Posts Tagged ‘Minimum Wage’
Friday, September 12th, 2014
The Heritage Foundation released a new Issue Brief this week: “Higher Fast-Food Wages: Higher Fast Food Prices”. Author James Sherk claims that if the minimum wage in the fast-food industry were to increase to $15 an hour, “the average fast-food restaurant would have to raise prices by nearly two-fifths … caus[ing] sales to drop by more than one-third, and profits to fall by more than three-quarters.”
While the Heritage Foundation attempts to present a mathematically and logically correct depiction of the aftermath of a minimum-wage increase, they fail to acknowledge one fundamentally important fact: the increase will be gradual, occurring over a period of years. Even without considering the report’s many other flaws, the Heritage Foundation’s assumption of a sudden jump in the minimum wage from its current level of $7.25 to $15 is unrealistic.
As Vanessa Wong highlights in “This is What Would Happen if Fast-Food Workers Got Raises”, there are two distinct types of outlets: “those run by the company, and those operated by independent franchisees who set their own wages and pay royalties to the chain.” Thus, Heritage Foundation hastily categorized all fast-food restaurants as one, not even considering the elephant in the room: the corporations such as McDonald’s that charge each branch high franchising fees.
So, how much are these small franchisees paying the mother-ship corporations? According to Robert E. Bond’s “How Much Can I Make?” the franchise fee, royalties, and advertising for a typical McDonald’s is $45,000, +12.5%, and 4%. For a doughnut shop like Dunkin’ Donuts, the fees are even higher, with a franchise fee of $50,000.
If Heritage’s figures are correct, these fast-food restaurants have a profit margin of just 3 percent before taxes, which “works out to approximately $27,000 a year.” Thus, the franchise fee and royalties are way too high — those profits go directly to, in this case, McDonald’s, which operates at a profit margin of 19.31% as of June 30, 2014.
McDonald’s and other large fast-food companies have successfully shrugged off responsibility for the welfare of its workers by making the franchisees responsible. The low-wage jobs — and the cost of these salaries — are offloaded on the franchisees, while the corporations maintain their guaranteed profits, and relative profit margins from quarter to quarter.
Raising the minimum wage — even if only to $10.10, not to the living wage level of $15 an hour — is an economic imperative. Heritage believes that fast-food restaurants still offer “entry level jobs,” and “generally employ younger and less-experienced workers”.
Fast-food restaurants used to be a place for “entry level employees” — teens and young adults, sometimes still in school, newly entering the workforce. The recession drastically changed the dynamic. Today, at fast-food restaurants, we see the faces of older workers on the other side of the counter. Many are parents who rely on their full-time fast-food jobs to support themselves and their families. Instead of providing a “first work experience”, fast-food jobs are now a primary source of income for older, experienced workers.
The problem, once again, is corporations. Individual fast-food restaurants should not be the only battlefront in the fight for livable wages. We should demand that the mother-ship fast-food corporations let go of their greed, and lower their franchise fees and annual royalties.
The Heritage Foundation points its finger in the wrong direction: the responsibility for providing minimum wage fast-food workers with a livable wage falls on the corporations.
This article originally appeared in Campaign for America’s Future on September 10, 2014. Reprinted with permission. http://ourfuture.org/20140910/debunking-the-heritage-foundations-new-minimum-wage-myths-one-by-one.
About the author: Jiao (Kitty) Lan is a Roosevelt Fellow at the Campaign for America’s Future. She is a sophomore at Georgetown University, majoring in Political Economy and Financial Engineering and has taken an interest in Computer Science in her first two semesters. She has had several political internships, including one with Rep. Mike Honda and one with Sen. Dianne Feinstein. Her top three anything are Pops cereal, her two tiny yet vivacious Pomeranians, and traveling the world.
