Posts Tagged ‘Minimum Wage’
Tuesday, September 1st, 2015
We talk a fair amount about what people earn. The federal minimum wage is $7.25 an hour, or $15,080 for a year of full-time work. Workers are organizing to demand $15 an hour, or $31,200 a year. The median household income is around $52,000. To be in the top one percent of households, you need $385,195 in income. But we need to put those numbers in the context of what people need.
That minimum wage? It’s not enough to pay rent on an average one- or two-bedroom apartment in any state. But the median household income falls short of living costs in many places, as a new report from the Economic Policy Institute shows.
- The basic family budget for a two-parent, two-child family ranges from $49,114 (Morristown, Tenn.) to $106,493 (Washington, D.C.). In the median family budget area for this family type, Des Moines, Iowa, a two-parent, two-child family needs $63,741 to secure an adequate but modest living standard. This is well above the 2014 poverty threshold of $24,008 for this family type.
- For a two-parent, two-child household, housing ranges from 10.2 percent of a family’s budget in Binghamton, N.Y., to 25.6 percent in San Francisco. Housing for this family type is most expensive in San Francisco ($1,956 per month), and is least expensive in Franklin, Poinsett, and Grant counties in Arkansas ($561 per month).
- Across regions and family types, child care costs account for the greatest variability in family budgets. Monthly child care costs for a two-parent, one-child household range from $344 in rural South Carolina to $1,472 in Washington, D.C. In the latter, monthly child care costs for a two-parent, three-child household are $2,784—nearly 90 percent higher than for a two-parent, one-child household.
- Among two-parent, two-child families, child care costs exceed rent in 500 out of 618 family budget areas.
Household income is often higher in the more expensive places to live, of course. In the Washington, DC, metro area in 2013, it was $90,149. But that means that more than half of families fell short of what was needed to support a basic but stable lifestyle; the EPI calculated its budgets using rents at the 40th percentile and the second-least-expensive food plan the USDA outlines, to give a sense of what type of budget we’re talking about. What that means is that many, many families in this country are cutting basic corners because their incomes don’t keep up with the cost of living—and no wonder, since the cost of living keeps rising while incomes stagnate.
Check out the EPI’s family budget calculator to see basic living costs for families in your area.
This blog was originally posted on Daily Kos on August 29, 2015. Reprinted with permission.
About the Author: The author’s name is Laura Clawson. Laura has been a Daily Kos contributing editor since December 2006 and Labor editor since 2011.
Sunday, August 30th, 2015
In a blog post on Wednesday, Andi Owen, global president for Banana Republic at Gap Inc., announced that the company will end the practice of on-call scheduling and commit to giving employees at least 10 days advance notice of their schedules.
All five of its brands will phase out on-call scheduling, in which employees are required to be available to work on a given day but not guaranteed that they will actually be asked to come in, by the end of September. They will also all provide workers with at least 10 to 14 days notice of when they’ll be working by early 2016.
The company says the changes come from an evaluation it’s conducted over the last year to improve its scheduling practices along with a pilot it launched in July of last year with the help of Professor Joan Williams of UC Hastings’ College of Worklife Law. But it also comes after New York Attorney General Eric Schneiderman began an investigation into the scheduling practices of 13 large retailers and whether they violated a New York state law and sent them all a letter. The investigation had already produced results: earlier this month, Abercrombie & Fitch announced it would end on-call scheduling in New York stores by the end of the year. Those employees will also get their schedules at least a week in advance. Victoria’s Secret, which also received a letter from Schneiderman’s office, has also ended on-call shifts.
Other brands received the letter but haven’t made changes yet, including Ann Inc. (owner of Ann Taylor), Burlington Stores, Crocs, J.C. Penney, J. Crew, Sears, Target, TJX (owner of TJ Maxx and Marshall’s), Urban Outfitters, and Williams-Sonoma.
Starbucks’s scheduling practices also came under fire in a New York Times story last year, after which the company took quick action to end the practice of “clopening,” or shifts where employees close stores late at night and then have to come back in a few hours later to open them for the next day, and post schedules at least a week in advance.
But overall, employees often have to deal with erratic and difficult schedules. At least 17 percent of the American workforce has an irregular schedule, including on-call shifts, split shifts (two different shifts in one day), or rotating ones, although that is likely an undercount. Nearly half of part-time workers and just under 40 percent of full-time workers don’t find out their schedules until a week ahead or less. It’s concentrated in retail, where erratic schedules impact 27 percent of the workforce. One survey of retail workers in New York City found that 40 percent didn’t have a set minimum of hours they worked week to week and a quarter had on-call shifts.
Some lawmakers have looked at ways to address these problems. Earlier this year, Democratic Sens. Elizabeth Warren (MA), Patty Murray (WA), and Chris Murphy (CT) with Reps. Rosa DeLauro (CT) and Bobby Scott (VA) re-introduced the Schedules that Work Act, which requires at least two weeks’ notice of schedules and pay for workers who get sent home before the end of their shifts or are on call but not asked to work. In San Francisco, legislation actually passed to require retail chains to give workers at least two weeks’ notice of schedules and pay employees for on call shifts that get canceled. Similar legislation has been proposed in Minneapolis and Washington, D.C.
Gap also announced that it was raising its minimum pay to at least $10 an hour early last year, a move that has since been followed by a number of large retailers.
This blog originally appeared at ThinkProgress.org on August 27, 2015. Reprinted with permission.
