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12 Facts You Need to Know from the 2019 AFL-CIO Executive Paywatch Report

Friday, June 28th, 2019

The AFL-CIO this week released its annual Executive Paywatch report. AFL-CIO Secretary-Treasurer Liz Shuler discussed the federation’s findings during a call with reporters, highlighting the continuing pay inequity between workers and CEOs, discussing the impact of the Trump administration’s tax law on executive compensation and pointing out some of the worst offenders among major corporations.

About the report, Shuler said:

Here’s the key point: Even with that extra cash, wages are not keeping up with inflation. The average worker isn’t making enough to cover rent for a two-bedroom apartment in 15 of the largest cities across the country! Meanwhile, 40% of hourly workers have nothing saved up for an emergency, while 75% have less than $500.

We know this equality gap isn’t new. Over the past decade, the average S&P 500 CEO’s pay increased by more than $5 million, while the average worker only saw an increase of less than $800 a year. Not surprisingly, the CEO-to-worker pay ratio remains high: 287 to 1.

I’ll repeat that: 287 to 1. Meaning the average CEO earns 287 times what an average employee earns.

This disparity represents a fundamental problem with our economy: Productivity and corporate profits are through the roof, but wages for working people are flat—and staying flat.

Here are 12 key findings from the report that illustrate Shuler’s words:

  1. The average S&P 500 company CEO-to-worker pay ratio was 287 to 1.
  2. In 2018, CEOs of S&P 500 companies received, on average, $14.5 million in total compensation.
  3. This year marks the first where nearly all S&P 500 companies have disclosed the pay ratio between their CEO and median employee. This important disclosure did not come easy. Major corporations and industry groups lobbied long and hard to hide this valuable information from shareholders and the general public.
  4. The average S&P 500 CEO’s pay has increased by $5.2 million over the past 10 years, a CEO pay increase of more than half a million dollars annually.
  5. The average U.S. rank-and-file worker’s pay has increased only $7,858 over the past 10 years, a pay increase of less than $800 per year annually.
  6. Sixty of the largest U.S. companies paid $0 in income taxes in 2018 despite being profitable, including corporations like Amazon, Netflix, Delta and General Motors.
  7. Corporate income tax collections fell by $93 million in fiscal year 2018 after the passage of the 2017 Republican tax cut, a 31% drop.
  8. Stock buybacks by the top 15 U.S. companies with the largest holdings of cash abroad spiked dramatically after the 2017 corporate tax cut on overseas profits. Ten of the largest U.S. companies—Amgen, Apple, Bank of America, Cisco Systems, Citigroup, Facebook, JP Morgan, Microsoft, Oracle and Wells Fargo—combined to buy back more than a quarter-billion dollars of their own stocks in 2018. Not surprisingly, the average CEO pay for these companies increased dramatically as well.
  9. Tesla CEO Elon Musk was the highest paid CEO in 2018. His compensation package was estimated to be worth nearly $2.3 billion, although many doubt that he can achieve his performance targets. Tesla had the highest pay ratio out of all companies: 40,668 to 1.
  10. On the other hand, 14 companies paid their CEO one dollar or less in 2018.
  11. The highest pay ratio for S&P 500 companies was at clothing retailer Gap, where the pay ratio was 3,566 to 1 and the median employee earned $5,831 (a part-time sales associate).
  12. The lowest pay ratio in the S&P 500 was at Alphabet (parent of Google), where its co-founder and CEO Larry Page received just $1 compared to its median employee pay of $246,804.

In conclusion, Shuler said:

Bottom line: For too long, corporate greed and rigged economic rules have created a relentlessly growing pay gap between CEOs and the rest of us. It’s why everything from a college education to retirement security to gas prices are getting harder and harder for people to afford. We see it every day in communities across the country. And that must change.

Our economy works best when consumers have money to spend. That means raising wages for workers and reining in out-of-control executive pay. This year’s report is a stark reminder that working people must use our collective voice to form bigger, stronger unions and rewrite the economic rules once and for all.

