Posts Tagged ‘Minimum Wage’
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.
Monday, June 8th, 2015
St. Louis Mayor Francis Slay is announcing today a bill that will raise the city’s minimum wage to a living wage of $15 an hour for those who work for the city’s larger employers.
The plan would steadily raise wages by $1.25 an hour per year until 2020. However, small businesses that gross less than $500,000 annually or have fewer than 15 employees would be exempt.
The state’s second-largest city is on its way to join others across the nation, such as Los Angeles and the District of Columbia, that have set their wages higher than the federal minimum wage. The federal minimum wage stands at a mere $7.25 – not nearly enough for anyone to live on.
Via his personal Twitter account, the mayor addressed the need for the plan: “The discussion about a local increase of a minimum wage has been positive: how we best make this work. Read the bill. The legislative process is just beginning. There is opportunity to address concerns. Bottom line, though: the city and the region must make it possible for full-time workers to live, raise families.”
The city’s clock is ticking, however. Missouri’s Republican-led state legislature passed a bill last month that prohibits cities from adopting various local ordinances, including increases in the minimum wage. Cities must raise their wages by August 28, before the bill takes effect.
Missouri’s Republicans must be threatened by the evidence that a living wage is overdue and necessary. According to the Economic Policy Institute and the National Employment Law Project, “the minimum wage in 2014 was 24 percent below its 1968 level despite the fact that U.S. productivity more than doubled over that period.”
These same Republicans are also threatened by the legislative support raising wages has gained. In fact, 29 states and the District of Columbia, as well as 21 cities and counties, have recently set their minimum wages above the “inadequate federal rate of $7.25,” according to the same EPI and NELP report.
One of the states trying to also get on board is New York. Last month, New York governor Andrew Cuomo proposed a wage increase for fast-food workers in the state.
In his New York Times opinion piece, Cuomo detailed how in fact raising wages boosts our economy. “More than 600 economists, including seven Nobel Prize laureates, have affirmed the growing consensus that raising wages for the lowest-paid workers doesn’t hurt the economy. In fact, by increasing consumer spending and creating jobs, it helps the economy. Studies have shown that every dollar increase for a minimum-wage worker results in $2,800 in new consumer spending by household,” wrote Cuomo.
According to the National Employment Law Project, fast-food employment in the state has grown “57 percent between the years 2000 and 2014. Private sector jobs overall grew 7 percent during the same period.” In New York City, fast-food employment” grew even faster—at the rate of 87 percent, to almost double its level 15 years ago.”
Raising the minimum wage is common sense if we want to have a thriving middle class and a strengthened economy. EPI and NELP have both outlined who will benefit from a wage increase – in short, over 35 million Americans.
Mayor [Slay] stands behind his plan with confidence. “Make no mistake about it. We are raising the minimum in STL. There are arguments against a minimum wage and a higher minimum. They are not as good as the arguments in favor,” he said.
This blog was originally posted on Our Future on June 8, 2015. Reprinted with permission.
About the Author: The author’s name is Emily Foster. Emily Foster is a regular contributor to Our Future.
Wednesday, May 27th, 2015
It’s a good thing for pop music, honky-tonk feminism, and Canadian tax collectors that McDonald’s pays lousy wages. If the food stores paid their frontline workers enough to survive on, Shania Twain would still be working there, a shareholder claimed at the company’s annual meeting this week.
The unidentified man, who said he’d been a McDonald’s investor since 1990 according to BuzzFeed News, used a Q&A session to rattle off a list of successful celebrities like Twain, Amazon’s Jeff Bezos, and Hollywood star Sharon Stone who had worked in a McDonald’s earlier in their lives. “I’m sure if they were making $15 an hour, they’d still be working at McDonald’s,” he said, as thousands of current McDonald’s workers protested outside.
Twain has now been making music professionally for about as long as the anonymous commentator has held McDonald’s stock. But in high school, the future star worked at an Ontario McDonald’s. “I learned tons about the meaning of service there,” she told Time in 2002. As an elementary school-aged kid, she’d been singing in talent shows and open mics.
Twain’s parents were killed in a car crash when the singer was in her early 20s. She kept singing, now at a vacation resort, to support her three younger siblings. By 1991, she had a small contract with a Nashville country label. Her second album and subsequent hits made her a superstar by the late 1990s.
