On November 23, Black Friday, workers in thousands of Walmart stores went on strike for higher wages and better benefits. On November 29, in New York City, hundreds of workers at fast food chains like McDonald’s, Domino’s, KFC, Wendy’s and Burger King went on strike demanding the ability to form unions and be paid at least $15 an hour. Currently, the median wage for a food service worker is $8.90.
Most workers at Walmart and fast food chains make so little they quality for food stamps. Huffington Post, reporting on the New York strike, quoted one worker, who after eight years at KFC, makes only $7.75 an hour. Former Labor Secretary Robert Reich reminds us that while jobs are slowly coming back to America, most are low paying providing little or no benefits:
The Bureau of Labor Statistics estimates that seven out of 10 growth occupations over the next decade will be low-wage—like serving customers at big-box retailers and fast-food chains. That’s why the median wage keeps dropping, especially for the 80 percent of the workforce that’s paid by the hour.
Reich notes that these jobs are not being filled by teenagers, but by adults who have to support themselves and their families.
According to the Bureau of Labor Statistics, the median age of fast-food workers is over 28; and women, who comprise two-thirds of the industry, are over 32. The median age of big-box retail workers is over 30.
Reich makes two more important points: a) organizing makes economic sense for big-box and fast-food workers because their jobs can’t be outsourced, and b) wage gains can and should come out of the pockets of shareholders and top executives who can well afford it. The National Employment Law Project reports that corporations like McDonald’s are doing even better during the recession than before, and executive compensation is through the roof:
Its CEO, Jim Skinner, got $8.8 million last year. In addition to annual bonuses, McDonald’s also gives its executives a long-term bonus once every three years; Skinner received an $8.3 million long-term bonus in 2009 and is due for another this year. The value of Skinner’s other perks — including personal use of the company aircraft, physical exams and security — rose 19% to $752,000.
Yum!Brands, which operates and licenses Taco Bell, KFC, and Pizza Hut, has also done wonderfully well. Its CEO, David Novak, received $29.67 million in total compensation last year, placing him number 23 on Forbes’ list of highest paid chief executives.
Walmart—the trendsetter for big-box retailers—is also doing well. And it pays its executives handsomely. The total compensation for Walmart’s CEO, Michael Duke, was $18.7 million last year—putting him number 82 on Forbes’ list.
The wealth of the Walton family—which still owns the lion’s share of Walmart stock—now exceeds the wealth of the bottom 40 percent of American families combined, according to an analysis by the Economic Policy Institute.
When it comes to organizing, Reich admits low-wage workers face big hurdles. The majority have only a high school degree, and unemployment among that group is very high—over 12 percent, so workers are even more fearful than usual of being fired for organizing. In addition, only half who are currently working qualify for unemployment because they are part-time or haven’t held the job that long.
“Deficit reduction” will hit low-wage workers the hardest
Reich and economists Paul Krugmann, and Joseph Stiglitz agree that deficit reduction is the last thing Washington needs to be doing right now. Why? Because cutting government spending reduces overall demand, further depresses the economy and guarantees that unemployment will remain high, especially among low-wage workers.
Austerity doesn’t stimulate the economy. Europe is a textbook example of how it worsens a recession. Austerity is a cash cow for the wealthy — a not so transparent way to cut benefits for ordinary people so they have less obligation to pay for them. Our elected minions of the corporate world know that, but they are hell bent on serving those with power and influence who want to further enrich them selves.
If the spending cuts Republicans and some Democrats want fall on low-wage workers—i.e. reducing unemployment insurance, food stamps, housing assistance, infant and child nutrition, child health care, and Medicaid—they will suffer even more.
Reich says the obvious: America’s low-wage workers are invisible in official Washington because they are unorganized.
Not only are they unorganized for the purpose of getting a larger share of the profits at Walmart, McDonalds, and other giant firms, they’re also unorganized for the purpose of being heard in our nation’s capital. There’s no national association of low-wage workers. They don’t contribute much to political campaigns. They have no Super-PAC. They don’t have Washington lobbyists.
But if this nation is to reverse the scourge of widening inequality, Washington needs to start paying attention to them. And the rest of us should do everything we can to pressure Washington and big-box retailers and fast-food chains to raise their pay.
The minimum wage needs to be a living wage. According to the National Employment Law Project, the number of the working poor now exceeds 47 million, driven in part by the steep erosion in wages throughout the economy:
Over the last forty years, the real value of the federal minimum wage has fallen by close to 30%. Even after the 2007-2009 federal increases, the minimum wage remains far too low to sustain working families.
If a national minimum wage was set at $12 to $15 an hour, the economy would bounce back with a roar, there would be increased demand for goods and services, and even those at the top would benefit from the ensuing robust economy.
I’m not holding my breath for the Walton’s to have a conversion experience. But the recent strikes tell me that low-wage workers and sympathetic consumers are beginning to understand that gross income inequality threatens the future of the United States. Stay tuned . . .