This article appeared originally in Aflcio on June 27, 2019. Reprinted with permission.

Dems to yank bill to raise congressional pay after backlash

Tuesday, June 11th, 2019

Sarah FerrisHeather CaygleLaura Barron-Lopez House Democratic leaders are postponing consideration of a bill that would include a pay raise for members of Congress, after facing a major backlash from the party’s most vulnerable members.

Top Democrats agreed in a closed-door meeting Monday night to pull a key section of this week’s massive funding bill to avoid escalating a clash within their caucus over whether to hike salaries for lawmakers and staff for the first time in a decade, multiple lawmakers confirmed.

At least 15 Democrats — mostly freshmen in competitive districts — had pushed to freeze pay after some Democratic and Republican leaders quietly agreed to the slight pay increase earlier this month.

Majority Leader Steny Hoyer (D-Md.) confirmed to POLITICO after the meeting that he “thinks” they would pull the bill so that Democrats can resolve the issue of congressional pay raises.

The issue flared up in the Democratic leadership meeting on Monday, where there was an intense discussions of whether to force members to go on the record about a pay raise, which some battleground Democrats believed would create a target on their back in 2020.

“Nobody wants to vote to give themselves a raise. There’s nothing good about that,” said Rep. Katie Hill (D-Calif.), who attended Monday’s meeting.

But Hill said she also believed the issue deserved more discussion to ensure that stagnant pay wasn’t deterring average Americans from running for office — particularly if they already live in districts with high costs of living.

The potential vote set off Democratic political consultants who warned that if members were on the record supporting a pay raise for themselves it could be seen as tone deaf. One strategist called it “political suicide” for freshman Democrats in swing districts if they were made to take the vote.

During a monthly Democratic Congressional Campaign Committee held Monday with staffers who handle communications for the Frontline program, which protects members in battleground seats, a Democratic pollster who was invited to brief staffers on different issues, raised concerns about the pay increase.

Jefrey Pollock, the president of Global Strategy Group, told staffers and DCCC in the meeting that a vote to raise lawmaker’s pay was “problematic.”

“It feels like a potential ready-made attack ad,” Pollock told POLITICO Monday evening.

Several Democrats in battleground seats have scrambled behind the scenes to convince Democratic leaders, including Hoyer, to backtrack on the decision. Several have personally approached Hoyer to protest the move after he and other party leaders agreed to the cost-of-living-increase. It would amount to an extra $4,500 for members, who currently make $174,000.

Rep. Joe Cunningham (D-S.C.) — who sits in a district that Trump carried by more than six points — warned Hoyer on the floor last week that the move would be bad politics and bad policy, according to a Democratic aide familiar with the discussions.

Cunningham later authored his own amendment to halt the pay increase. Similar amendments were also drafted by freshman Democrats like Rep. Ben McAdams (D-Utah) — whose district leans Republican by 12 points, and Rep. Anthony Brindisi (D-N.Y.) — whose district favors Republicans by six points.

And even if Congress does approve the pay hike, several vulnerable Democrats, including Cunningham and Rep. Dean Phillips (D-Minn.), have vowed to send any additional cash back to the Treasury or donate it to charity.

The House still plans to begin voting on the massive spending package to fund several agencies but will hold off on the section of the bill that sets funding levels for both branches of Congress — creating an unexpected scramble for congressional appropriators.

Without action on the floor, the pay increase would automatically go into effect under current law. Democratic leaders would need to allow a specific vote to block the cost of living increase, which members have done every year for a decade.

Democratic spending leaders have said the pay raise has bipartisan support. But it carries huge political risk for both parties. Congress hasn’t given itself a pay hike since the depths of Great Recession in January 2009.

Several battleground Democrats were infuriated by their leadership’s decision to move forward, which they saw as inviting attacks from Republicans back home.

