical Center in California, said in a press release earlier this month. "We're talking down angry COVID patients, then we're rushing to a code ... We can't do it all anymore."

The big picture: The health care industry has lost more than 540,000 jobs between February 2020 and September 2021.

Hospitals are down 117,000 people, and nursing homes are down 247,000.

The bottom line: Low staffing levels are often the driving force behind health care work stoppages, and the pandemic has made that situation even worse in many areas.

The health care worker revolt

Health care has lost 540,000 jobs since the start of the pandemic.

Illustration of hands in medical gloves holding red picket signs, forming a red cross symbol. 

Labor strikes

 Data: U.S. Bureau of Labor Statistics; Chart: Axios Visuals 

The silver lining in Friday’s mediocre jobs report was this milestone: The unemployment rate dropped below 5% for the first time since the pandemic sent workers home in droves. 

Yes, but: Part of what pushed it down was shrinking labor force participation. 

By the numbers: The labor force, which includes anyone who either has a job or is actively looking for one, ticked down by 183,000 in September (those who have stopped looking for jobs are not counted in the labor force — or in the unemployment rate).

The labor force participation rate has stubbornly stuck in the 61.5% area since June 2020, a recovery of less than half its pandemic drop.

Why it matters: September's decline signals that some people are giving up on finding jobs (at least for now), at a time when there are still 5 million fewer people working than there were in February 2020.

The participation rate for women, often primary caregivers for kids or elderly family members, slipped again in September, to 57.1% (the rate for men went up, to 70%).

And more — mostly affluent — people near retirement age are calling it quits early, surveys and data show. One driver is simply that they can afford it, thanks to significant growth in asset values like stocks and real estate over the last year and a half, Tony Roth, CIO at Wilmington Trust, tells Axios. 

The bottom line: The irony, of course, is that the Federal Reserve has been waiting for more job growth before pulling back on its emergency market support — but that support may be contributing to the lack of job growth among workers close to retirement age, Roth adds.

Go deeper: Surprise labor shortage hits schools

More women and older workers gave up on looking for jobs last month

The labor force ticked down by 183,000 in September.

Labor

School is back, but the workers — teachers, bus drivers and more — are not. 

Why it matters: The education hiring slowdown (which helps explain Friday morning’s weak jobs report) is partially a byproduct of the biggest hurdles to labor market recovery. 

Education workers tend to be women, who have left the workforce in droves. They are also older, so they may be more concerned about contracting COVID-19.

By the numbers: Local government school districts lost 144,000 jobs last month and another 17,000 at the state level.

One caveat: A data quirk makes the hiring drop-off more dramatic. 

The agency in charge of the jobs report makes adjustments to smooth out seasonal volatility, which education is prone to.

But hiring in the sector was weaker than it usually is in prime back-to-school season. That “wreaked havoc” on the seasonal formula, and that overstates the decline, RSM chief economist Joe Brusuelas tells Axios. 

Anecdotes across the country show there aren’t enough of the people who make local school systems work.

In Philadelphia, the bus driver shortage is so bad that a school district is paying some families up to $300 to drive their kids. 

In Minneapolis, one district canceled 12 bus routes. It can't find fill-ins when regular drivers are out.

In Charlotte, a school system is offering bonuses to entice special education teachers and other tradespeople.

What to watch: “If kids are back at school and there are far fewer staff, the quality of education is suffering,” ZipRecruiter chief economist Julia Pollak tells Axios.

Axios Local's Taylor Allen, Torey Van Oot and Katie Peralta Soloff contributed reporting.

Surprise labor shortage hits schools

The education hiring slowdown is partially a byproduct of the biggest hurdles to labor market recovery.

Masked teachers and students in a NYC school. 

Masked teachers and students in a NYC school. Photo: Michael Loccisano/Getty Images

Schools

Bank of America will pay its U.S. workforce at least $21 an hour, the bank announced Wednesday.

Why it matters: The increase — which means a large portion of the bank's 174,000 workers in the U.S. will get raises — puts Bank of America at nearly three times the minimum wage of $7.25 per hour, per CBS News.

The big picture: The bank announced in May plans to increase the company's minimum wage to $25 per hour by 2025.

Bank of America, the second-largest bank in the country, has a track record of raising its hourly minimum wage, with an increase to $15 in 2017, $17 in 2019 and $20 in 2020.

Bank of America also announced in May that it was requiring all of its U.S. vendors to pay their employees who are dedicated to the bank's business at or above $15 per hour.

What they're saying: "We make broad-ranging investments to attract and develop talented teammates who serve our clients and local communities every day, and who can build long, successful careers with our company," said chief human resources officer Sheri Bronstein, per the press release.

"Today, we are taking another step forward, again increasing our minimum rate of pay for U.S. employees, demonstrating our commitment to sharing our success with teammates, and inspiring others to do the same."

Go deeper: The impact of the $15 minimum wage

Bank of America raises its minimum wage to $21 an hour

"We make broad-ranging investments to attract and develop talented teammates."

A pedestrian walks by a Bank of America office on July 16, 2018 in San Francisco, California.

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