It is of course possible that the orphaned college-aged Twain would have stayed in the hamburger business instead of pursuing her musical talent. Attempts to contact Twain’s representatives were unsuccessful.
The minimum wage in the early 1980s in Ontario was about $2.85 an hour, in American dollars, which had the same buying power as $6.72 per hour today. McDonald’s recently committed to paying at least $1 above the local minimum wage in the roughly 10 percent of store locations that it directly controls, meaning that many of the company’s workers are already earning well above what Twain did even after adjusting for inflation.
It’s hard to fathom how moving those workers up to $15 an hour would generate such a comfortable living that frycooks with enough star power to get them noticed would instead settle for a career inhaling grease fumes. Someone working full-time without vacations at $15 an hour would earn about $31,200 per year, before taxes. But to survive for a year in Green Bay, Wisconsin — a blue-collar town across the Great Lakes from the mining town where Twain grew up — a family of two would need roughly $48,000 per year in income according to the Economic Policy Institute’s Family Budget Calculator. For the sort of household Twain lead after her parents’ deaths, with three children and one head-of-household, it’d take about $89,121 a year to afford housing, child care, health care, taxes, food, and transportation for the year in Green Bay.
$15 an hour wouldn’t support a family, then, but it would mean that McDonald’s workers could stop relying on food stamps and other public assistance programs. The company is only able to pay wages so far below the cost of living because anti-poverty programs are there to step into the gap. McDonald’s low wages are effectively subsidized by taxpayers to the tune of millions of dollars per year.
The shareholder’s broader argument — that McDonald’s is a stepping stone rather than a career, and that it pays accordingly — is similarly flimsy on the evidence. Low-wage jobs like these are far more likely to be a dead end than the opening stride up the career ladder. The common perception that most fast food workers are young people just starting into the job market is incorrect. Most are adults, not dependents making extra money over the summer to mollify their parents. And a full 20 percent of all American children has a parent like Alicia McCrary who works the kind of job that would benefit from a higher minimum wage.
McDonald’s is undeniably aware of how far away from economic security it leaves its people. Until recently, the company maintained a public website with a sample budget for workers that included such fanciful projections as spending $0 on heating a home and getting health insurance for $20 a month. It has also recommended that struggling workers sell their Christmas presents for cash to make ends meet.
McDonald’s continues to hold out against protests, strikes, and legal challenges to its business model after more than two years of sustained worker agitation for the higher wage and union representation. If the company won’t go to $15, the $15 hourly wage may come to it. This week, Los Angeles became the second American metropolis to adopt the $15 minimum wage, following in Seattle’s footsteps from last year. State and local governments elsewhere have been raising their minimum wage laws significantly in recent years as well. The momentum for significantly higher pay in service-sector jobs has already induced some major retailers to voluntarily raise their pay in the same limited way that McDonald’s has done. Competitors from Costco to Wegman’s to Seattle-area burger chain Dick’s Drive In have built their business model around paying a living wage and valuing workers as an asset rather than targeting them as a cost-cutting opportunity. And while fast food companies sometimes protest that they couldn’t afford to do business at a $15 hourly wage, that argument doesn’t impress economists much.
This blog was originally posted on Think Progress on May 22, 2015. Reprinted with permission.
About the Author: The author’s name is Alan Pyke. Alan Pyke is the Deputy Economic Policy Editor for ThinkProgress.org. Before coming to ThinkProgress, he was a blogger and researcher with a focus on economic policy and political advertising at Media Matters for America, American Bridge 21st Century Foundation, and PoliticalCorrection.org. He previously worked as an organizer on various political campaigns from New Hampshire to Georgia to Missouri. His writing on music and film has appeared on TinyMixTapes, IndieWire’s Press Play, and TheGrio, among other sites.
Thursday, May 21st, 2015
In the largest protest of its kind, thousands of McDonald’s employees stormed the company’s headquarters today to demand that it stop spending millions manipulating stock prices, and start paying workers a living wage. McDonald’s cashiers and cooks came to the company’s shareholders meeting, at its corporate headquarters in Oak Brook, Illinois. More than 100 were arrested for refusing to leave the property.