The National Republican Campaign Committee, the GOP’s campaign arm, seized on the issue last week and blasted House Democrats as “socialist elitists” for considering a cost of living raise in the upcoming spending package.

But it was later revealed that top Republicans, including House Minority Leader Kevin McCarthy, had already backed the measure, and even agreed not to attack the other party over it in a private meeting last week. The NRCC then removed its release denouncing Democrats.

Democrats in Monday’s leadership meeting first blamed Republicans for the blow up, complaining that McCarthy and the GOP campaign arm were trying to capitalize on the issue to score political points after previously agreeing not to do so. But then Hoyer said not only would McCarthy and House Minority Whip Steve Scalise support the increase but the NRCC executive director was also on board, according to sources familiar.

Leaders in both parties have blamed the stagnant pay for turning away qualified congressional candidates and staff. When adjusted for inflation, lawmakers’ salaries have decreased 15 percent since 2009, according to the Congressional Research Service.

Melanie Zanona contributed to this story.

This article was originally published by the Politico on June 11, 2019. Reprinted with permission. 

About the Author: Sarah Ferris covers budget and appropriations for POLITICO Pro. She was previously the lead healthcare and budget reporter for The Hill newspaper.

A graduate of the George Washington University, Ferris spent most of her time writing for The GW Hatchet. Her bylines have also appeared at The Washington Post, the Houston Chronicle and the Center for Investigative Reporting.

Raised on a dairy farm in Newtown, Conn., Ferris boasts a strong affinity for homemade ice cream, Dunkin Donuts coffee and the Boston Red Sox.

About the Author: Heather Caygle is a Congress reporter for POLITICO. Before coming to POLITICO, Caygle was a congressional reporter for Bloomberg BNA, primarily covering transportation but also dabbling in Hill action on tax reform, agriculture, appropriations and the Postal Service. Her work has also been featured on the WashingtonPost.com and WAMU.

Caygle, an Alabama native, is a graduate of the University of Alabama at Birmingham and received her master’s from American University in Washington. She loves rooting on the Alabama football team — Roll Tide — and spending time with her corgi/chihuahua mix named Biggie Smalls.

About the Author: Laura Barrón-López is a national political reporter for POLITICO, covering House campaigns and the 2020 presidential race.

Barrón-López previously led 2018 coverage of Democrats for the Washington Examiner. At the Examiner, Barrón-López covered the DNC’s efforts to reform the power of superdelegates and traveled to competitive districts that propelled Democrats into the House majority. Before that, Barrón-López covered Congress for HuffPost for two and half years, focusing on fights over fast-track authorization, criminal justice reform, and coal miner pensions, among other policy topics in the Senate.

Early in her career, she covered energy and environment policy for The Hill. Her work has been published in the Oregonian, OC Register, E&E Publishing, and Roll Call. She earned a bachelor’s in political science from California State University, Fullerton.

Baltimore May Be the Next City to Adopt a $15 Minimum Wage

Tuesday, June 21st, 2016

Bruce Vail

The national movement toward a minimum wage of $15 an hour is picking up steam in Baltimore, with a key test of strength for the local movement expected before the end of the summer.

The City Council’s Labor Committee met this week to begin the process of moving legislation to a vote, hearing testimony from supporters and opponents, and setting the stage for a full Council vote in late July or August.

“We’re making progress. I’m encouraged,” says Councilwoman Mary Pat Clarke (D), the chief sponsor of the legislation. Powerful opposition from Baltimore business interests is apparent, she tells In These Times, but that is to be expected. On the other hand, support is strong from a majority of the members, Clarke adds, so proponents are pushing forward for a full Council vote just as soon as practical.

“We hope to get this passed in August or September,” says Ricarra Jones, a political organizer for 1199SEIU. Opponents are “trotting out the same old discredited (economic) theories,” she says, but the momentum of successful $15 minimum wage fights in California, New York, Seattle, and Washington, D.C., should help push the Baltimore effort forward.