Wednesday, June 4th, 2014
A $15 minimum wage for Seattle has been in the works for a while, and now the City Council has made it official:
The unanimous vote of the nine-member Council, after months of discussion by a committee of business and labor leaders convened by Mayor Ed Murray, will give low-wage workers here — in incremental stages, with different tracks for different sizes of business — the highest big-city minimum in the nation.“Even before the Great Recession a lot of us have started to have doubt and concern about the basic economic promise that underpins economic life in the United States,” said Sally J. Clark, a Council member. “Today Seattle answers that challenge,” she added. “We go into uncharted, unevaluated territory.”
Even socialist Council member Kshama Sawant voted for the increase despite having pushed to eliminate some exceptions and speed the path to $15; under the plan that passed Monday, $15 an hour won’t be fully phased in until 2021, though workers at large employers that don’t provide health coverage will get there by 2017. A strong majority of Seattle voters support the raise.
This article was originally printed on the Daily Kos on June 3, 2014. Reprinted with permission.
About the Author: Laura Clawson is the labor editor at the Daily Kos.
Wednesday, June 4th, 2014
Chances are looking good that Arkansas voters will have the chance to vote on a minimum wage increase come November, Greg Sargent reports:
Dems organizing the initiative tell me they have now amassed at least 10,000 more signatures than the approximately 62,000 required — which, if true, suggests they have a shot at getting them certified, though this is far from a done deal.“We’re in the 72,000 range, and we still have some volunteer efforts going on in the state, so we’re going to add more on top of that,” Robert McLarty, petition director for the Arkansas Interfaith Alliance, a lead group organizing the effort, tells me. “There could be a challenge from somebody, but we are confident we will get this on the ballot.”
The increase in question, taking the Arkansas minimum wage to $8.50 by 2017, is pretty puny by the standards of recent increases like Seattle’s $15 or the $10.10 passed in a growing number of states, but it’s also substantially better than the state’s current minimum wage of $6.25 an hour, which applies to workers at some small businesses, or the federal minimum wage of $7.25 an hour.
Having the minimum wage on the ballot could also have electoral implications. Conservative Democratic Sen. Mark Pryor is facing a tough challenge, and he has endorsed the $8.50 minimum wage (though raising the federal minimum to $10.10 is just too much for him). Getting people out to vote for above-poverty wages could help Pryor defeat Rep. Tom Cotton.
This article was originally printed on the Daily Kos on Jume 3, 2014. Reprinted with permission.
About the Author: Laura Clawson is the labor editor at the Daily Kos.
Monday, May 26th, 2014
Adriana Alvarez has worked at McDonald’s for 4 years and makes just $8.75 an hour. She’s fighting for $15 an hour to win a better life for herself and her two year-old son Manny.
Just now, SEIU President Mary Kay Henry, Adriana and more than 120 fast food workers from across the country were arrested outside of McDonald’s corporate headquarters in Oak Brook, Illinois, where hundreds of workers are refusing to be silenced before their shareholder meeting.
These fast food workers need your help. Call McDonald’s and tell them you stand with Adriana and the other workers right now: 888-979-7395. Tell them that it’s time for $15 an hour and the right to form a union without intimidation.
Adriana and her fellow McDonald’s employees were arrested for their brave act of peaceful civil disobedience. Each of them was standing up for themselves, the families their wages support, and pretty much every fast food worker everywhere. Mary Kay Henry was arrested alongside them to send a clear message to fast food workers everywhere that the 2.1 million members of SEIU — home care workers, child care workers, adjunct professors, security officers, hospital workers and many others — proudly stand with them.
Please show your support now for these unbelievably courageous workers by calling McDonald’s this minute: 888-979-7395.
Tell McDonald’s that you support these workers. Tell them that it’s shameful that workers have to be arrested in order to be heard.
Just to be extra clear: Workers have already risked a lot by going on strike last Thursday in the biggest fast food action in world history. And it’s even scarier to go straight to the source and speak up for what they believe in. But Adrianna is doing it, and so are dozens of others. It’s pretty amazing.