About the Author: Bryce Covert is the Economic Policy Editor for ThinkProgress. She was previously editor of the Roosevelt Institute’s Next New Deal blog and a senior communications officer. She is also a contributor for The Nation and was previously a contributor for ForbesWoman. Her writing has appeared on The New York Times, The New York Daily News, The Nation, The Atlantic, The American Prospect, and others. She is also a board member of WAM!NYC, the New York Chapter of Women, Action & the Media.
Thursday, August 27th, 2015
In a unanimous decision, a federal appeals court reversed a district court and ruled that the U.S. Department of Labor was within its authority to issue a rule change meant to provide home care workers with a minimum wage and overtime protections. The case is now remanded to the district court.
In 2013, the Labor Department announced rule changes under the Fair Labor Standards Act (FLSA) that would guarantee that workers who care for the elderly and people with disabilities in their homes would have the same labor protections as other workers. But U.S. District Judge Richard Leon halted the change saying that Labor didn’t have the authority to make the rule change. On appeal, the higher court disagreed. U.S. Circuit Judge Sri Srinivasan wrote for the court: “The Department’s decision to extend the FLSA’s protections to those employees is grounded in a reasonable interpretation of the statute and is neither arbitrary nor capricious.”
Christine L. Owens, executive director of the National Employment Law Project, said she assumes that Labor now has the authority to implement the changes: “States would be well advised, and employers would be well advised, to take this decision as final and begin acting.”
As Think Progress reports:
This workforce, which is 90 percent female and half people of color, hasn’t been eligible for minimum wage or overtime pay since 1974, when they fell under the companionship exemption given the idea that they merely provided company to their clients. So while their average wages come to $9.61 an hour, nearly a third of those surveyed in New York City made less than $15,000 a year and nearly 40 percent of the entire workforce has to rely on public benefits to get by….
Home care workers are in a huge and rapidly expanding industry. Nearly 2.5 million people are employed in this line of work, making it one of the largest occupations, and the number of jobs is expected to grow 70 percent by 2020. Even so, demand is expected to outpace supply over the next decade as the country ages, something that could be eased with higher pay and benefits.
This post originally appeared in AFL-CIO on August 26, 2015. Reprinted with permission.
About the Author: Kenneth Quinnell is a long-time blogger, campaign staffer and political activist. Before joining the AFL-CIO in 2012, he worked as labor reporter for the blog Crooks and Liars. Previous experience includes Communications Director for the Darcy Burner for Congress Campaign and New Media Director for the Kendrick Meek for Senate Campaign, founding and serving as the primary author for the influential state blog Florida Progressive Coalition and more than 10 years as a college instructor teaching political science and American History. His writings have also appeared on Daily Kos, Alternet, the Guardian Online, Media Matters for America, Think Progress, Campaign for America’s Future and elsewhere.
Tuesday, July 28th, 2015
Beaudette Deetlefs, who goes by Bella, thought being an au pair in the United States would be a great opportunity. The agency she applied to told her she’d travel with her host family on vacation, earn enough to put money into savings, and be treated like a member of the family.
But the when she arrived in Salt Lake City from her home country of South Africa, the reality turned out to be completely different. “What the company told us before we came here, and what actually happened when we got to America, was two different things,” she said. She says her host family wasn’t comfortable her living in the house, which made things tense, and wouldn’t take her on vacation. Sometimes she would be left behind with no food, and the pay was meager.
“The way [the agency] presented it is you can save money,” she said. “It’s not possible with a family that wants you to pay for everything … The pay we get is not enough to save and do stuff with.”
Federal regulations say the J-1 Visa Program, which governs au pairs, must comply with American minimum wage laws. A State Department pamphlet says as much. But a lawsuit Deetlefs and other au pairs have filed alleges that the 15 agencies in the U.S. illegally paid less than minimum wage. Agencies require host families to pay a minimum stipend of $195.75 a week, and because au pairs put in 45-hour weeks, the hourly wage comes to just $4.35. The agencies say that these wages comply with the guidelines set by the Department of Labor and the State Department.
“The State Department has regulations that are specific to au pairs, not even just the J-1 program,” said Matthew L. Schwartz, a lawyer from Boies, Schiller & Flexner working on the case. “They say explicitly that the sponsors are in charge of ensuring that au pairs are paid in accordance with the Fair Labor Standards Act [FLSA],” the law that requires all American workers to be paid minimum wage and overtime.
Go Au Pair President Bill Kapler, one of the agencies named in the lawsuit, said his company simply complies with guidelines sent to it by the government when it tells families that the minimum weekly payment is $195.75. “We truly believe it’s what we’ve been told to do,” he said. “If the Department of Labor comes back and says, ‘We’ve changed some rules,’ we’ll follow whatever the rules are.” He pointed out the program “is not meant to be a labor thing at all,” but is run by the State Department to further foreign relations goals. Many other agencies named in the lawsuit declined to comment.
At the heart of the issue may be whether or not the host families can deduct the cost of room and board from what they pay. The complaint filed on behalf of the au pairs claims that families can’t deduct the costs of food and lodging against the minimum wage given that the program requires them to provide those things. But a 2007 letter from the State Department sent to the agencies and shared with ThinkProgress, indicates they may deduct 40 percent of an au pair’s compensation as the room and board credit, thus bringing their weekly stipend for 45 hours a week to $195.75 under the federal $7.25 an hour minimum wage.
Schwartz said that State Department has since withdrawn that notice and instead clarified that au pairs have to be paid in accordance with minimum wage laws. “We believe that the State Department pulled down the June 2007 notice because they realized it was erroneous once Towards Justice filed this suit,” he said. “We’re very confident in our view of the law.”
