Last week the voter-approved $15 minimum wage set for airport-related workers near the town of SeaTac, Washington, survived a recount and is now supposed to go into effect on January 1. The win sets a new standard for pay and benefits for hospitality and transportation workers, and will bring much-needed financial relief for low-wage workers who cater to millions of travelers at one of the country’s busiest international airports. SeaTac’s Proposition 1, which voters initially approved last month, will bring much-needed improvements to the lives of more than 6,300 workers who currently bring home less than $1,500 per month on average. Backers of the historic measure say the new minimum wage for SeaTac workers will stimulate the local economy to the tune of $54 million per year.
Predictably, the corporate interests who’ve so far ended up on the losing side have no intention of simply bowing down to the will of the city’s voters.
This Walmart low-prices, low-wages thing isn’t working out so well — even for Walmart.
The company released its quarterly numbers last week, and they weren’t pretty. Same-store sales declined by 0.3 percent, and the company lowered its earnings-per-share forecast. Bad news wasn’t limited to Walmart. At the low end of the retail consumer market, Kohl’s reported similarly bad news; Macy’s, a little higher up the food chain, lowered its earnings forecast as well.
While Americans with money are boosting both the housing and auto markets, the growing number of Americans without are curtailing their shopping. As Douglas McMillon, chief executive of Walmart International, noted last week, “When we do see good things in the economy, sometimes they don’t immediately flow through to a paycheck. Remember how the average American lives.”
And who signs more paychecks than any private-sector employer on the planet?
I am of course glad to see President Obama focus the country on what he correctly identifies as the most pressing national problem, the crushing of the middle class. The solution he laid out in his address at Knox College, a middle-out economics which sees the middle class as the engine of the economy, is both good economics and a powerful political message. It is what progressives and Democrats need to keep emphasizing over and over again, both rhetorically and in their legislative agendas.
When it came to the broad foundations of policy, the president’s outline of the pillars of a strong middle class was on point: good jobs, quality education and job training, affordable health care, good housing, retirement security and strong neighborhoods.
Still, I found the speech disappointing. The president only nibbled at the biggest change in our economy, the relentless decline in good jobs.
I am a tipped worker at a restaurant, so according to Illinois law I only have to be paid 60 percent of the minimum wage, or $4.95 an hour. I am a single mother with a five-month-old son. I am worried because with the economy going so badly, people aren’t eating out as much or tipping as much. If things get worse and I can’t rely on my tips, then I am going to need to use things like food stamps. I am not able to save any money because I am living paycheck to paycheck, so if something unexpected happened I wouldn’t know what to do. We need this new law to raise the minimum wage because it would change the law for tipped workers so that they would get 100 percent of the minimum wage. We shouldn’t have to depend on something as unreliable as tips to survive.
The New York Times recently characterized the economic recovery that officially began in 2009 as a “golden era for corporate profits.” Indeed, corporate profits doubled between 2008 and 2011 and reached a record high.
However, these increased profits have fueled inequality and come at the expense of worker compensation. Profits are now a larger share of total national income, and wages and benefits are a smaller share than at any time since the 1960s. Over the last four decades productivity gains have overwhelmingly accrued to business and not labor. The Economic Policy Institute calculates that between 1973-2011 productivity increased by 80 percent, but median hourly compensation by only 11 percent.
The recovery has not lifted up those at the bottom of the income distribution, nor has it increased opportunity for the middle. According to the Women’s Foundation of California, one in three families in the state (with family members reporting a combined work effort of 39 or more weeks annually) are the working poor who earn less than $45,397 a year.
Business groups and their political allies have consistently attacked the idea of a minimum wage ever since President Franklin D. Roosevelt proposed it during the Depression to help stimulate the economy. And yesterday — the 75th anniversary of the Fair Labor Standards Act (FLSA), which FDR signed on June 25, 1938 to establish the minimum wage as well as the eight-hour day, paid overtime and child labor protections — their contemporary counterparts are still at it.
A recent report by the National Employment Law Project and the Cry Wolf Project, Consider the Source: 100 years of Broken Record Opposition to the Minimum Wage, chronicles the history of unchanging sky-is-falling rhetoric by business interests opposed to minimum wage laws.
Even today, business groups and their political allies still complain that the minimum wage violates employers’ freedom to set pay levels, forces business firms to cut jobs or even file for bankruptcy,
My cousin and I have stayed in touch over the years despite the distance — he grew up in a Texas border town and has lived his adult life in Phoenix. Both he and his wife have held well-paid positions in the health field. Like most families, when we visit, we avoid subjects in-laws shouldn’t talk about, including politics and religion. But this time, he brought up the topic of unions, so over the next several days we talked intermittently about unions and why low wage workers need them.