Jones says local labor unions are rallying in favor of the higher minimum wage. Aside from SEIU, prominent in the coalition are the Baltimore Teachers Union (an affiliate of American Federation of Teachers), the American Federation of State, County and Municipal Employees (AFSCME), and UNITE HERE. Ernie Grecco, President of the Metropolitan Baltimore Council AFL-CIO Unions, adds that support is “unanimous’ among the 160 local labor organizations affiliated with the group.

As reported earlier at In These Times, Clarke’s bill would raise the minimum wage in steps from the current $8.25 an hour to $15 by 2020. It would then establish a cost of living adjustment (COLA) so that the wage would rise annually thereafter, based on inflation statistics. Significantly, it would also eliminate the so-called “tipped wage,” the special sub-minimum of $3.63 an hour that applies to waiters, waitresses, bartenders, and other servers who receive tips as part of their daily work.

Melvin R. Thompson, a lobbyist for the Restaurant Association of Maryland, focused on the tipped wage during his testimony to the Labor Committee June 15. “Passage of this legislation will force many employers to eliminate jobs because paying such high minimum wages to unskilled, entry-level workers will be unsustainable for businesses that utilize such labor. If passed, this legislation will ultimately hurt the very people it is intended to help,” he told the committee.

The Restaurant Association commissioned a study that found the $15 minimum would cause the loss of about 3,500 jobs in the city, Thompson added. One restaurant manager, identified as an official of the Ruth’s Chris Steak House chain, asserted that the chain would close at least one, or possibly two, of its locations in the city if $15 legislation passed.

These voices against raising the wage were joined by executives from the Greater Baltimore Committee and the Downtown Partnership of Baltimore, two influential Chamber of Commerce-like organizations representing business owners.

In sharp contrast to the well-tailored suits and slick presentations of the lobbyists was the testimony of Vonzella Barnes, a housekeeper at the Horseshoe Casino, a recently-opened gambling palace controlled by the multinational Caesars Entertainment Corp.

Hired at the opening of the casino two years ago at a wage of $9.50 an hour, she has had no raises, the 46-year-old mother of two testified to the Labor Committee. The cost of the two children, and other regular monthly expenses, means that “I constantly have to borrow money from my Mom to pay the rent,” she said. “At her age, I should be giving her money, not borrowing from her.”

Barnes wore her red UNITE HERE union t-shirt as she testified, signifying that many union workers in Baltimore would benefit from the $15 minimum wage. UNITE HERE and several other unions represent workers the casino, but even union wages in some of the lower-pay positions leave workers at near poverty levels.

Indeed, 1199SEIU members launched a series of short strikes against Baltimore’s Johns Hopkins Hospital in 2014 over a demand for a $15 minimum, but failed to achieve that is the final settlement. During that fight, it was exposed that hundreds of employees of the wealthy Hopkins Hospital were forced to rely on Medicaid, food stamps, housing subsidies, or other anti-poverty programs, to make ends meet.

Councilwoman Clarke linked her minimum wage proposal to Baltimore’s race riot last year, which exposed the dismal living conditions in the city’s low-income neighborhoods. “We’ve had this debate about minimum wage in Baltimore before, and the actions of the city have not been enough. This year has to be different – because last year was different. Baltimore has to change its ways,” she says.

This blog originally appeared at inthesetime.com on June 20, 2016. Reprinted with permission.

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’sDaily 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.

How A Giant Restaurant Conglomerate Teamed Up With Banks To Stiff Its Workers

Friday, May 13th, 2016

AlanPyke_108x108The struggling corporate giant behind The Olive Garden, Longhorn Steakhouse, and other national restaurant chains is forcing tens of thousands of workers to effectively pay rent on their own money.

Workers at Darden Restaurants chains are routinely told they must accept prepaid debit cards instead of paychecks, according to a new report from the worker organization Restaurant Opportunities Center (ROC) United. A quarter of workers surveyed said they asked to be paid some other way and were told the cards are their only option.