Either way, the deductions still wouldn’t account for higher state minimum wages, which the lawyers for the au pairs argue agencies would have to comply with. Twenty-nine states and Washington, D.C. have higher wage floors than the federal government does.
The lawsuit also argues that the agencies engaged in anti-trust behavior by conspiring to keep wages so low and in false advertising by making promises to the au pairs that didn’t turn out to be true for many of them. Kapler of Go Au Pair denied that the agencies coordinated on wages or that it made any promises in its advertising beyond “the facts and the rules.”
The complaint brought by Boies, Schiller & Flexner, the nonprofit Towards Justice, and the au pairs argues that the program has been plagued by low wages from the beginning. Started in 1986, sponsors paid just $100 a week for 45 hours of work. This caught the attention of the General Accounting Office in 1990, which issued a report saying that the au pair program was a “full-time child care work” program and the au pairs had to be treated as full-time employees. Later clarifications made it clear they had to be paid according to American wage and hour laws.
The low wages fit into the larger child care picture in the United States, in which care is expensive but also doesn’t pay workers very much. “It’s one more signal that the child care system is broken,” said Helen Blank, director of child care and early learning at the National Women’s Law Center.
The current situation doesn’t work for anyone. “It’s broken on both sides,” Blank pointed out. “Parents are really struggling to pay for child care … then the people who are paid for child care don’t get paid enough, don’t get benefits, and don’t get treated well.”
Median pay for U.S. residents who provide child care is just $9.38 an hour, more than what au pairs can expect but on par with fast food employees, bar tenders, and parking lot attendants and less than people who care for animals in zoos or homes. Their pay increased just 1 percent between 1997 and 2013 — barely keeping up with the rising cost of living. At the same time, however, the cost of care for an infant can reach as much as $16,500 a year, on average, and eats up a bigger portion of families’ budgets than food, rent, or, in many states, public college tuition.
So au pairs can be “a solution for families,” Blank noted. The complaint itself notes that “the sponsors extract premiums from families seeking affordable childcare with the sales pitch that even with significant sponsor fees, au pairs are significantly cheaper than other childcare options available in the United States.” In many cases, this is likely true.
Even if the au pairs prevail in their lawsuit against the agencies, it won’t fix this broken system. But Deetlefs hopes it changes things for people brought over to care for American children. She herself was fired from her position when she got involved in the lawsuit and is currently back home in South Africa. But she says it’s not about her. “The whole purpose for me is to make it better for the au pairs that come after us,” she said. “We already had a bad experience and I wish to spare them that.”
This blog was originally posted on Think Progress on July 28, 2015. Reprinted with permission.
About the Author: The author’s name is Bryce Covert. Bryce Covert is the Economic Policy Editor for ThinkProgress. She was previously editor of the Roosevelt Institute’s Next New Deal blog and a senior communications officer. She is also a contributor for The Nation and was previously a contributor for ForbesWoman. Her writing has appeared on The New York Times, The New York Daily News, The Nation, The Atlantic, The American Prospect, and others. She is also a board member of WAM!NYC, the New York Chapter of Women, Action & the Media.
Wednesday, July 8th, 2015
Thanks to what is believed to be first of its kind legislation, legal minimum wages and worker protections may be on the horizon for California’s professional cheerleaders.
A bill proposed by State Rep. Lorena Gonzalez (D) in January, and approved by the Senate on Monday, requires California sports teams to adhere to state and federal minimum wage requirements and to provide overtime pay and sick leave to professional cheerleaders.
Despite the athletic skill and training required for participation in professional-level cheering — plus the branding and visual expectations that come along with acting as the public face of a sports team — cheerleaders are often considered independent contractors and therefore are not protected by minimum wage and other labor standards.
This is particularly jarring considering professional cheerleaders act as some of the most public symbols for leagues like the NFL, which is worth over $33 billion, according to recent estimates.
“A.B. 202 would explicitly require that professional sports teams provide cheerleaders with the same rights and benefits as other employees, protecting against the sort of financial and personal abuses that have been reported throughout the country,” said Gonzalez, who is a former college cheerleader herself, in an April press release. “A.B. 202 simply demands that any professional sports team — or their chosen contractor — treat the women on the field with the same dignity and respect that we treat the guy selling beer.”
A similar bill has been proposed in New York State, but Gonzalez’s will be the first to hit a governor’s desk. Both measures come as a response to a string of lawsuits brought against NFL teams over the last two years. The first suit was brought by a former Oakland Raiders cheerleader who claims that she and other members of the cheer team were paid less than $5.00 an hour and were denied overtime and other benefits associated with standard labor laws.
In bringing the lawsuit against the Raiders, attorney Sharon Vinik dismissed the team’s justification for the contractor status of the cheer squad, stating that the NFL team dictated the choreography and music used by the cheerleaders among other strict limitations. The defense also rejected the common claim that the opportunity to cheer for a professional team opened up other doors such as endorsements and modeling, and therefore acted as a career stepping stone.
“If you are a young starting quarterback, you get lot of notoriety for that, but you also get paid for that work,” said Vinik at the time. “The fact that the women might get some opportunities doesn’t justify not paying them.”
According to the Associated Press, Vinik thinks the new California legislation is a good step, but one that may not be big enough to actually change the payment culture surrounding professional cheerleading.
The Raiderette’s lawsuit was followed by similar legal complaints from other teams, including cheerleaders from the Buffalo Jills cheer squad, who claim that they were not paid for up to 20 hours of their weekly work with the Buffalo-based NFL team.
While the new California legislation may be a step in the right direction, the vast majority of professional sports teams and states have yet to address the significant wage gap and labor violations associated with the professional cheerleading industry.