Marching with them were Service Employees International Union president Mary Kay Henry; Moral Mondays movement leader Rev. William Barber; Rev. Marilyn Pagán Banks of North Side Power/A Just Harvest in Chicago, Illinois; and Rev. Rodney E. Williams of the Swope Parkway United Christian Church in Kansas City, Missouri
The company, which banned media from its shareholders meeting on Tuesday, responded by shutting down its corporate headquarters.
McDonald’s is already under fire worldwide for dodging €1 billion in corporate taxes in Europe, and violating labor laws in Brazil. Now its in hot water back home for a share buyback scheme designed to inflate the company’s stock price, which means more money in the already well-lined pockets of shareholders and company executives. The company recently announced plans to return $18 to $20 billion to shareholders by 2016, through dividends and share buybacks.
Thousands of workers swarmed the company’s headquarters to protest McDonald’s spending nearly $30 billion manipulating stock prices instead of paying its workers a livable wage. Some carried blown-up copies of their paychecks to illustrate how little McDonald’s invests in its workers vs. how much is spends repurchasing shares.
Christine Owens, executive director of the National Employment Law Project released a statement in support of the protest:
“McDonald’s workers are rightly bringing the fight for $15 an hour and the right to form a union to their employer’s doorstep. For too long, the McDonald’s business model has served to enrich executives and short-term shareholders at the expense of workers and taxpayers. It’s time McDonald’s face the people who fry its fries and serve its customers but who are forced to pay for groceries with food stamps because McDonald’s does not pay them enough to feed their families.
“In the last decade, McDonald’s spent $30 billion on share buy backs—a widely discredited and short-sighted strategy to pump up the value of its stock. Spending billions on buybacks may provide short-term payoffs for a handful of rich investors, but it does nothing to benefit the company’s hundreds of thousands of employees, who are barely making ends meet. In fact, it misplaces resources that would be better used investing in growing the company or raising worker pay.
“More than half of fast-food workers are forced to rely on public assistance to support themselves and their families. McDonald’s costs taxpayers $1.2 billion every year in public assistance. McDonald’s is a $5 billion global corporation; its employees should not need to rely on food stamps, and taxpayers should not be subsidizing its profits.
“Today, as the workers protested, New York Gov. Andrew Cuomo’s Wage Board held its first hearing to significantly raise pay for fast-food workers across the state. And just yesterday, Los Angeles became the biggest city yet to vote for a $15 minimum wage, which is fast becoming a new baseline for workers across the country. The McDonald’s workers who are standing up and fighting for $15 and union rights are winning. This fight is not theirs alone—all of us have a stake in it. And when they finally get $15, all of us will be better off.”
The protest comes on the heels of the largest-ever strike against the fast food industry last month, when workers joined walkouts in 236 cities, as well as strikes and protests in 40 countries.
This blog was originally posted on Our Future on May 20, 2015. Reprinted with permission.
About the Author: The author’s name is Terrance Heath. Terrance Heath is the Online Producer at Campaign for America’s Future. He has consulted on blogging and social media consultant for a number of organizations and agencies. He is a prominent activist on LGBT and HIV/AIDS issues.
Friday, May 15th, 2015
Facebook issued new employee benefit guidelines that raise minimum pay to $15 and extends leave for third-party contract employees who work behind the scenes on the social network’s campuses. In a blog post Tuesday, Facebook’s chief operations executive Sheryl Sandberg wrote that contractors and vendors in U.S. will have to adhere to new standards, including a $15 minimum wage, at least 15 days paid leave for vacation, sick days and holidays, and a $4,000 new child benefit for parents who don’t get paid parental leave.
Effective May 1, the new benefits will cover contract employees who work as cooks, janitors, security guards and other support staff at Facebook’s headquarters in Menlo Park, California. The company plans to extend the benefits to third-party vendors with more than 25 employees at its other 16 campuses in the U.S. over the next year.
Facebook will also absorb extra costs from the new program until contract companies can meet the new standards, a Facebook representative told the Wall Street Journal. The new program, which Sandberg said will primarily benefit women who make up two-thirds of the minimum wage workforce, aims to bring temporary or contract workers closer to the perks Facebook employees get, such as three weeks vacation, parental leave and new baby bonuses.