The practice helps the company, which came under intense pressure to cut costs from dissatisfied investors a couple years back. But it puts an expensive barrier between workers and their money.

The restaurant conglomerate has roughly 148,000 employees in the U.S. Half of those workers get payroll cards in lieu of standard paper checks. Each card shaves about $2.75 per pay period off of the company’s overhead, saving Darden as much as $5 million per year.

Darden’s bottom-line bliss means pain and chaos for those 70,000-plus workers. The cards come with a litany of fees: 99 cents for using it to pay utility bills, 50 cents if the card is declined at a cash register, $1.75 to withdraw money from an out-of-network ATM and 75 cents just to check the card’s balance. If a worker loses her card, she’ll pay $10 to have it replaced.

As Darden cuts its administrative costs, the banks that provide the cards rack up significant income on the back end. Federal Reserve Bank of Philadelphia researchers put median bank earnings at $1.75 per card per month back in 2012. That suggests Darden’s financial partners are pulling down about $1.5 million a year

Three in four Darden workers get hit with the out-of-network withdrawal fees, according to ROC United’s survey of 200 workers who are paid with cards. Half of them have no access to an in-network ATM near where they live or work, effectively guaranteeing they will be paying fees to access their own money.

And the $1.75 withdrawal fee is only on the card-maker’s side of the transaction. The out-of-network ATM itself will tack on another surcharge, averaging $2.88 per withdrawal — and pushing the worker’s cost to access their pay up to nearly $5 each time they convert the payroll card to actual cash.

More than half of the workers report having a balance hold placed on their cards after using them at a gas pump, a practice gas stations adopted to combat theft when pump prices were up near $4 a gallon. For a restaurant worker whose payroll card is based on the tipped minimum wage — as little as $2.13 an hour — there is hardly any slack to the card’s balance to begin with. Gas station holds can freeze as much as $100 at a time, but even the standard $50 hold can easily mean that the next time that worker swipes her card to pay for something, the machine will see an insufficient balance — and the payroll card company will hit the worker with another 50-cent fee for having her card declined.

Payroll cards like Darden’s have proven popular with low-wage employers in recent years. More than 7 million workers nationwide are now paid using the cards, the report notes — mostly at companies like Darden and McDonald’s that pay workers so poorly that they remain eligible for public assistance programs despite working full time.

The cards proliferated over the past decade, with advocates arguing they would benefit employees as well as generate savings for employers and revenue for banks. Employees without a bank account would avoid check-cashing fees, card proponents noted. But the cards’ own fees aren’t necessarily much cheaper — if at all — and many Darden workers who do have bank accounts report being denied access to standard payroll practices that would avoid fees altogether. One overall evaluation of the pros and cons of the cards from the National Consumer Law Center in 2013 hinged on this question of worker choice, and found the cards could be net beneficial so long as everyone has the chance to opt for a different mode of payment.

In at least one case, card fees ended up pushing workers’ take-home pay below the minimum wage. The workers sued the McDonald’s franchisee who they say forced them to accept the cards as payment, and Chase Bank did something out of character for a high finance powerplayer: It voluntarily gave money back to the workers, refunding all of the fees their payroll cards had incurred.

That case prompted a spate of state legislative actions to police the use of payroll cards more tightly, the ROC United report notes, but roughly half of the states still have no law governing the practice. And even the states that do regulate it in some fashion do not necessarily guarantee workers can access their pay fee-free.

UPDATE MAY 12, 2016 4:07 PM

A Darden representative told ThinkProgress the ROC United report is “completely false,” save for the out-of-network ATM fees and the 50-cent fee for point-of-sale denials, and accused the group of “wag[ing] a campaign of harassment and disparagement against our company for five years.” Starting June 1, those 50-cent fees will disappear, and employees will be able to use an additional 29,000 ATMs nationwide without paying fees, up from 50,000 currently. It is impossible that some managers tell workers the cards are required despite company policy to the contrary, spokesman Rich Jeffers said. “That’s just not the nature of our people, of our leaders in our restaurants,” he said.