Now it’s your turn to speak up for what’s right. Pick up the phone and call McDonald’s now: 888-979-7395.
The McDonald’s shareholder meeting starts in less than 24 hours and we have to make sure they hear us. No one who works for a living should be forced to live in poverty. No one who works for a corporation that makes more than $5 billion in profit should have hungry kids at home.
We’ve been live tweeting today’s action from Oak Brook at @SEIU, so check out our Twitter feed for of-the-moment updates. You can also visit FastFoodGlobal.org to stay updated as news breaks.
This article was originally printed on SEIU on May 21, 2014. Reprinted with permission.
Author: Flora Johnson, Home Care Worker, SEIU Healthcare Illinois Indiana
Monday, May 12th, 2014
The basic facts of the tipped worker minimum wage are appalling:
- It’s $2.13 an hour, and has been since 1991, because whenever the minimum wage is raised, the restaurant industry launches a massive lobbying effort to keep tipped workers from being included.
- The median wage for tipped workers is $8 an hour, and one in five lives in poverty.
- While restaurants are supposed to make up the difference when workers’ tips don’t raise them to the full minimum wage of $7.25, they often don’t.
What the absurdly low tipped worker minimum wage combined with restaurants not following the law by bringing workers up to minimum wage when their tips fall short means is this:
Like millions of Americans across the United States, 23-year-old Anna Hovland worked a waitressing job earlier this year to make ends meet. Her restaurant in Washington, DC, paid her the local minimum wage for tipped workers, $2.77 an hour, which meant that after taxes, her paycheck was usually zero. Her tips, never dependable, ranged from $20 to $200 a shift. “In a city as expensive as DC, I’ve been able to make ends meet by the skin of my teeth,” Hovland says. “Sometimes it will only be in the last week or two of a month that I’ll realize I’ve made enough to pay all my bills.” [...]Hovland tells Mother Jones that before she got in touch with the Restaurant Opportunities Center last fall—to find out why she was getting zero-dollar paychecks—she had no idea that her employer was supposed to make up the difference in tips. “We never logged our tips or reported them to our employers,” she says, unless they were on credit cards. She adds, “Even after I shared information about the minimum wage difference with coworkers, nobody felt comfortable asking employers about it.”
Forcing workers to ask to be paid the minimum wage is a recipe for wage theft. Any worker who asks has to know that they’re putting a target on their back and any halfway savvy employer knows that, while they can’t admit they’re firing a worker for asking to be paid minimum wage, it won’t be hard to find an excuse to fire the worker for something else.
A few states have the same minimum wage for all workers, and recently, Hawaii included tipped workers when it raised its minimum wage to $10.10. So clearly a tipped minimum wage above $2.13 doesn’t spell doom for the restaurant industry, contrary to the industry’s lobbying efforts. Whereas the current state of affairs genuinely does spell poverty for an unacceptable number of workers.
This article was originally printed on the Daily Kos on May 12, 2014. Reprinted with permission.
About the Author: Laura Clawson is the labor editor at the Daily Kos.
Tuesday, May 6th, 2014
Hawaii looks to become the third state to pass a $10.10 per hour minimum wage, following in the steps of Connecticut and Maryland. Legislators reached a deal on Friday on a bill that would phase in the higher wage by 2018. A final vote on the bill should come Tuesday, and Gov. Neil Abercrombie (D) has expressed support for the bill. While the U.S. Senate is set to vote on a minimum wage increase as soon as this week, prospects remain less likely that a bill will even be voted on in the Republican-controlled U.S. House.
Christine Owens, executive director of the National Employment Law Project, commented on the growing trend of states increasing their minimum wage:
There’s one reason why Hawaii, Connecticut, Maryland and other states throughout the country are raising the minimum wage to $10.10—because Congress hasn’t. The fact that a groundswell of states and cities are now taking action to boost pay for low-wage workers underscores the urgent need for Congress to follow suit and pass a long-overdue increase in the federal minimum wage.