This blog was originally posted on July 1, 2015 on Think Progress. Reprinted with permission.
About the Author: The author’s name is Katelyn Harrop. Katelyn Harrop is a summer intern at ThinkProgress. She is a rising senior at Ithaca College, where she is pursuing a B.A. in journalism and a minor in international politics. Katelyn is an editor for Buzzsaw Magazine, Ithaca College’s independent, student-run publication, and a staff writer for the community radio station in Ithaca, New York. Katelyn is originally from McMinnville, Oregon.
Monday, June 29th, 2015
The Fight for 15 has another win. Home healthcare workers, who are represented by SEIU, will get a raise to $15 by July 2018, up from a current pay rate of $13.38, with a raise of 30 cents an hour effective next week. The more than 35,000 workers care for elderly and disabled people on Medicaid, helping them bathe, running errands for them, and other tasks that help people live in their homes.
Personal care attendant Rosario Cabrera, 31, of New Bedford, said the raise means she will be able to pay her bills on time, provide for her two children, and maybe even take a vacation. Cabrera works seven days a week caring for two elderly women in their homes, and even with the money her husband makes as a machine operator, her family struggles to get by.“I’m proud of what I do because I’m helping another human being life their life,” she said. “But it’s not fair if I can’t live my life.”
Home care work is one of the fastest-growing and lowest-paid industries in the country. But Massachusetts shows that doesn’t have to be the way it is.
The minimum wage in Massachusetts is on its way to $11 in 2017 (it is now $9 an hour) and a paid sick leave law kicks in next week. Obviously that hasn’t blunted the momentum in the state to do even better for workers in low-wage industries. And note that the governor with whose administration the home care workers deal was negotiated is a Republican.
This blog was originally posted on Daily Kos on June 27, 2015. Reprinted with permission.
About the Author: The author’s name is Laura Clawson. Laura has been a Daily Kos contributing editor since December 2006 and a Labor editor since 2011.
Friday, June 26th, 2015
Last week, the U.S. Bureau of Labor Statistics issued its numbers for inflation and for real wage movements. The numbers reflected the weak numbers of the first quarter for economic growth: Zero inflation and zero real wage growth in the past three months. The economy is showing signs that it is fragile. It can be spoofed by international developments that raise the value of the dollar and slow U.S. export growth, or by bad weather—events, the Federal Reserve cannot control or easily predict.
So what is the Federal Reserve doing? At its June Open Market Committee Meeting, where Federal Reserve policy is set, the Fed stayed put on interest rates. Yet, it gave indications that it was considering giving in to the stampede for the Fed to act sometime this year to raise interest rates in a deliberate move to slow the economy. A policy to slow the economy is based on beliefs, not on the hard data before us on wages or inflation. This is regrettable.
The deeper reality is that the Fed took unprecedented moves to build up huge reserves of U.S. Treasuries. What is really going on is more that the speculators on Wall Street are nervous. They are afraid that somehow, from some unknown source, inflationary pressures will rapidly appear and the Fed will quickly unwind its position with, for some of them, disastrous consequences on bets they have placed on bond prices. They would prefer the certainty of having the Fed start to unwind its position now, slowly divesting itself of its bond reserves and easing the economy to higher interest rates. This has nothing to do with the economy, and everything to do with Wall Street speculation. Unfortunately, the press plays sycophant to these speculators, who are constantly quoted as giving “economic” advice when they state with certainty the need for the Fed to raise interest rates.
Sources of global instability abound. The discussions over the Greek debt, the Eurozone bankers and the International Monetary Fund are far from a workable solution. In the meantime, the Swiss Franc is rising uncontrollably in response to that uncertainty. Iraq, Syria, Yemen and the ongoing conflict with ISL make the Mideast equally unpredictable. And, if snows were the issue in the first quarter, the California drought, the Texas floods and Midwest tornadoes so far this quarter should not make anyone confident that the current hurricane season is going to be a sleeper. Further incidents in Charleston and now Charlotte with violent attacks on African American churches and the constant stream of discontent with the ongoing and unresolved issue of police misconduct make the domestic situation equally volatile. With so many uncontrollable and unpredictable risk factors that could slow the economy, the fears of Wall Street speculators should and must take a back seat.
These risks are not all unrelated. A more robust U.S. economy will help the world economy and help reduce some risks associated with weak economic performance; especially in the Eurozone. And a more robust U.S. economy will hopefully speed job growth to reduce the economic tensions that overlay the raw social tensions domestically.
The Fed must expand its view of measures of full-employment. The Wall Street gamblers base their assumptions on full employment from a time gone by. For instance, economists today still persist in viewing the high African American unemployment rate as a “structural” issue, since African American workers are assumed to be so low-skilled they cannot find jobs in a modern economy. So, they ignore the warning signs that job growth is frail when the African American unemployment stalls, as it has, at around 10%.
In May, the unemployment rate for adult African American workers (those older than 25) with associate degrees was 5.6%, which was higher or about the same as the unemployment rate for white, Asian and Hispanic high school graduates. Those numbers are inconsistent with full employment. They indicate a market where employers are very free to pick and choose which workers they want. A faster growing economy will force employers to be less choosy.
The slow economy cascaded higher educated workers down into jobs that require less education. If the economy does not speed up, that misallocation of productive capacity could become permanent, as employers may continue to seek only college graduates to serve coffee. This costs us in loss productivity growth. It is another sign of a labor market that is not at full employment.
Locking in high African American unemployment and college degree requirements for entry-level jobs is not in the economy’s interest. And covering Wall Street bets isn’t either.
