During yesterday’s Republican Primary Debate, Donald Trump and other candidates stated that they would not raise the minimum wage. Trump took this level of thinking even lower, proclaiming “Our wages are too high.” He thinks the only way for America to be competitive is for “people to work really hard” to “enter that upper stratum.”
This kind of language is out of touch. Bill Clinton and Newt Gingrich teamed up to “end welfare as we know it.” Most poor Americans work, but they don’t make enough money to get ahead. It’s easy for a billionaire who was born into a wealthy family to tell others to work hard. It’s also dishonest. Our economy does not produce enough jobs that pay enough for people to enter the middle class, much less Trump’s “upper stratum.” Complex problems need thoughtful solutions, not cliches.
Huffington Post’s labor writer Dave Jamieson has written a compelling story on the death of a temporary worker at an Amazon distribution center in Virginia. In his long, detailed, fascinating article, Jamieson never simply blames Amazon or a subcontractor company for the employee’s death. Instead, he tells the story of a human being who went to work one day and did not come home. He takes us into a world of temporary workers and how they labor with little security and no benefits. I don’t want to try to summarize this article. Instead, I urge you to read it and consider the story of Jeff Lockhart, Jr., who died at age 29, leaving behind a wife and three children. Jamieson gave his work the subtitle, “What the Future of Low Wage Work Really Looks Like.” In those words, he challenges us (and Jeff Bezos): Even if this system is legal and makes good business sense – is it right?
Laura Clawson of Daily Kos reports that the National Labor Relations Board is holding large fast food companies responsible as “joint employers” with franchise owners. This news is major. Employees will have more power to unionize and bring claims against global corporations who have denied responsibility for working conditions. Hopefully this is one more step toward giving more rights to hard working people who are paid too little.
Daily Kos features an article by Hunter on presidential candidate Rand Paul’s explanation for income inequality. The senator from Kentucky told Chris Wallace of Fox News: “The thing is, income inequality is due to some people working harder and selling more things.” Hunter asks an important question: How much is Senator Paul’s own success a matter of his hard work and how much of it is based on the great base of support built by his father’s decades of hard work? The same question could be asked about the Walton heirs.
From a different angle, how much harder do CEOs work than the average U.S. worker? According to the SEC (as cited in yesterday’s Chicago Tribune), some of Chicago’s CEOs must be working incredibly hard:
- James McNerney of Boeing earns $28.9 million annually, 611 times the average worker’s annual income.
- Peter Liguori of Tribune Media has annual compensation of $23 million, 487 times what the average worker makes.
The rest of the top ten Chicago CEO earn between $21 million and $15.6 million, which is also 466-331 what the average American worker earns.
My problem is not simply income inequality. When Senator Paul and other conservatives talk about hard work and “takers,” they disrespect the work done by millions of Americans. They project a divided society where the lucky few deserve wealth and security and most Americans live pay check to pay check in constant fear of losing a job and have little hope for the future. I don’t think the problem of income equality is simple to explain or solve. Dismissing it as a matter of hard work is insulting to all Americans.
Huffington Post reports that New York is making a big stride toward a state-wide minimum wage of $15 per hour for fast food workers. A panel set up by Governor Andrew Cuomo, a politician often criticized for not being liberal or progressive. It’s not clear if this measure would only apply to the fast food industry or if it would cover all industries. In any case, this is another example of politicians admitting that the current minimum wage is too low. America needs a raise, and hopefully leaders in New York will set a good example.
The job numbers from last month are exciting. The unemployment rate is down to 5.5%, which is good in itself. However, there is even better news. Bloomberg reports that leading retailers are struggling to keep their lowest paid employees. It will take a while for employers to move the needle up on salary, but this is a good start. Bloomberg depicts the current situation as a conflict of interests between investors and employees. I disagree. As lower paid workers make more money, they will spend, which means everybody wins. The article also demonstrates how much it costs a company to replace employees. The raises leading retail companies have given to their employees can be seen as a way to save costs related to turnover. The news is good. Let’s be happy for a little while.
The winners in the salary game also have the most retirement security. Writing for Bloomberg, Carol Hymowitz and Margaret Collins compare the situation of Target’s retiring CEO, Gregg Steinhafel, who will receive $47 million in retirement benefits with the average target employee who has $45,000 in a 401 K plan. Workers who have such plans save about $100,000 over their careers, which means an annual return of $4,000 if the rate is as high as 4%. Hymowitz and Collins tell more stories of CEOs and their retirement security, which you may find amazing or disgusting.
What scares me most about this story is what it doesn’t say about young people in their twenties and thirties who either work low wage jobs or have to pay off education loans. How will they even be able to put $100,000 in a 401 ? Something needs to change soon, or many American workers will face a dark future. Retired CEOs, on the other hand, will be among the few who can live the American Dream.
Ellyn Fortino of Progress Illinois reports on how many people would be impacted by a raise in the federal minimum wage. An increase to $10.10 an hour would raise the wages of 25 million people in the U.S. While many critics claim that most of the people receiving minimum wage are teens who live at home, the majority of low wage workers are their family’s main source of income. Fortino also cites a 2014 study by Goldman Sachs that debunks the claim that raising the minimum wage is a job killer. Hopefully 2015 will be the year when the federal and state both see an increase in the minimum wage.
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.
I like Jimmy Johns’ sandwiches, but I will never eat them after what I learned today. Why? They treat their employees badly. Raw Story reports (based on a story from Huffington Post) that every employee who works for the company signs a non-compete agreement that would prevent them from working for an sandwich maker for two years. I’ve written about non-compete agreements before. Once upon a time they were a tool used to keep key performers from jumping to competitors. Those employees usually received some kind of compensation that would let them wait out the term of the agreement. Now companies like Jimmy Johns are using non-compete agreements to make it difficult for employees to leave their job. That’s wrong. I will never at Jimmy Johns again
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