The move also follows a strong backlash from Silicon Valley’s invisible workforce. The employees tech companies lean on to provide the benefits full employees get such as free transportation, meals, security and personal grooming services, often face untenable work schedules with skimpy compensation by contracting companies. Earlier this year, shuttle bus drivers for Facebook employees unionized to fight grueling shifts and better pay. Amazon, which has frequent labor disputes, recently removed a controversial clause in its employment contract that banned seasonal and contract workers from getting jobs at companies that may only remotely compete with the online retailer.
Google hired more than 200 security guards last year instead of contracting the services out, giving them the same benefits — retirement, health insurance and paternity leave — as the company’s other employees. In a less traditional move, Apple and Facebook also expanded their health benefits, allowing female employees to freeze their eggs under the company’s insurance plans.
This blog was originally posted on Think Progress on May 13, 2015. Reprinted with permission.
About the author: The author’s name is Lauren C. Williams. Lauren C. Williams is the tech reporter for ThinkProgress with an affinity for consumer privacy, cybersecurity, tech culture and the intersection of civil liberties and tech policy. Before joining the ThinkProgress team, she wrote about health care policy and regulation for B2B publications, and had a brief stint at The Seattle Times. Lauren is a native Washingtonian and holds a master’s in journalism from the University of Maryland and a bachelor’s of science in dietetics from the University of Delaware.
Thursday, May 14th, 2015
Last week, New York Gov. Andrew Cuomo (D) announced that he is taking advantage of a state law to raise minimum wages without the involvement of the legislature. He’s not the only governor with that power; others could also follow suit.
New York State law gives the labor commissioner the authority to convene a wage board to investigate whether the minimum wage in a specific job — or even all of the jobs in the state — are adequate, and to issue a “wage order” to increase it without the involvement of state lawmakers. On Wednesday, Cuomo announced that he would direct the commissioner to investigate wages in the fast food industry. New York was the home to the first strike in the fast food industry demanding a $15 minimum wage and has been home to them as they continued to spread across the country.
But Cuomo isn’t the only governor with the power to set a higher minimum wage without approval from a state legislature. According to an analysis from the National Employment Law Project (NELP), state laws in California, Massachusetts, New Jersey, and Wisconsin all empower their governors in similar ways. “There was a time when the minimum wage was less politicized and there was a sense that it should be at a level adequate to deliver decent incomes for workers,” explained Paul Sonn, general counsel at NELP. “These laws are still on the books in a number of places.”
States have already been raising their own minimum wages, to the point that the majority have a higher wage than the federal level of $7.25. But some state lawmakers haven’t been taking action. “Where the legislative process won’t deal adequately with the minimum wage, governors should dust [these laws] off and use them aggressively to deliver the wages that workers need,” Sonn argued. “Governors in states with this authority should be using them more frequently and more creatively to address the problem of low wages.”
One example could be California, which has a Democratic governor, Jerry Brown, who already signed a minimum wage increase to $10 by 2016 back in 2013. “Cuomo is saying, ‘I’m going to make New York a progressive leader with the strongest minimum wage in the nation,’” Sonn said. “Jerry Brown could do the same thing.” A spokesman for the governor’s office told ThinkProgress he wasn’t aware of similar options to what Cuomo did in California, but noted that there are other new bills and proposals to raise the wage.
The authority can also be used against governors who aren’t supportive of higher minimum wages. That’s already happened in Wisconsin. There, a state statute says that all wages in the state have to amount to no less than a living wage and that any member of the public can file a complaint saying the minimum wage fails that standard. Last year, low-wage workers and worker organizing groups submitted 100 complaints to Gov. Scott Walker (R) alleging that the state’s $7.25 minimum wage violates the statute, although his administration rejected the complaints.
A similar fight could start brewing in New Jersey, where Gov. Chris Christie (R) has voiced his opposition to increasing the minimum wage. “The Governor of New Jersey has the power to raise wages for hundreds of thousands of workers,” Analilia Mejia, executive director of New Jersey Working Families, told ThinkProgress. “We will absolutely be calling on Gov. Christie to follow in the footsteps of Gov. Cuomo, who Christie has called his ‘separated at birth twin brother.’” She also said the issue would be brought up beyond Christie’s administration. “Over the coming year Working Families activists [will] be asking every potential gubernatorial contender in New Jersey’s 2017 election where they stand on using the state’s wage board to end poverty wages,” she said.
This blog was originally posted on Think Progress on May 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.