This blog originally appeared at Thinkprogress.org on May 12, 2016. Reprinted with permission.

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. Follow @PykeA on Twitter.

Women With The Same Qualifications As Men Get Passed Over For Promotion

Sunday, December 28th, 2014

Bryce CovertEven when women have the same experience, tenure, and jobs as men, they have a much lower chance of being promoted, according to a new study.

Authors Astrid Kunze and Amalia R. Miller examined private sector employment data from Norway, known as a generally women-friendly country, between 1987 and 1997. They found that even when controlling for industry, occupation, age, education, experience, tenure, and whether workers are full or part time, women are 2.9 percentage points less likely to get a promotion than men. On top of that, they found that “[f]or men, fatherhood is associated with a greater chance of promotion,” but for women, “children have a negative effect on promotion rates and that effect is even more negative if they are younger.”

Chances of promotion aren’t much better even if women stick it out with one company. Women experience internal promotion rates that are 34 to 47 percent lower than for men. It also doesn’t matter whether they’re entry-level or at the top of their company: at every level, women are less likely to be promoted to the next rung by the following year.

Given how low their chances are of advancing, it may not be surprising that women are huddled toward the bottom of the hierarchy. The authors found that the lowest rank is over 80 percent female, while men make up more than 90 percent of the employees in the top three highest ranks. This problem is persistent. “Across all years in our data, women are never more than 6 percent of the top three ranks, on average, even as their overall share of the average workplace increases from 25 to 33 percent,” the authors write. Meanwhile, female bosses are rare: more than a quarter of the workers they looked at don’t have any women leaders, while just 1 percent has all female bosses. Here in the U.S., women make up less than 15 percent of executive officers.

The lack of mobility to higher ranking jobs also impacts the gender wage gap. In their data set, women make 76 percent of men’s pay (in the U.S., that ratio is currently a similar 78 percent). But within each job rank, women make between 88 to 98 percent of what men do, and taking job rank into consideration decreases the gap by 59 percent.

Since the data for the study was collected, Norway and some other countries have implemented a gender quotas for women on boards, seeking in part to increase women’s representation in firms generally by promoting women in leadership. That may be a smart way to address it, as the study found that the more female bosses there are, the more likely it is for women below them to get promoted, while men aren’t impacted. Increasing the share of bosses that are women by .24 percent would decrease the gender gap in promotions by more than 40 percent. This “suggests that one reason for women’s slow progress to the top of corporate hierarchies is the historical male domination of those ranks,” the authors conclude.

This blog originally appear in thinkprogress.org on December 22, 2014. 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.

McDonald’s Urges Franchises to Open on Christmas Day … Without Overtime Pay

Wednesday, December 19th, 2012

Mark E. Andersen

In November McDonald’s saw a 2.5 percent increase in November sales. This is after the fast food giant saw a decrease in sales of 2.2 percent in October. So why was there increase in sales? Was the pork-like substitute McRib back? Was there a shortage of Ore-Ida french fries in your local grocer’s freezer causing a run on McDonald’s across the country?

Nope, none of the above; the corporate overlords at McDonald’s urged franchisees to be open on Thanksgiving day, a day that most franchise stores are closed. A Nov. 8 memo from McDonald’s USA Chief Operating Officer Jim Johannesen stated,

“Starting with Thanksgiving, ensure your restaurants are open throughout the holidays. Our largest holiday opportunity as a system is Christmas Day. Last year, [company-operated] restaurants that opened on Christmas averaged $5,500 in sales.”

On Dec. 12 Mr. Johannesen doubled down and sent out another memo to franchise owners stating that average sales for company-owned restaurants, which compose about 10 percent of its system, were “more than $6,000” this Thanksgiving. That adds up to be about $36 million in extra sales.