This blog was originally posted on AFL-CIO blog on June 26, 2015. Reprinted with permission.
About the Author: The author’s name is William E. Spriggs. William E. Spriggs is the Chief Economist for AFL-CIO. His is also a Professor at Howard University. Follow Spriggs on Twitter: @WSpriggs.
Monday, June 22nd, 2015
On June 13, Los Angeles Mayor Eric Garcetti signed the city’s landmark $15 minimum wage into law. Although the city’s workers won’t be seeing that full figure until 2020, the new law will bring billions of dollars into the pockets of at least 36% of the workforce, and should be seen as the culmination of grassroots action supported by a coalition of labor groups such as Raise the Wage and Fight for $15.
But in the aftermath of its initial approval a few weeks ago, right-wing pundits, with help from mainstream news outlets, succeeded in pitting minimum-wage activists up against labor leaders, drumming up charges that the unions were acting to actually undermine the minimum-wage-increase movement. Rusty Hicks, the head of the Los Angeles County Federation of Labor, had to save face after he led a failed last-minute push to include a clause into the city’s minimum wage ordinance that would allow employees the option of having their collective bargaining agreement supercede the local minimum wage policy.
Opponents have argued that the provision potentially allows for unions to negotiate contracts that include wages below the minimum, and that unions would use the wage carve-out to offer a kind of carrot to employers in exchange for allowing the union to gain new members—assumedly leaving new union members earning, in total, less than the minimum wage.
Mostly due to the inability of Hicks or anyone else in the city’s labor movement to offer a strong and convincing rebuttal to these charges, this talking point has largely taken hold. With labor at the front of Fight for $15 battles in Los Angeles and across the country (Hicks himself has been a leader in Los Angeles’s Raise the Wage coalition), pundits on Fox News have spread the idea that “big labor” could be trying to get around the minimum wage that “they tried to impose on others.”
“They want to make unions basically the cheapest labor and have more money for themselves—that’s what this is all about,” libertarian journalist Michelle Fields told host Eric Bolling on the conservative network on May 30.
It’s an easy talking point to run with, and admittedly the optics of it are pretty bad. But those trashing the union’s attempt to insert the provision have failed to realize the nuances of the situation. Glancing at the data of union workers’ compensation in cities that already have such wage exemption provisions on the books, as well as applying a bit of logic in thinking about why a worker would vote to join or choose to stay in a union, show that such provisions haven’t and won’t result in unionized workers earning below the minimum wage, and in fact can serve to protect minimum wage increases from legal challenges from business interests.
Why do workers organize?
To explain why this is the case, let’s examine some of the arguments against the provision. The U.S Chamber of Commerce, often labor’s foe, outlined a modern history of minimum wage policy and the union carve-out in a study they published last year. The study suggested that what the Chamber calls the “union escape clause” is nothing more than a ruse to gain “new members, new dues revenue, increased political clout, and, most likely, increased payments into its pension fund.”
The Chamber’s study points to hotel worker union UNITE HERE’s explosive growth in San Francisco (where minimum wage ordinances have typically included “union escape” provisions) as an example of a “real-world correlation” between the provision and labor’s supposed self-interest:
UNITE-HERE Local 11, which represents hotel workers in Los Angeles, California, saw its membership and revenues jump after the city included a union escape clause in a minimum wage hike on hotels. Local 11’s membership increased from 13,626 in 2007 to 20,896 in 2013, while its revenue increased from approximately $7.5 million per year to nearly $12.7 million. … When San Francisco, California, passed a citywide minimum wage ordinance with a union exemption in late 2003, membership in UNITE-HERE Local 2 rose from 8,000 in 2004 to more than 14,000 in 2013. Notably, these increases occurred as union density nationally declined from 12.9% of the workforce in 2003 to 11.3% in 2013.
Reading the Chamber’s study, you would think that the principal reason UNITE HERE membership in LA and San Francisco grew during this time was the wage carve-out. But that’s absurd, and doesn’t reflect the way workers join unions or how union membership grows in general.
In case the Chamber has forgotten, workers are the ones who choose to join unions, either through a secret-ballot vote or through a “card check” process. And if they don’t like their union, they can vote to decertify it. If workers joined a union and paid dues to it every month but continued earning a wage below the minimum after they joined, why wouldn’t they vote to leave the union? They would have no financial incentive to stay, and assumedly UNITE HERE’s membership would be tanking rather than growing as workers realized they were getting a raw deal and voted to leave the union.
But of course, rather than seeing their compensation tank, hotel workers are seeing their wages and benefits increase as union members. UNITE HERE says that its members in San Francisco—remember, a city with the minimum wage carve-out for union workers—earn, on average, an hourly wage of $20.94. The deal also gets sweeter for those members when quality-of-life benefits like secure hours and compensation packages are included.
In Los Angeles, where the union’s members are also allowed to have their collective bargaining agreement supercede local wage ordinances, union workers earn slightly less, $16.47 plus benefits. Still, union workers’ wages alone are higher than the $15.37 wage floor enacted for hotel workers last year; when you include the benefits those workers typically receive through their collective bargaining agreements that most minimum wage earners do not have a right to, the total compensation becomes even higher.
Beyond hotel workers, the numbers make it clear that union workers earn on average considerably more than the minimum wage, even in cities that have these carve-out provisions. A 2014 study by the Institute for Research on Labor and Employment at UCLA reports that, when adjusted for cost of living, hourly earnings for union workers in Los Angeles stand at $20.35, whereas their nonunion counterparts earn $16.13. Clearly, few union members in the city earn less than minimum wage.