On our final evening together, we sat across from each other in one of those expensive Santa Monica restaurants named after its chef. I said, “So here is the bottom line for me: People who work all day should be able to provide shelter and food for their families, and they ought to have health care.”
“I don’t know that I disagree with that,” he replied.
For Merleane S., a 19-year-old, single mom, her work shift on March 15 included taking and filling orders at a fast food restaurant in Palm Coast, Florida. She was earning the state’s minimum wage of $7.79 per hour. Similar to other U.S. workers, she was trying to make sure her family was secure.
That same day, in the nation’s capital, lawmakers in the U.S. House of Representatives unanimously voted against an amendment to H.R. 803, a job training bill. That amendment would have gradually increased the federal minimum wage from $7.25 an hour to $10.10 an hour by the end of 2015.
The amendment marked one of the most recent efforts regarding an issue that is gaining momentum nationally — an increased minimum wage. If the idea is approved, it would affect millions of workers across the income spectrum, including the middle class.
The minimum wage is back on the rise. Last month Sen. Tom Harkin and Rep. George Miller introduced the Fair Minimum Wage Act of 2013, which would raise the federal wage to $10.10. State legislatures aren’t waiting. The New York state assembly approved an increase to $9 plus indexing, the New Mexico state senate approved an increase to $8.50, and the Hawaii state senate and house each passed increases.
But that hasn’t stopped the doomsayers. The conservative Cato Institute called the minimum wage “zombie economics.” Paul Ryan said that “history is very clear” that it “costs jobs.” Marco Rubio said that “We have a lot of history to prove” that “raising the minimum wage does not grow the middle class.”
In fact, the historical record is quite clear. “Consider the Source: 100 years of Broken Record Opposition to the Minimum Wage,
Our Nation so richly endowed with natural resources and with a capable and industrious population should be able to devise ways and means of insuring to all our able-bodied working men and women a fair day’s pay for a fair day’s work. A self-supporting and self-respecting democracy can plead no justification for the existence of child labor, no economic reason for chiseling workers’ wages or stretching workers’ hours.
Enlightened business is learning that competition ought not to cause bad social consequences which inevitably react upon the profits of business itself. All but the hopelessly reactionary will agree that to conserve our primary resources of man power, government must have some control over maximum hours, minimum wages, the evil of child labor and the exploitation of unorganized labor. –FDR, May 1937
In his recent State of the Union address,
In her Congressional testimony from 1959, Eleanor Roosevelt noted the repetitive quality of objections raised by minimum wage opponents over the previous five decades. More than 50 years later, it appears that nothing has changed.
Our new report, published with the National Employment Law Project, documents the rhetorical onslaught launched by minimum wage opponents over the past 100 years. Rather than approaching these claims at face value, we step back and review how minimum wage opponents have presented their case through roughly a century’s worth of public statements, congressional testimonies, editorials, media interviews, and other public records, devoting a critical eye to the trajectory of these criticisms over time.
Sample quotes from Consider the Source: 100 Years of Broken-Record Opposition to the Minimum Wage:
“Rome, 2,000 years ago, fell because the government began fixing the prices of services and commodities.
On Sunday the Los Angeles Times published a story about the important successes of campaigns to pass local minimum wage and living wage laws. However, while highlighting new developments that will impact local economies and the lives of workers, the Times missed the real story and forces behind this growing trend.
The piece focused on two ballot-box victories for living wage laws: a minimum wage for hotel workers in Long Beach and a citywide minimum wage increase in San Jose.
“The victories put these two California cities on the cusp of an emerging trend,” wrote Wesley Lowery. “Ballot initiatives, labor experts say, have the potential to rewrite labor’s playbook for how to win concessions from management.” Throughout the piece, Lowery presented the minimum wage ballot measures as a tactic put in place and managed from behind the scenes by labor leaders.
When President Obama proposed an increase in the federal minimum wage last month, you could almost hear conservative economists and pundits smacking their lips in anticipation. After all, there’s nothing that gets this crowd going like mandating a wage increase, even if it’s from the downright Dickensian $7.25 currently required, to a still paltry $9 — or just under $19,000 a year.
Minimum wage foes almost always base their opposition on the supposed damage that these laws do to the businesses that have to pay them and the workers who receive them. Despite reams of research to the contrary, they persist in claiming that minimum wage increases force businesses to lay off workers, hurting the very people who should benefit.
