Tag Archives: low-wage workers

How Americans Subsidize Companies that Pay Low Wages

While this article came out on tax day in the Washington Post in response to the national protests for a living wage, the facts still remain relevant until the issue is resolved, so we post the story here.

The facts speak for themselves; workers cannot subsist on the wages paid to most workers in the retail industries, including food service industry.  We have become accustomed to the convenience and abundance of cheap goods and cheap food but at what price? While this article focuses on Wal-Mart and McDonald’s, two the highest profile retail marketers in the country, almost the entire retail sector relies on a business model that passes their payroll cost onto the taxpayer.  Unlike the ideal “free market” of yore where companies compete on their own merits based on their pure wits and abilities, large companies have modeled their business enterprises on how well they can con consumers and con taxpayers into helping them to carry the burden of their cost of doing business — while they keep the profits for themselves.

Americans are spending $153 billion a year to subsidize McDonald’s and Wal-Mart’s low wage workers

How the minimum wage hurts us all.

Image from Wa-Po article, Andrew Burton, Getty Images

By Ken Jacobs

The low wages paid by businesses, including some of the largest and most profitable companies in the U.S. – like McDonald’s and Wal-Mart – are costing taxpayers nearly $153 billion a year.

After decades of wage cuts and health benefit rollbacks, more than half of all state and federal spending on public assistance programs goes to working families who need food stamps, Medicaid, or other support to meet basic needs. Let that sink in — American taxpayers are subsidizing people who work — most of them full-time  (in some case more than full-time) because businesses do not pay a living wage.

Workers like Terrence Wise, a 35-year-old father who works part-time at McDonald’s and Burger King in Kansas City, Mo., and his fiancée Myosha Johnson, a home care worker, are among millions of families in the U.S. who work an average of 38 hours per week but still rely on public assistance. Wise is paid $8.50 an hour at his McDonald’s job and $9 an hour at Burger King. Johnson is paid just above $10 an hour, even after a decade in her field. Wise and Johnson together rely on $240 a month in food stamps to feed their three kids, a cost borne by taxpayers.

The problem of low wages and the accompanying public cost extends far beyond the fast-food industry. Forty-eight percent of home care workers rely on public assistance. In child care, it’s 46 percent. Among part-time college faculty—some of the most highly educated workers in the country—it’s 25 percent.

Ebony Hughes is paid $7.50 an hour as a home care worker in Durham, N.C., and has a second job at a local KFC. While the home care industry has the fastest growing number of jobs in America, these workers are some of the lowest paid in the country – earning, on average, $13,000 a year. To get enough hours to pay the bills, Hughes works from 6 a.m. to 11 p.m. But she and her daughter still rely on public assistance to make ends meet.

UC Berkeley’s Center for Labor Research and Education, which I chair, has analyzed state spending for Medicaid/Children’s Health Insurance Program and Temporary Assistance for Needy Families, and federal spending for those programs as well as food stamps and the Earned Income Tax Credit.

Keep Reading at the Washington Post: Americans are Spending…

Tagged , , , ,

Workers Demand Higher Wages and Walmart Punishes Active Workers


Strikers march outside a Wendy's restaurant in Boston

Strikers march outside a Wendy’s restaurant in Boston, for link to story click on image.


Across the country low-wage workers of all sectors went on strike demanding a raise to the minimum wage to $15/hour.  From Boston to Los Angelos and even globally, low-wage workers were making noise on tax day.

David Moberg an award-winning journalist for In These Times reports:

Fast Food Workers in 236 Cities Pull Off Largest Strikes Yet as Other Low-wage Workers Join Fight

(Milwaukee Teachers Education Association / Flickr)

A hand-lettered placard, reading “McDonald’s: Stop Fooling Around, $15 and a union,” caught the spirit of the crowd of at least 3,000 protestors in Chicago for a march to a McDonald’s restaurant in the downtown Loop area connected to the Chicago Board of Trade. In 236 cities in the U.S. and roughly 100 more around the world from Sao Paulo to New Zealand and from Glasgow to Tokyo, according to protest spokespeople, fast food and other low-wage workers joined together to pressure employers like McDonald’s to raise their workers’ pay.

Organizers claimed that it was the largest protest by low-wage workers in U.S. history. And it may very well rank as one of the broadest global worker protests ever undertaken against multinational corporations—one reinforced by recent investigations and lawsuits in Europe against the company for violations of labor, health, safety, tax and other laws.

With its intense public relations campaign, the campaign amplifies the actions of fast food workers—some of whom walk off their assigned shifts as in a traditional strike. For brand-sensitive consumer product companies, many organizers believe, such bad publicity can cost companies greatly—and potentially open up new organizing possibilities.

These protests have also changed the political climate, both locally and nationally. Seattle and Sea-Tac in Washington and San Francisco have raised their minimum to $15 an hour. The same change may be possible sometime soon in both Los Angeles and the District of Columbia. In Chicago, politically embattled Mayor Rahm Emanuel agreed under political pressure to raise the minimum to $13 over several years—far above what he would have contemplated a short while ago. The movement is likely to keep pressure over the coming year on Democratic candidates, even presidential aspirant Hillary Clinton, to advocate the higher pay levels.