So with all those extra sales one must ask if employees are reaping any benefits from being open on the holidays. The answer is dependent on the franchise owner; however, in the case of company owned stores the answer is a big fat no. According to McDonald’s spokesperson Heather Oldani, “when our company-owned restaurants are open on the holidays, the staff voluntarily sign up to work. There is no regular overtime pay.”

It is bad enough that McDonald’s pays crap wages but then they turn around and refuse to pay overtime for employees who volunteer to give up their holidays so that McDonald’s can make several million dollars. I am also willing to bet that most staff does not readily volunteer to work on Christmas day. This just gives me one more reason to not eat at the Golden Arches.

This post was originally posted on December 18, 2012 at The Daily Kos. Reprinted with Permission.

About the Author: Mark E. Andersen is a 44 year old veteran, lifelong Progressive Democrat, Rabid Packer fan, Single Dad, Part-time Grad Student, and Full-time IS worker. Find me on facebook my page is “Kodiak54 (Mark Andersen)”

Did a Sodexo Manager Really Just Say That?

Friday, December 11th, 2009

Image: Brad LevinsonAs over 1,500 students at Loyola Marymount University begin a massive boycott of Sodexo’s dining facilities this week, Sodexo’s general manager for the area, Lisa Farrell, has issued a revealing quote that may enrage workers and students all over the country.

The school’s newspaper, the Los Angeles Loyolan has the story of the boycott, which students are staging for reasons including “reducing the prices of perishable items such as fruit, making price reductions for students who choose to forgo meat and ensuring that workers are paid a living wage,” according to student Megan Lynch.

According to Lynch, Sodexo justifies their “high prices” by explaining that “workers are paid the local living wage of $11.25 per hour.” The students, however, “have come to find that many Sodexo employees make $8.50 to $9.00 an hour,” reports the Loyolan.

But here’s the kicker: within the article itself, Sodexo manager Lisa Farrell unintentionally admits that Sodexo does not pay a living wage, as defined by the City of Los Angeles’s living wage law. Here’s what she’s said to the Loyolan:

“The current L.A. living wage is … $10.30 an hour, with health benefits, or $11.55 an hour if no health benefits are offered. Here at LMU, we have a minimum starting wage of $9.05 per hour plus one meal per shift valued at $1.25…Sodexo offers full benefits to all full-time employees.”

The last time we checked, $9.05 an hour does not equal $10.30 an hour, nor does it equal $11.55 an hour.

And what about that free meal per shift valued at $1.25? Even if we gave Sodexo the benefit of the doubt and included that figure in lieu of actual pay – which would be extremely unusual – that would mean that a worker making $9.05 an hour and receiving the $1.25 meal would only make the living wage for the hour that they’re afforded that meal. For the rest of the hours they’re working, they’re still making $9.05. Nice try, though.

It’s also unclear how many of the Sodexo workers on site actually are afforded full-time positions that provide health-care benefits- meaning that for these workers, they would have to make $11.55 an hour to meet the living wage guidelines – not the $8.50 and $9.00 that the students are reporting.

And how about a second look at the $1.25 figure? As Farrell admits, the meals that the workers are provided are “valued at 1.25.” Explain that to the students spending $10 for that meal, as LMU student John Twehill says he does.

*This post originally appeared in the SEIU Blog on December 9, 2009. Reprinted with permission from the author.

About the Author: Brad Levinson is new media strategist for SEIU, where he current serves as the new media lead for the organization’s Property Services division.  In addition to his daily role of designing and implementing new media programming for SEIU’s food service workers, security officers and janitors, his current work involves developing a functional model for successful online union organizing.  Brad’s primary interests include online organizing, emerging media trends, online video, online anthropology and culture, and digital divide issues.  He is a graduate of Drexel University and earned his masters in media and politics from Georgetown University.

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