There is another argument, however, against minimum wage laws, one that was trotted out in a column by Slate’s Matt Yglesias. The real problem with these laws is not that they hurt workers and their employers,
Sustainable economies are built on good jobs. If people don’t earn enough money, they can’t keep the economy growing by buying goods and services.
This basic fact is lost on opponents of minimum-wage increases, who for decades have been arguing that these pay hikes hurt businesses, cause job loss and therefore are bad for the economy.
Repetition of an argument might keep it in the news, but it doesn’t make it factually credible. So it is with minimum-wage rejectionists, who have succeeded in getting at least equal time for their assertions with every proposed wage increase, even though their claims have been debunked over and over again.
It is no surprise, then, that the Reason Foundation’s Adam Summers in his op-ed in the Business Journal predicts dire consequences if California were to increase its minimum wage law (“Higher Minimum Wage Will Lower Job Prospects,” February 11).
(This post first appeared February 20 on Truthout and is republished with permission.)
Republicans were quick to criticize President Obama last week after he proposed raising the federal minimum wage from $7.25 to $9 during his State of the Union address, but now a poll shows that a majority of voters agree with the president that the current minimum wage is not a living wage and a hike is in order.
A Rasmussen Reports national survey released on Tuesday found that only 15 percent of voters believe the current minimum wage provides workers with enough money to live on, while 72 percent said $7.25 an hour is not a living wage.
Voters remain more closely divided on actually raising the minimum wage, with 54 percent in favor of the raising the minimum wage to $9 an hour and 36 percent opposed to the proposal.
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.
My friend pastors a vibrant congregation in the Mid-City area of Los Angeles. Her people reflect the neighborhood and the church worships in both Spanish and English. In a conversation this week I asked her how her folks were doing. Her voice dropped, and she shook her head. “There are no jobs,” she said, “and the ones who work can only get part-time hours.” With dismay, she said, “I don’t know how they are making it.”
I don’t either. At one extreme, high-end properties – homes that sell for several millions of dollars – had a banner year in 2012. Sales of super-expensive automobiles reached record levels. Exotic vacation destinations are packed. The number of jobs in Los Angeles County has reached about 4.3 million, almost the number we had before the Great Recession began five years ago, although there are now also more people looking for work than then.
Most of us know how badly Walmart treats its employees. Yet whenever the remedy of paying a living wage is proposed, opponents always argue that the cost to Walmart shoppers is too high, and that low-income consumers will be hurt the most.The question is: What will a living wage for Walmart workers cost Walmart shoppers?
First, some background. A 2005 study found that Walmart jobs in metropolitan areas pay less and are less likely to offer benefits. Other researchers demonstrated that Walmart workers earn on average 31 percent less than workers in large retail stores as a whole and about 60 percent of the wages of unionized workers. They also found that an astounding 75 percent of full-time workers with at least one year on the job made below $10 an hour and less than half were enrolled in Walmart’s cost-prohibitive health plan.
As the economy slowly rebounds, we need to ask what kind of recovery we want in Los Angeles.
Experts point to tourism as a key industry poised to help drive recovery and growth in our region. The potential is certainly there. Tourism is the largest employer in Los Angeles, accounting for one in ten jobs. And hotels in particular have recovered past pre-recession levels, with projections for strong growth. Industry analysts PFK Hospitality Research forecast revenue per available room in Los Angeles to grow by an average of 5.6 percent per year over the next five years – on top of an 11.7 percent increase this year. (For comparison, the long-run average is 3.3 percent.)
However, jobs in hospitality and tourism come in very different shapes. Some of our large hotels succeed while paying good middle-class wages and benefits. Others offer only poverty jobs that leave workers struggling to support themselves,
Tens of millions of Americans earn under $25,000 a year, and real wages in many of their lines of work have been stagnant for the past 40 years. California entrepreneur and magazine publisher Ron Unz has a suggestion for how to help them: “Perhaps the most effective means of raising their wages is simply to raise their wages.”
Specifically, Unz, in a paper for the New America Foundation, proposes raising the federal minimum wage to $12 an hour. This would, he concedes, raise prices of most things for all Americans and drive some enterprises out of business, but Unz argues that neither of these drawbacks would be terribly severe.
The cost rises would be minimal, and the sectors most threatened—ones that are magnets for illegal employment arrangements between undocumented workers and low-paying owners—impose external costs on society that outweigh their benefits to begin with. “Sweatshops and similar industries,” Unz writes,