Hicks remarked at a recent press conference, “Unfortunately, too many in today’s society do not have the benefit of being a part of a collective bargaining opportunity or experience, so it can be confusing.” The confusion might have been cleared up, however, with a few concrete facts showing how collective bargaining helps put money in workers’ pockets—far more money than any minimum wage.
Safety in Supersession
Hicks had a lot of material to work with to beat back the anti-union rhetoric that he didn’t use. But his press conference did mention what is apparently the foundation for collective bargaining supersession clauses that have been included in other minimum wage laws of Los Angeles, San Francisco, Oakland and Chicago, among others: The provision is actually intended to provide a safeguard for union workers against potential legal challenges to minimum wage laws.
Herb Wesson, Los Angeles’ City Council President, has admitted as much, with his spokesperson telling KPCC, a local NPR affiliate, that Wesson “continues to have questions about the policy as it relates to exposing the city to legal liability.” The concern, KPCC reported, is that “federal labor laws could be interpreted as preventing cities from interfering with contracts between employers and unions.”
James Elmendorf, deputy director of the Los Angeles Alliance for a New Economy, a progressive policy group affiliated with the city’s labor movement, told the Los Angeles Business Journal last year upon the passing of the hotel wage ordinance that “in a previous decision, the U.S. Supreme Court recommended that local and state laws and regulations of private businesses contain such exemptions.”
The provision actually ensures that collective bargaining will trump any local statutes. If any wage increase ordinance is challenged in court (as they frequently are by industry groups), local collective bargaining agreements that were formed while new “imposed” wage floors were in place would be protected from legal challenges through the supersession clause.
When combined with the fact that employees will earn higher wages and benefits when unionized, it easy to see why this provision makes business interests and their allies jump at the chance to turn the tide in a war of sound bites.
While the $15 minimum wage ordinance became official on June 13 without the “collective bargaining supersession clause,” the ordinance may be expanded by the time it takes effect next July. The expansion could include the supersession clause, as well as two other provisions that the union fought for during the legislative process: 12 days of paid sick leave and banning restaurants from keeping bogus “service charges” rather than considering them workers’ tips.
The boost in the minimum wage will undoubtedly help improve the quality of life and economic situation for masses of non-union workers in the city. But rather than undermining those gains, Hicks’s provision would have helped protect against potentially damaging legal challenges to the real benefits and increased wages that come with unionization.
For now, one can only hope that LA’s labor leaders will speak out for the provision and get organized labor past an embarrassing and largely untrue spate of headlines to convince low-wage workers that unions are not the villains Fox News and the Chamber of Commerce are attempting to portray them as.
This blog was originally posted on In These Times on June 18, 2015. Reprinted with permission.
About the Author: The author’s name is Mario Vasquez. Mario Vasquez is a writer from Santa Barbara, California. You can reach him at [email protected]
Tuesday, June 16th, 2015
Fast food workers and their allies in New York City, supported by protestors elsewhere around the country, flooded public hearings in New York today with the message that they deserve at least $15 an hour. They testified before a wage board appointed at the behest of New York Gov. Andrew Cuomo to determine standards for fast food workers in the state.
The board’s work is taking place as a widening movement to raise minimum wages for the growing share of Americans in ill-paid jobs is both raising expectations and winning concrete victories. But the Fight for $15 campaign has also spurred action by many groups of low-wage workers, from home care aides to university adjunct teachers. And it is generating a complex new current within the broader labor movement that goes far beyond even their ambitious wage goals.
The Los Angeles city council’s vote last month to raise the minimum wage in the nation’s second largest city to $15 an hour by 2010 was the latest—but almost certainly not the last—in a series of major local victories by low-wage workers and their advocates that started last year in SeaTac, Washington. The movement then won victories in Seattle, San Francisco and other local jurisdictions. Popular movements in other cities, such as St. Louis and Kansas City, are close to pressuring local legislators to set a minimum wage of $15 an hour.
Some employers, most recently Chipotle, are apparently reading the writing on the wall and improving pay, benefits and work rules (though generally offering much less than workers want).
In Los Angeles, more than 40 percent of its workforce, which has a high proportion of service workers, earn near California’s current state minimum wage of $9 an hour (or less for some tipped employees and for victims of employers’ wage theft, estimated in Los Angeles as afflicting nearly one-fifth of the low-wage workforce).
They also rely heavily on public assistance programs to survive. Such aid effectively amounts to taxpayer subsidies of nearly $7 billion a year across the country to companies like McDonald’s to support the substandard wages of non-managerial fast food workers in the U.S., according to the University of California at Berkeley Center for Labor Research and Education.
The contemporary movement to “raise the wage” has roots that are often run deep and wide—for example, in Los Angeles, traditional unions, worker centers and other non-union worker organizations, non-profit research and advocacy groups, faith organizations, immigrant and civil rights groups and dozens of other allies are participating in the movement. Last year, Los Angeles Mayor Eric Garcetti advocated raising the minimum to $13.25, but he missed the wave of public opinion that swept away his by then passé proposal. In a poll of Los Angeles residents, 69 percent favored a strong package of workplace improvements, including a minimum of $15.25 an hour.
In Los Angeles, more than 100 groups formed the Raise the Wage coalition. Many of them had been involved in living wage battles or other campaigns to raise wages for specific groups of workers, such as hotel employees or people working at the publicly-subsidized LAX airport, or to raise awareness of how many employers cheated their employees. As a result of their work, the new law covers every worker and establishes an enforcement agency for the first time.