“I commend our legislators for advancing the proposal to raise Hawaii’s minimum wage to $10.10 an hour. It is imperative to provide our lowest-paid workers with the economic stability and security they deserve….I look forward to working with the legislature to bring fairness to the people of Hawaii.”
This article was originally printed on AFL-CIO on April 28, 2014. Reprinted with permission.
About the Author: Kenneth Quinnell is a long-time blogger, campaign staffer and political activist whose writings have appeared on AFL-CIO, Daily Kos, Alternet, the Guardian Online, Media Matters for America, Think Progress, Campaign for America’s Future and elsewhere.
Tuesday, May 6th, 2014
Amazing news out of Washington state today, as the city of Seattle announced that they are raising the minimum wage to $15 an hour.
There are currently 102,000 workers in Seattle earning less than $15 an hour. This wage increase will put hundreds of millions dollars into the pockets of working-class families that they will invest back into their neighborhoods and strengthen their entire economy.
How did Seattle do it? On May 30th of last year, Seattle fast food workers went on strike for $15 because they knew that raising pay was necessary. Their leadership and commitment helped spark an extraordinary grassroots workers’ movement that rapidly built support across the entire city. Less than a year later, Seattle has achieved a minimum wage that ensures every worker in Seattle can support themselves, afford the basics, and contribute to the economy.
Following Seattle Mayor Ed Murray’s announcement that an agreement to lift the minimum wage in Seattle had been reached, SEIU President Mary Kay Henry issued a statement:
“The members of SEIU are thrilled that working people in Seattle have won a landmark victory in their campaign to lift the wage floor in their city and launch an innovative community-based method for making sure workers are paid what they earn.
“This breakthrough happened because ordinary people in Seattle stuck together to force their elected officials and the employer community to listen to them and take them seriously when they called for higher wages that boost the economy instead of hold it back. Their action led to a remarkable dialogue among workers, local government leaders, and local businesses that produced the agreement.
“This happened because of brave people like Crystal Thompson, a Domino’s Pizza worker who went on strike with other Seattle fast food workers to help build the growing national movement to lift pay in the booming fast food industry.
“This happened because of people like Abdirahman Abdullahi, a car rental worker at SeaTac airport who helped lead the campaign to hold a vote in the community of SeaTac to boost wages for airport workers to $15 per hour.
“SEIU members like Washington’s home care workers, who have stuck together in their union to raise their pay from $7.18 to $11 in less than ten years, were among those who stood with airport and fast food workers who aren’t united in a union to say that low wages are holding back their community.
“Through the Working Washington coalition, people across the state stood up to say that it’s simply wrong that so many families can’t count on real economic security, no matter how hard they work.”
Read Mary Kay Henry’ entire statement here.
“Today, this victory is for Seattle,” says SEIU Healthcare 775NW President David Rolf. “Tomorrow, as thousands of low-wage workers mobilize, we will stand down extremists who want to split apart our communities; we will demonstrate to doubters that middle-out economics benefits all; and we will rekindle the American pledge to leave a brighter future for the next generation.”
The bottom line? When the voices of low-wage workers and community leaders are leading the conversation, we see real progress on fair pay. Share this graphic on Facebook to spread the good news far and wide.
This article was originally printed on SEIU on May 1, 2014. Reprinted with permission.
Author: Kate Thomas
Tuesday, April 8th, 2014
Maryland is on the verge of becoming the second state, after Connecticut, to heed President Barack Obama’s call for a new national minimum wage of $10.10 an hour.
Lawmakers moved in a special weekend session to pass a measure hiking the state’s minimum to $10.10 an hour, up sharply from the current minimum of $7.25. The Maryland Senate passed the bill on April 5, and the House of Delegates gave its approval around midday on April 7, just hours before the year’s legislative session ended.
