Daily Kos reports that Ivar’s Fish Bar, a seafood restaurant chain in Seattle, will stop taking TIPs from customers and raise its employees’ minimum wage to $15 per hour. Of course, they will have to raise prices, which many critics of an increased minimum wage claim will kill small businesses. Not really. The price increase will be 4%, which is much less than most customers would leave as a tip. Rather than paint this as a situation where one or more parties lose, it’s a win-win for all concerned. Employee get a raise. Customers pay less. Finally, the business earns good will with its customers and employees. Ivar’s Fish Bar shows that American businesses can pay a living wage.
Walmart announced that it will raise its minimum hourly wage to $9 and increase that wage to $10 next year. It’s great that the company has made this move on its own. However, will this raise really change the lives of its workers? A person making $9 an hour will still be earning about $20,000 a year – if she is working full time. If the worker is a parent, she will certainly still need public aid for food and housing. In essence, working people and the middle class will continue to be underwriting Walmart’s work force. We need to establish a living wage and commit ourselves as citizens to paying a little extra so we can all live decent lives.
Walmart employees in 21 states have or will receive increases in pay because of changes in minimum wage laws. That sounds like good news. However according to a Reuters story reprinted in Huffington Post, other low wage workers will be moved into a single base rate. It appears that some will win while others will lose. We often focus on the minimum wage without considering those workers who make a few dollars more per hour, but still struggle to get by. We need to have a living wage as the base of a just society.
The website 24/7 Wall Street reports that the Los Angeles City Council is debating a raise in the minimum wage that would bring the wage to $13.25 in 2017 and $15.25 by 2019. Critics says this measure would cost jobs. The problem with that claim is that the wage will be phased in over 5 years. If a business cannot adapt in that time period, that company is not viable. The report also said that companies in L.A. might move to nearby communities with lower minimum wages. There’s a simple solution to that problem: raise the national minimum wage. America needs a raise.
Mayor Bill DeBlasio has signed an order that increases the minimum wage of some workers from 11.90 to 13.13. This order applies to companies that work with the city, not all workers in the city. Laura Clawson of Daily Kos sees the move as a way to put pressure on state government to increase the minimum wage throughout the state. She quotes Governor Cuomo who said that a state-based increase leads to “a chaotic situation.” Mayor DeBlasio is leading. Hopefully the governor will follow.
I’ve written about Detroit and its challenges before. I love the city and wish it the best. The business website 24/7 Wall Street reports that a poll of CFOs taken by Robert Half forecasts big job growth in the Motor City. The author cautions that the poll does not have national statistical validity, but it does indicate optimism in Detroit, Philadelphia, and several other large cities. My take away, as always, is that job growth in itself is not enough. We need good jobs that pay a living wage. Let’s hope good jobs and brighter days are coming to Detroit.
Aljazeera America reports that McDonald’s issued an SEC report claiming that its sales may suffer because of “campaigns by labor organizations and activists” to raise the minimum wage. This is the message the corporation sent to shareholders via the SEC report. Aljazeera quotes an industry spokesperson who says that a raise to the minimum wage would have little to no impact on McDonald’s stock price. It would have a big impact on workers’ lives. $15 per hour would have a bigger impact. We need a living wage, not a minimum wage.
Aljazeera America reports that McDonald’s has taken down a controversial website that offered “helpful” advice to low wage employees. In the recent past, the website has come under fire for advising employees to earn money selling things on E-Bay and how to tip a pool cleaner. The final straw hit close to home for the hamburger giant when the website, which is operated by a third party, told employees to stop eating fast food because it was unhealthy. Something tells me that the company responsible for that bit of wisdom no longer works for McDonald’s.
Rather than try to tell low wage workers how to live on less, companies like McDonald’s should be leaders in paying a living way. Would food cost more at the restaurant? It would. Would investors earn less on McDonald’s? Probably. Might franchise owners and corporate leaders need to take a pay cut? They would. Those are the costs. What about the benefits? Low wage workers would be pumping more into the economy. McDonald’s would be able to recruit better talent. Rather than give employees bad advice about how to live on less, it’s time to pay a living wage.
Huffington Post reports that Snarf’s, a chain sub shop, has fired all of its employees at a Chicago restaurant three days before Christmas. It informed its former staffers in the most personal way – email. 20 employees lost their jobs because the store will be “reconcepted” as a burger joint. The chain’s Director of Marketing told Huffpo that the employees should not have been surprised because “they were aware of the loss of business over the last year.” How would she have felt if she were laid off three days before Christmas?
This story is another example that shows how employees are just numbers to large corporations and chains. What would it have cost a national chain like Snarf’s to wait until the end of the week? It might have cost them the chance to turn the knife. Employees at this store participated in a fast food workers’ strike that took place earlier this month. Retaliation? No, they say, it’s all just business. Hopefully Snarf’s customers will treat the chain the same way it treat its workers. A company that can be this cold at this time doesn’t deserve to exist.
P.S. (12-26-2013) The CEO of Snarf’s, Jim Seidel, has issued an apology for how the layoff was handled. To his credit, Seidel called the action, “insensitive and poorly planned.” He also wrote that employees would be provided an extra week of wages. This admission shows that pressure and negative PR matter. We who support a living wage need to remember this lesson.
Normally on Sundays I write about issues outside of the world of careers and work. But today I read a letter in the Chicago Sun-Times that made my blood boil. John Babush of Big Rock, Illinois defended the disparity in pay between CEOs and front line workers, citing the example that McDonald’s CEO makes in an hour what it takes a minimum wage worker three and a half months to make.
Babush’s first point is stunning – stunningly absurd: “How many hours do you think he or she [a minimum wage worker] would last in that job [CEO]?” No one who supports a living wage suggests that front line workers should be paid what their mangers are making much less what a CEO of a Fortune 50 company should be compensated. The question is one of degree. In the 1970s, CEOs in the U.S. earned 30-50:1 to the average employee salary. Now that ratio is often 250-300:1. Mr. Babush says we are asking the wrong question. He needs to go back to school for a little training in logic.
Worse still, Babush writes: “Anybody working a minimum wage job, should they want more income, ought to do whatever necessary to increase their value to their employer. If that doesn’t work, do whatever is necessary to makes oneself a potentially valuable asset to another employer. Keep it up and one day that minimum-wage worker might end up a CEO.” Is it possible to follow this map to success? Sure – for the very lucky few. Most successful people in the U.S. today had parents who were also successful. Fewer and fewer children born into poverty have options to rise from the class into which they were born.
“Do whatever is necessary”? Nice advice. It fits well in the myth of American Exceptionalism which conservatives like to push as a rationalization for the wealth distribution they claim to hate. Since the 1980s, middle class and working class people have seen their earnings fall, especially for those without a college degree. In the same period, the most wealth Americans have seen their incomes go up and up. Babush’s model of working hard sounds great, but is it possible in an economy where most of the new jobs pay $15 or less? Is it possible in a culture where greed drives the richest Americans to find new ways to avoid paying taxes that fund what we share in common as a society? Is it possible in a country where politicians of both parties, following neoliberal economic policies, ignore the needs of the middle class, working class, and the poor.
John Babush’s ideas have the strength of simplicity: Work hard and you will succeed. Push that balloon just a little bit, and it bursts. At first, I didn’t know why the Sun-Times published this letters, but the more I think about it, I’m glad it did. This letter gives us a chance to think about so many hard working people – now two generations since Ronald Reagan was president – have worked so hard and “done whatever it takes” to go nowhere or just tread water. We need to take a hard look at the American Dream. Is there still “equal opportunity”?
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