The coalition drew on studies of the economics of raising the minimum from the Berkeley Center, the Economic Policy Institute and the non-governmental think tank the Economic Roundtable (collaborating with two UCLA research institutes) that promised little or no loss of jobs, an economic shot in the arm (especially in poor areas) and a boost in economic well-being for more than 40 percent of Angelenos.
The minimum wage campaign even drew support from a few small business people. Kevin Litwin, chief operating officer of Joe’s Auto Parks (with 20,000 parking spaces in downtown Los Angeles), was told by his CEO not to fight the wage increase but instead investigate what happened to the company’s branch in Seattle after the local minimum wage rose to $15 an hour. Litwin discovered that revenue increased, workers were more productive, turnover declined, and, he said, “the whole thing seemed to work for us in Seattle. Why not LA? We think this is just good to do, and it was also good for our industry.”
The final legislation rejected requests for exemptions from some businesses, such as the restaurant industry’s standard plea for sub-minimum wages for tipped employees, as well as a labor movement proposal that workers under collective bargaining agreements not be covered. Business critics pounced on what they claimed was labor hypocrisy and an effort to entice employers to accept unions in order to benefit from the exemption.
But Kent Wong, director of the UCLA Labor Center, said, “The concern of labor is for unionized employees’ varying benefits—sick pay, pensions—with an overall package significantly higher than the minimum wage. It was an attempt to respect existing collective bargaining agreements.” The proposed revision may be taken up later, but many council members seemed unsympathetic to the union argument, even though such exemptions are common in local minimum wage laws.
Even if the Fight for $15 was only one Raise the Wage member among many, the broader movement owes much to the fast food fighters. Starting with a one-day strike action two and one-half year ago by several hundred fast food workers in New York City, the organization has spread throughout the country and to other occupations, though the fast food industry is its priority.
Fight for $15 has contributed to the low-wage worker movement its goals—which at first, seemed to be a far stretch—of at least $15 an hour and the right to join a union without harassment. Its grassroots dynamism and direct action tactics have inspired a variety of ill-paid workers but posed a formidable threat to its foes, most immediately McDonald’s Corporation, the world’s third largest private employer.
“Once you cut the head off the snake, it all falls in place,” says New York City McDonald’s worker and volunteer organizer Jorel Ware. “McDonald’s is the snake.”
Last weekend more than 1,300 Fight for $15 representatives gathered in Detroit for their second annual convention, and judging from their major resolution—and from the keynote speech by Mary Kay Henry, president of the Service Employees International Union, their financial and organizational backer—the organization is counting on the New York wage board determination to be good enough to become the standard for the industry.
“We believe New Yorkers are leading the way to a new standard for fast-food workers and our families across the country,” the resolution reads (and Henry said that “New York is on the verge of setting a new standard that will change how we think about wages in this country”).
Despite the overwhelming emphasis on higher pay, the Fight for $15 has always been a fight for a union as well. Yet increasingly leaders at all levels are focusing on the need for a union as well as for a minimum wage raise. But Kendall Fells, national organizing director of Fight for $15, acknowledges that the union cannot organize store by store, but it can keep pressure on the company as a whole until there’s an agreement about how to proceed with recognition.
“The problem is the process of organizing is too small and Fight for $15 is too big,” he says, but there’s the possibility of organizing all of the stores at once, adding community pressure from clergy, allies and other unions to the pressure, including additional legal action on the company’s labor law abuse.
Meanwhile, even without official recognition of their status, the workers can bring some changes by a variety of challenges at work, in the courts, and before the National Labor Relations Board. “In these workers’ minds, they already have a union because they’re sticking together and bringing change,” Fells says.
Many workers are not only fighting for the $15 an hour and a union that first drew them to the campaign. They’re fighting for a better world. They see their actions as re-directing the course of history, as building a future for their children and grandchildren, and as helping workers not only in other fast food outlets but also in many other jobs and industries. They are exercising newly discovered rights as citizens of the United States and even enjoy a sense of being linked to workers in other countries. In these ways, they have already taken steps beyond developing a simple trade union mentality towards a consciousness of class that is as much ethical and political as economic.
“Our goal is a living wage when we say $15 and a union,” says Ware, an early supporter of Fight for $15. “That’s why we say $15 and a union. It looks like we’ve got the $15 but it may be a long fight for a union.”
But he notes that next year is an election year, which may open possibilities. Indeed, Hillary Clinton called into the convention saying that she wanted to be the “champion” of the organization and its members. Her move may have been simply political positioning, but it at least indicates that some Democrats may feel momentarily comfortable supporting a labor struggle.
Ware sees their demands as “good for the economy,” since their victories will likely encourage other companies to pay a living wage. And the campaign is good for him, helping him do something he had always wanted but did not know how to do. “I never thought I’d be doing this,” he said. “I always wanted to help people, but I didn’t know how.”
At his second Fight for $15 convention, Antione Hearon, 22, was impressed by how much the movement had grown in a year, spreading across the country and even around the world. Although he hopes to be able to afford to return to community college, he wants to know that McDonald’s will pay a living wage if he has to rely on it. But he’s in it for more than himself.
“My family [of 14 children] has been without lights, gas, water. At times we didn’t eat,” he said. “I need the money for myself and my family. I’m doing this not just for myself but for the whole country. I didn’t know anything about unions [before joining the campaign]. I didn’t think fast food workers could have a union. … It shocked me: this is a real thing. … Then there’s the unity aspect of this: there are people who I could go to personally, who have my back. I like that unity.”