Gov. Martin O’Malley (D) is expected to sign the bill into law promptly. In January, he called the wage hike his top legislative priority for the year.
The victory for low-wage workers, however, has left some progressive groups frustrated and a little angry. The reason? They say the most potent attempts to kill, dilute or delay the bill came from Democratic Party legislators who publicly proclaim their support for the working poor, yet worked behind the scenes to undermine the new minimum wage law. Democrats enjoy large majorities in both houses of the legislature.
“Maryland is a Democratic state, but not necessarily a progressive one,” says Pat Lippold, political director for hospital workers union 1199SEIU, a division of the Service Employees International Union, which helped push for the bill.
“We didn’t expect any support from the Republicans—and we didn’t get any. But every effort to weaken [the original wage proposal] came from Democrats. Our work became beating back Democrats,” says Charly Carter, Executive Director of Maryland Working Families, an arm of the New York-based Working Families Organization. Working Families started a coalition two years ago called Raise Maryland to advocate for the minimum wage boost. Labor unions such as 1199SEIU, American Federation of State, County and Municipal Employees (AFSCME) and United Food & Commercial Workers (UFCW) Local 400 form the backbone of the coalition, along with units of the NAACP and citizen advocacy groups such as Casa de Maryland, Progressive Maryland and the National Employment Law Project. The coalition ultimately attracted about 60 groups including faith-based organizations and even Democratic Party youth groups.
Any lingering anger at conservative Democrats is due to the fact that they were partly successful in watering down the law, although some of the worst suggestions were ultimately rejected. The original proposal, for example, called for the minimum wage to be raised in several steps until it reached $10.10 in 2016. But amendments proposed and supported by Democrats stretched out the phase-in an additional two years, to July 1, 2018. Worse, Democrats killed the part of the original bill that would provide annual cost-of-living adjustments to the future minimum wage, a key element in preventing the erosion of earning power by low-income workers.
And that’s not all. Raise Maryland was keen to include raises for tipped workers, who are currently only required to be paid $3.63 an hour under state law. (Critics have pointed out that the law assumes that tips will make up the rest, but that is not always true in practice.) The House of Delegates declined to do so and froze the tipped wage at the current level for the next four years. The legislators explicitly rejected a more progressive measure, advocated by Gov. O’Malley, to set the tipped wage at 70 percent of the state minimum, which would have allowed the two to rise together.
“I have three words to sum up the amendments that were offered by the conservative Democrats: shocking, unnecessary and counterproductive,” comments Carter. The cost-of-living-adjustment was a key progressive goal, yet was shot down early in the legislative process, she noted. And, Carter says, the more progressive tipped wage provision “should have been mother’s milk to any real Democrat.”
Adding insult to injury, the Maryland legislators also engaged in a public spectacle of special pleading for amusement park owners, Carter and Lippold both relate. Known as the “Six Flags Amendment,” the provision put forward by Democrats would have exempted the owners of the Six Flags America amusement park in Upper Marlboro, Md., from the new minimum wage law. When the exemption gained quick support in the legislature, other amusements operators jumped on the bandwagon and convinced legislators on both sides of the aisle to load up the bill with additional exemptions, Carter says. House of Delegates Speaker Michael Busch (D), who is counted a strong supporter of a more progressive law, was ultimately forced to intervene behind the scenes and put a stop to the amendments, she says. Even so, the final legislation allows Six Flags its own minimum wage, set at 85 percent of the statewide figure.
“What’s amazing is that when you poll the public on the minimum wage, the [pro-increase] numbers are just off the charts,” Lippold adds. “So there is almost no downside,” for legislators to support a higher minimum, she says. “But the devil is in the details,” and skilled lobbyists for restaurant interests and the Maryland Chamber of Commerce are able to exert outsized influence, Lippold says.
