Demonstrators rally for better wages outside a McDonalds in Chicago, Thursday, Dec., 5, 2013. Fast-food workers and labor organizers are set to turn out in support of higher wages in cities across the country Thursday. Organizers say walkouts are planned in 100 cities, with rallies set for another 100 cities. But it’s not clear what the actual turnout will be, how many of the participants are workers and what impact they’ll have on restaurant operations.
Fast food workers won’t get the $15 living wage in time for Christmas, but their nationwide protests continue to draw attention to the growing chasm between the working poor and the super rich.
During an organized national day of action in early December, thousands of fast food workers went on strike in dozens of cities including Chicago, Boston, New York City, Los Angeles and Oakland.
It’s been more than four years since living wage advocates and low-wage workers won their last victory when the minimum wage was increased from $5.15 to $7.25.
According to a report on the minimum wage by the Economic Policy Institute, a Washington D.C. think tank, focused on low- and middle-income families:
“The value of the minimum wage peaked in 1968 at $1.60, which is about $9.44 measured in today’s dollars; the current minimum wage of $7.25 is 23 percent less than it was in 1968 in real terms.”
Even though economic productivity grew more than 80 percent between 1973 and 2011, EPI reported that “real hourly compensation of the median worker grew by less than 11 percent.”
Economists have found that if the federal minimum wage had kept paced with inflation and productivity growth, that wage would have reached $25 per hour.
According to the Labor Department, by 2014, 21 states and Washington D.C. will have minimum wages that exceed the federal minimum wage.
In recent months, President Obama has also expressed his support for a higher minimum wage.
President Obama stepped up his vocal support for a higher federal minimum wage, during a recent speech in Southeast, Washington, D.C., one of the nation capital’s poorest neighborhoods. Obama said that he’s not surprised that Americans are frustrated with Washington, after the government shutdown and the rocky rollout of healthcare.gov, but that he knows that their frustration runs deeper.
“Their frustration is rooted in their own daily battles — to make ends meet, to pay for college, buy a home, save for retirement. It’s rooted in the nagging sense that no matter how hard they work, the deck is stacked against them,” said President Obama.
Obama continued: “The combined trends of increased inequality and decreasing mobility pose a fundamental threat to the American Dream, our way of life, and what we stand for around the globe. And it is not simply a moral claim that I’m making here. There are practical consequences to rising inequality and reduced mobility.”
Practical consequences that include workers increasingly dependent on the very safety net programs that many Republican lawmakers want to cut.
In a report, titled “Fast Food, Poverty Wages: The Public Cost of Low-Wage Jobs in the Fast-Food Industry “ sponsored by the University of California, Berkeley, Center for Labor Research and Education and the University of Illinois at Urbana-Champaign Department of Urban & Regional Planning researchers found that “more than half (52 percent) of the families of front-line fast-food workers are enrolled in one or more public programs, compared to 25 percent of the workforce as a whole.”
Blacks account for 23 percent of front-line fast-food workers and 73 percent are women.
According to the report, “The federal minimum wage fails to provide sufficient income for workers to provide food, housing, health care, transportation and other basic needs for
When employers don’t pay their workers livable wages, the rest of us pick up the tab.
“Due to low earnings, fast-food workers’ families also receive an annual average of $1.04 billion in food stamp benefits and $1.91 billion in Earned Income Tax Credit payments. People working in fast-food jobs are more likely to live in or near poverty. One in five families with a member holding a fast-food job has an income below the poverty line, and 43 percent have an income two times the federal poverty level or less,” stated the report.
Bernard Anderson, professor emeritus at the Wharton School at the University of Pennsylvania in Philadelphia, said that consumer spending represents two-thirds of economic activity. Anderson added that if workers are not getting significant increases in their pay they’re not going to have as much to spend.
Anderson continued: ”When you increase the minimum wage, you give additional income to people who will spend most of that income. That will help the economy, it won’t hurt the economy.”
Steven Pitts, an economist and associate chair at the Labor Center at the University of California at Berkeley said that oftentimes people who oppose a hard minimum wage say that you can give workers any job and in a year they’ll be doing something else.
“There’s a narrative out there that says, ‘any job is okay, because it gives you a leg up,’ but that kind of mobility is false by and large in the aggregate,” said Pitts. “The whole image that it’s the first step on the ladder is not true. We have to separate the concern over any unemployment effects to considerable long-term mobility issues.”
In “The State of Working America,” EPI reported that 63 percent of Black children that begin life in bottom forth of the income scale will stay there as adults. Thirty-two percent of White children who start in the bottom fourth will remain in the bottom fourth.
Pitts continued: “There’s a myth about how someone started in the mailroom and now they run the corporation. That’s not going to be true for most folks.”
William Spriggs, chief economist for AFL-CIO, noted that the same people that decry raising the minimum wage for fast food workers had very little to say as corporate profits skyrocketed and CEO salaries soared following the Great Recession.
In April 2013, the Associated Press reported that Don Thompson, chief executive officer of the McDonald’s Corporation, saw his pay package increase $4.1 million in 201 to $13.8 million in 2012. Jim Skinner, Thompson’s predecessor, saw his pay package rise from $8.8 million to $27.7 million.
Spriggs scoffed at the idea that low-wage workers should bear the burden of criticism for higher prices at the register.
“How many people wrote an article about the pay increases that McDonald’s CEO received or asked how much it would cost you when you go to buy a hamburger at McDonald’s?” asked Spriggs.
Spriggs continued: “They want to write an article, because someone goes from $7.25 to $10 per hour. Honestly? You think that’s significant to the price of a hamburger, but ten million dollars is not?”
Ultimately, researchers say that the economy must improve significantly, before workers and livable wage advocates can put enough pressure on companies to raise wages.
“In an economy that is just not tight at all, where the unemployment rate doesn’t really reflect the number of workers that have left the labor force, workers don’t have any bargainin
g power to bid up their wages and to get better benefits,” said Elise Gould, the director of health policy research at the Economic Policy Institute. “Until we have a tighter labor market, we’re really not going to see any improvements there.”