In his State of the Union Address this month, President Obama called for a much-needed increase to the federal minimum wage. Almost four million American workers are paid at or below the minimum wage of $7.25 an hour for their work, adding up to about $14,500 per year, per person for a full-time, 40 hour per week job. This doesn’t come close to covering the cost of living for a single person, let alone a family.
In the food retail sector, unfortunately, raising the minimum wage might not make much of a difference to those employees that are most vulnerable. Grocery stores and other food retail outlets are already avoiding minimum wage and benefit requirements for many workers by keeping them in part-time jobs. Realistically, if a worker can’t get scheduled for 40 hours per week of work, then minimum wage requirements cease to be effective in ensuring an annual income floor.
With support from federal and state governments as well as private foundations, communities across the country are beginning to engage in efforts to increase the number of food retail outlets in low-income “food deserts.” This is tremendously important work – according to USDA statistics, almost 40 percent of low-income Americans lack adequate access to a full-service grocery store. But as a growing body of evidence shows, food retail outlets in low-income communities are more likely to pay the lowest possible wages and keep a majority of workers part-time than are similar retail outlets in higher-income communities.
One might ask, “Why do employers want to keep workers part-time? Can’t a business case be made for investing in employees?” The answer is simple: because they can get away with it. With high unemployment rates concentrated in low-income communities (to give one example, West Oakland’s unemployment rate is over 40 percent), employers are free to treat workers as expendable commodities. Employers know that these workers will take whatever hours they can get, even if it means waiting by the phone to hear whether they are on the schedule for that very day.
In some states, California included, the most egregiously exploitative practices are formally prohibited. If an employer sends a California worker home two hours into an eight hour shift because business is slower than usual, the employer must pay the worker for at least half (or four hours) of the hours that were originally scheduled. But perhaps unsurprisingly, research has shown that violations of the law are widespread, particularly in lower-income communities where workers are more desperate for work and have less access to legal representation and resources.
As we think about using tax credits, public investment funds, and other public resources to bring full-service grocery stores to low-income, underserved communities, we need to think creatively about how to hold these businesses accountable for providing good, sustainable jobs:
- Tax Giveaways – We should support efforts to reform California’s state enterprise zone tax giveaway program. The program costs taxpayers over $700 million a year, and it is so broad that it competes with efforts to bring retailers to underserved “food deserts.” It also ties tax credits to all new hires, regardless of whether these represent real jobs, and provides no incentives to compensate workers above the required minimum wage and benefits. The California Labor Federation and partner groups are leading efforts to reform enterprise zones in California – support their work by attending public hearings and responding to other calls for action.
- Local Incentives – In designing loan, grant, tax credit, or zoning incentives to draw full-service grocery stores to otherwise underserved food deserts, we should consider including a “good jobs” provision. This could be as simple as requiring benefits parity for full-time and part-time workers. This is a regulation used in Europe to avoid a disparity in fixed-costs between workers classified as full-time versus part-time. Another option would be to levy a fine when businesses go above a certain cap on the proportion of workers who are part-time.
- Enforcement – We need to engage as community members to help with the enforcement of existing labor laws. This means providing workers with access to essential legal resources, as well as acting as citizen investigators ourselves. As shoppers, we should be asking managers and workers about the store’s practices, making it known that we care about the quality of jobs for all workers in our community.
Access to full-service grocery stores and good, sustainable jobs in food retail will not solve all of the problems faced by low-income Americans. But as more of us begin to understand the link between these two important goals, and to work for solutions that encompass them both, we will start to see progress.
Sally Smyth is a student at UC Berkeley’s Goldman School of Public Policy. She is currently conducting research on food retail jobs with UC Berkeley’s Food Labor Research Center, the United Food and Commercial Workers Union (UFCW), and the Food Chain Workers Alliance. Her post first appeared on Unionosity and is republished with permission.