The experience of lobbying to raise the minimum wage has solidified the commitment of the Working Families Organization to establish a permanent base in the state and to become more involved in electoral campaigns, particularly at the Democratic Party primary level, Carter says. “Some of these so-called ‘moderate’ Democrats need to be challenged and held accountable,” she says. Formal announcement of the new Maryland unit should be forthcoming within a month, she tells Working In These Times. The Raise Maryland coalition will also remain intact and look for other ways to advance pro-worker legislation, especially a new effort to guarantee paid sick days to all workers in the state, she says.
Nearly a half million Maryland workers are expected to benefit from the minimum wage increase, with the first raise, to $8.00 an hour, scheduled for Jan. 1, 2015.
Full discosure: AFSCME is a sponsor of In These Times. Sponsors have no role in editorial content.
This article was originally printed in Working In These Times on April 7, 2014. Reprinted with permission.
About the Author: Bruce Vail is a Baltimore-based freelance writer with decades of experience covering labor and business stories for newspapers, magazines and new media. He was a reporter for Bloomberg BNA’s Daily Labor Report, covering collective bargaining issues in a wide range of industries, and a maritime industry reporter and editor for the Journal of Commerce, serving both in the newspaper’s New York City headquarters and in the Washington, D.C. bureau.
Tuesday, March 4th, 2014
Democrats in the U.S. House of Representativesfiled a discharge petition that could force Speaker John Boehner to hold a vote to raise the minimum wage from $7.25 to $10.10. A discharge petition is a rarely used legislative maneuver that Democrats hope will bring the minimum wage debate to the floor.
It was through a discharge petition that the Fair Labor Standards Act, which established the federal minimum hourly wage and other worker protection provisions, became law in 1938.
However, while Democrats hope for a repeat of 1938, unsurprisingly, Speaker Boehner hasn’t shown any signs that he is interested in bringing the minimum wage debate to the House floor. Come to think of it, not much is worthy of urgency for the Republican leadership in the House.
A raise in the minimum wage, a policy initiative supported by 71 percent of Americans, that wouldn’t increase the federal budget, that would raise wages for 28 million workers, increase the GDP by $22 billion, and create 85,000 new jobs, is sadly not a pressing matter worthy of a House debate.
Neither does immigration reform, unemployment insurance, and the many challenges that the nation faces. While Republican House leadership twiddle their thumb, 1.3 million Americans are without unemployment insurance (UI) and 11 million aspiring Americans continue to hide the shadow, families are torn apart, communities suffer deportations, workers are exploited, men and women die on the border, and millions live without a path to citizenship.
John Boehner’s refusal to consider bringing minimum wage debate to the floor is yet another example that he is out of touch with the needs of the American people.
Author: Jumoke Balogun
Friday, January 3rd, 2014
Yesterday, workers at large hotels and car services outside the SeaTac International Airport, just south of Seattle, became eligible for a wage increase to $15 an hour after a groundbreaking ballot initiative to significantly raise the minimum wage passed last November.
A judge in the King County Superior Court last week suspended the part of the law that would cover 4,700 people who work within the airport itself, saying that the airport is technically a separate jurisdiction belonging to the Port of Seattle, even though those workers were major proponents of the measure. As it stands now, the law covers 1,600 people who work at hotels and car services outside the airport.
Employees of airport contractors are appealing the county judge’s decision and filed a “petition for discretionary review” with the Washington State Supreme Court on Dec. 31.
The Yes for SeaTac coalition reports that while Alaska Airlines operates hundreds of flights at those other airports that pay living wages, such as the Los Angeles International Airport, Alaska Airlines is the main plaintiff in the lawsuit to take away living wages and paid sick days from the 4,700 SeaTac workers. Alaska Airlines recently reported its best quarter ever and the airline’s 18th consecutive quarterly profit, with $157 million in profits in just three months.
This article was originally printed on AFL-CIO on January 2, 2014. Reprinted with permission.
About the Author: Jackie Tortora is the blog editor and social media manager at the AFL-CIO.