At the convention, Connie Bennett, 57, an eight-year veteran at McDonald’s, found herself swapping ideas with other workers about how to recruit people—especially young workers—to the Fight for $15, as well as setting up “pen pal” ties with workers in other cities. She realizes some of them feel they need the job badly and are afraid of losing it, but she explains to them that organizing, even striking, “that’s our freedom, and that’s our right as citizens. I tell them that this is not only their fight but a fight for their children and grandchildren.”
She talks up the union at her bus stop and when she stops by the mid-morning daily coffee club of elderly customers. That paid off when workers at her Chicago McDonald’s went out on strike. The coffee club members joined in. “I can’t put into words how that support made me feel,” she said.
Fifteen dollars an hour might mean that she could take a bus to work all the time, not just half the time. More important, she might be able to visit four grandchildren she has never seen. But the experience of solidarity, of being part of a union, is a reward in itself.
“I believe very much in unions,” she said. “If this is a sign of what a union means, I believe a union will bring the $15 to us. I explain to the members that a union is a big part of what they need. A union will give them freedom of speech, and you’re the ones who make the decisions.”
Even without a formal union or a pay raise, the fighting fast food workers have become winners. They’ve won a new sense of their rights and power and a new view of how they fit in the world. And that’s worth at least as much in its own way as the pay raise they need and deserve.
This blog was originally posted on In These Times on June 15, 2015. Reprinted with permission.
About the Author: The author’s name is David Moberg. David Moberg, a senior editor of In These Times, has been on the staff of the magazine since it began publishing in 1976. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He has received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy. He can be reached at [email protected]
Monday, June 15th, 2015
Jen Piallat, the owner of Zazie in San Francisco, knows what it’s like to work in the American restaurant industry. “I worked on the restaurant floor for 30 years before I owned my own,” she said. “I didn’t have savings or health insurance until I was 35.”
The story is very different for her employees today. She had already offered them 401(k) plans with a match, fully funded health and dental insurance, and paid sick leave. And now she’s gone even further, getting rid of tips in favor of increasing pay and offering even more benefits.
At the beginning of the month, the restaurant increased its prices across the board by about 20 percent. She noted some restaurants that have done away with tips have added a mandatory service charge at the bottom of the check instead. “I didn’t want to do that,” she said. “I like the all-inclusive model…of everything, not just service, not just a tip, it’s also full benefits.”
Her servers’ wages, which were already about $15 an hour, will now raise by 2 to 3 percent. But those who work in the “back of the house” in the kitchen or busing tables will get at least a 30 percent increase. Servers will also get a share of profits, receiving 11 percent of their individual sales every day on top of their wages.
And while she offered paid family leave on an informal basis, she said she’s now added it officially to the books. “We have basically full benefits,” she said.
She anticipates the changes will make a big difference for her employees. “Housing is so expensive here,” she noted. Housing costs in San Francisco are up 6 percent over the last year and have risen in some neighborhoods by 50 percent over the last decade. Three years ago, she says, all of her staff lived in San Francisco proper, but now at least a third live outside the city. She also noted that most restaurant workers have no savings, just as she didn’t before opening her own up. But she says that combined, her employees have over $1 million in their 401(k) plans.
Her employees are enthusiastic about the changes. “One of my servers who had been reticent about it said, ‘Can I hug you, I feel great about it,’” she said. After the first day without tips, servers realized that they had more time freed up because they didn’t have to keep track of credit card slips and enter their tips into the computer system. And they’re able to treat customers better as well. One served a table of people with French accents, notorious for low tips given that tipping isn’t customary in Europe, but didn’t feel the pressure to serve other tables better because she might get a better tip. “She said it’s so nice to be totally welcoming and friendly to them and not have to have any concern,” Palliat said.
There is a chance she’ll end up losing money in the new system. “I’m five percent concerned,” she said. She’ll also have to pay more in taxes because what servers used to make in tips, which doesn’t get reported, will now be reported income. But she says it’s still worth it. “I don’t have a problem making a little less to even things out, make it a little more equitable,” she said. Plus the restaurant might benefit from slightly less business: she noted that there’s a consistent two-hour wait on weekends, which she’d like to bring down and might achieve it through people being turned off by higher prices.
She’s going to keep a close eye on profits. But, she said, “I’m definitely not going to ever decrease [the staff’s] percentage… If in six months our profit level has bottomed out, we’ll just have to increase prices.”
By doing away with tips in favor of a living wage, Palliat joins a movement of sorts. It began in high-end restaurants in New York and on the West Coast, but now has spread to lower tier restaurants in Philadelphia, Kentucky, Pittsburgh, St. Paul, Minnesota, and Washington, D.C. While Americans think that our system is a way to reward good service, research has found that in reality tips vary little based on a customer’s experience. Instead, they tend to change more based on appearance and race.
Being compensated through tips can also mean financial hardship for a lot of servers. It means they can be paid a lower minimum wage — the federal tipped minimum wage is just $2.13 an hour. While restaurant owners are supposed to make up the difference if tips don’t bring pay up to at least $7.25 an hour, many don’t. So people who work for tips end up twice as likely to live in poverty.
This blog was originally posted on Think Progress on June 11, 2015. Reprinted with permission.
About the Author: The author’s name is Bryce Covert. Bryce Covert is the Economic Policy Editor for ThinkProgress. She was previously editor of the Roosevelt Institute’s Next New Deal blog and a senior communications officer. She is also a contributor for The Nation and was previously a contributor for ForbesWoman. Her writing has appeared on The New York Times, The New York Daily News, The Nation, The Atlantic, The American Prospect, and others. She is also a board member of WAM!NYC, the New York Chapter of Women, Action & the Media.