For more click to In These Times: Fast Food Workers…

But there’s always a push-back when one pushes the powerful and nowhere is that more evident than right here in good ole America.  A writer for Daily KOS connects the dots with the mysterious “plumbing issues” closings of Wal-Marts across the country.  It seems that possibly, its not really plumbing that Wal-Mart intends to fix, but more likely, the “problem” of workers standing up for themselves:

Walmart Temporarily Closes 5 Stores Citing Plumbing Problems

In a highly unusual move Monday, Walmart closed 5 stores, citing plumbing problems requiring a 6 month closure being needed for repairs to be made. The closures were made suddenly with as little as 5 hours notice to many of the employees of the pending closures and layoffs. This is a highly unusual move by Walmart when you look at the work being done in the stores through renovations and upgrading to Walmart SuperCenters where contractors and employees were forced to work through the projects without store closures. This raises suspicion that the reason for the store closures may be something other than what Walmart is claiming publicly.

The stores closing are located in the southern tier of the US coast to coast. The stores are located in:

Pico Rivera, CA. 530 employees, were told they will continue to receive regular pay, and benefits for 60 days, along with possibly being transferred to another store.

Midland, TX. 400 employees, were told they would be able to transfer to other stores or, get the compensation packages. With 60 days pay due to the short notice of closing and are eligible will receive a severance pay of one week of pay per year of service. Upon reopening current employees who did not stay with Wal-Mart will have to reapply.

Livingston, Tx. 400 employees, employees will receive two months pay, with some being eligible for severance pay, and also a position at another store which isn’t guaranteed.

Tulsa, OK. 400 employees, employees will receive two months pay, with some being eligible for severance pay 1 week per year worked, and also a position at another store which isn’t guaranteed.

Brandon, FL. 400-500 employees, who will be able to receive two months pay, severance pay depending on length of service, and possibly a transfer to another store.

It should be noted that the 60 days pay is required by law in the event of a closure without notice and not the benevolence of America’s Richest Family. All of the affected stores have had at least 100 plumbing issues documented in the last year claimed by Walmart as the reason for closing. Despite that claim several news reports claim to have contacted local building officials asking if permits have been applied for or, plans have been submitted and none were noted as of yet. Building officials also stated that no building code violations were noted at the locations. In addition no contractors or repair services have been visible at any of the locations closing. Liberty Tax Service who had kiosks in many of the stores were also suddenly told to vacate the building along with the employees on April 13th, just 2 days before the April 15th, IRS Tax Filing Deadline.

But there’s more! Read on at Daily KOS: Wal Mart Temporarily Closes Stores

Tagged , , , , , , , ,

A Worker Looks In From the Outside of the ‘Labor Community’

With the latest focus on actions across the country by Wal-Mart workers, many middle class people who have the privilege of not having to work a low wage job announce their solidarity with the workers.  But their focus is narrow and their solidarity rings hollow.  Until a smaller more active union stepped up to support some of the workers who have had the courage to step up, Wal-Mart workers were and (still remain largely) the butt of classist jokes, derisive comments and dismissal by most Americans.

In fact most low-wage work has the stigma in this country of being work occupied by lower educated, slower witted persons who by their lack of the exceptional talent of their middle class betters, have failed to advance economically.  This classist attitude rings hollow in the face of the fact that as the American job pool shrinks, more and more people are forced into working low-wage jobs.  Jobs traditionally shut-off from the traditional unions.  Like a self-serving circle of hell, low-wage workers get stuck in a system where their poverty and desperation feeds an inability and fear to agitate for better wages and working conditions.  Short working hours and low hourly pay that leads to poverty existence squeezes the reserves of workers who lack the flexibility to move to other, better paying work.  Armchair libertarians and the like love to argue ad infitnitum that all workers have mobility to “take their labor else where”.  Such fantasies serve only to blame the worker, leaving better paid workers, the employer and government policies that enable working poverty off the hook.

Sorely missing from the popular perception and focus of the Wal-Mart workers’ action is the acknowledgement that similar workers struggle everyday, unnoticed and unrepresented.  The theme in American politics reflects the tacit willingness of Americans to be separated by class distinctions with signage and slogans that cry out the lame theme, “Protecting the Middle Class”, as if there exists a fear of associating with the ‘unwashed’ and the invisible class — including day laborers and those who languish on unemployment that washes them into the fast growing river of workers struggling to make ends meet with barely crumbs.

Does the American ruling class consist of middle class workers? Are not all workers struggling the same? It appears that instead of seeking to embrace all workers, the traditional labor unions have made the strategic decision to “grow” their dwindling movement only among those that fit their aged and concrete-clad vision.  All workers share the same basic struggles.  As traditional unions beg and work hard to gain support in their struggles to defend collective bargaining rights, where are these unions to defend the millions of workers who don’t work for the most hated retail chain in America?

And also, when will the American “middle class” realize that their never-ending thirst for cheap goods, cheap services and ‘lower prices’ comes at the price of people’s livelihood and standard of living?  Is it necessary to have a Wal-Mart in every town in America? Or a K-Mart? Or a Home Depot?  Has the spread of the corporate conglomerate retail market led to better wages and increased living conditions, or has it created a silent, suppressed, isolated and ever-growing sub-class? While there is much to applaud in the efforts of the Wal-Mart workers those smaller unions that have come out in support of them and other workers, the focus needs to widen to all workers.  The time has come for realization that, as the I.W.W. adage coined nearly a century ago, an injury to one is an injury to all— all workers must come together, ready to represent themselves at the table of labor in solidarity with all labor as One Big Union, united in the fight against the scourge of corporate global capitalism.

From artist Mike Flugennak: http://sinkers.org/stage/

Unfortunately the labor unions presently making up less 12% of the population naturally, have continued their isolation from many workers.  Workers in low wage jobs that larger unions have decided long ago not to organize have suffer from the  lack of union representation.  Exploitation of low wage workers has increased as the economic depression increases the labor pool and emboldens employers.  Some union organizers claim that the old ways of organizing do not work as jobs in lower wage fields tend to have a large turn-over, tend to offer little incentive for workers to remain and thus such a fluid membership base leads to instability and inability to organize long term.

This is disputable when one considers that the largest proportion of the workforce with the most direct exposure to the public is the low wage worker, whether in service jobs, healthcare or retail.  They provide the opportunity to larger trade unions to increase support for and understanding of the struggle to keep legal protected rights such as collective bargaining and (although diminishing and very limited today), the right to strike.  In exchange, formerly neglected workers should justly expect some support for their cause, where such has been historically lacking.

Diminished representation has weakened support for the union movement nationally.  As workers feel further and further distant from what many perceive as weak, disaffected or out of touch union representation, frustration within the ranks increases. Many members complain bitterly of lack of rank and file participation in meetings, apathy among members and even many members who enjoy the benefits of their union job while supporting exactly the opposite in political ideology and public policy, hypocritically assisting those who wish to undo the union and keep more workers out while benefiting from union members themselves. Ironically, union leadership and members do nothing to stop this inside sabotage while more and more workers linger on the outside looking in, unable to find a slot in increasingly unavailable union work.

Also membership reduces as well as the cost of carrying a card and paying dues while unemployed becomes prohibitive.  Unions have shrunk not only due to assaults on worker’s rights to organize and act for their betterment, but also due to attrition as a result of the dwindling union protection. Started by Ronald Reagan, the Republican and ‘New Democrats’ have unraveled protection for worker expression with only barely audible squeaks from union leadership. Sold down the river on the idea that some kind of gentleman’s agreement exists between labor and big business that they must continue to protect, big labor unions have chosen to bargain with the devil than to reach back and lend a hand to their brother and sister workers who could offer strength in their effort to finally resist big business’ assaults on labor.

The labor movement cannot survive in its current state. Dwindling membership rates and even more diminished actual power when one considers participation rates and support in current unions, has a ripple effect on all workers everywhere.  As John O’Reilly points out here, the larger unions smirk and snub workers they consider beneath them at their peril.  Only with all workers united together to fight the nihilistic and dehumanizing forces of corporate capitalism will workers succeed and together bring the living standards of all workers to enable peaceful, dignified existence.

John O’Reilly on how the labor movement talks about itself and how he interprets it as a member and organizer of the IWW.

I’ve been thinking recently about the way that the labor movement sees itself and talks about itself. Labor movement activists often talk about labor as a kind of community, a place where individuals can reach across differences and speak to each other based on a shared connection to their unions and unionism more generally. There are big, well-funded internal publications that the large unions produce which help move this discourse. But there are also independent voices which participate in this discourse. I can think of Labor Notes as an example that I’m most familiar with.

Labor Notes and magazines, blogs, or other publications like it have this particular way of speaking about the labor movement and the changes that it needs to implement that I’ve always had a lot of trouble connecting with. I like Labor Notes, I think its a useful piece that praises rank-and-file struggles and shows how the bosses and the business unions are strong and powerful but also have weaknesses. It’s the kind of publication that shows that working people can have independent publications that highlight our stories of success and explain why and when we fail with a good analysis (usually).

But I’ve always had trouble connecting with the language that LN and similar publications use to talk about the labor movement. There’s a positioning of “inside and against” that I’ve always been unable to connect with. The discourse often goes “we are the labor movement, we need to do better, we need to get better leadership and democratize our unions, we need to organize the unorganized.” I like all the reclaiming of the labor movement narrative, that’s a great step I think. Saying that “we,” being rank-and-file workers, are the labor movement and that unions are not just the union leaders, is really important. But to me as an IWW organizer, I’ve never felt part of some community of labor.

Read more: Outside the House of Labor, by Jack O’Reilly, IWW organizer, originally published in Labor Notes.

Tagged , , , , , , , , , ,