A friend sent me an article from HR Magazine, which is produced by the Society for Human Resource Management (SHRM). The author, Jennifer Schramm, cites studies that consider the impact of pay inequality on worker moral. Where job security was recently the leading driver of job satisfaction, it is now compensation. Schramm notes that CEO-worker compensation has shifted from 20-1 in 1965 to 265-1 in 2013. What are companies doing to address this problem? 42% are offering “financial literacy training” and 25% are offering budget training.
These measures would be great if workers who are often living from paycheck to paycheck had anything to save or budget. America needs a raise. It’s not just an issue of low wage workers. Middle class and even some executives have been receiving small/no raises for the last decade. The drum beats for changing are getting louder.
Sarah Jaffe of In These Times reports on an effort in Minnesota to fine companies that pay wages so low that employees have to be on state aid. Take Action Minnesota is promoting what it call the “bad business fee,” a fine for each employee who is working while on some form of federal or state support. Jaffe cites a study that claims Walmart employees receive $6.2 billion per year in some form of assistance. That’s $6 billion the American taxpayer is paying to subsidize the nation’s largest private employer – corporate welfare. Jaffe gives several other compelling examples, and I urge you to read her article.
As progressive radio host Thom Hartmann is fond of saying, a business that can’t pay its employees a living wage shouldn’t be in business. People who work for a living shouldn’t have to rely on services that are meant for the poor or unemployed. If we want to promote the work ethic and the dignity of work, we should be as will to say that all workers deserve a living wage. America needs a raise.
Nick Hanauer makes no bones about being wealthy. He also understands that consumers need money to buy the things that make people like him rich. He’s written a great open letter to his fellow “zillionaires.” It’s long, so I’ll just link and let you take it from a billionaire with great common sense.
Writing in Daily Kos, Laura Clawson reports on Equal Pay Day, the date on which the average woman’s pay catches up to the average man’s pay from 2013. As some like to point out, many women work in lower paying jobs. However, many women performing the same jobs as men are paid less. As Clawson asks, why are women stuck in these jobs? This discrimination is one more example of why and how our economy has stalled. Job numbers are important. Wages and wage disparity is a much more significant problem, especially in an economy that depends on consumer spending.
Check out this short (150 second) video in which former Labor Secretary explains inequality. It could be argued that his explanation is not inclusive, but it helps us see where too much of our money is going. The video shows how job loss is connected to corporate schemes to make more money for investors. It is worth your time.
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”?
I was listening to Thom Hartmann’s talk show a couple of days ago and heard some frightening news. Since 2008, 800,000 Americans have fallen out of the middle class. Hartmann added to this woeful statistic recent discoveries about McDonald’s and Walmart. McDonald’s gives its workers advice on how to limit their diets and how to access social services. Similarly, Walmart was called out for holding a food drive for its low wage employees. In both cases, taxes of the middle class are a type of corporate welfare because they keep employees of Walmart and McDonald’s sheltered, fed, and medically secure. Hartmann looks at these trends and sees one outcome: the death of the middle class.
David Cay Johnston, reporting for Aljazeera America, documents that the median wage in the U.S. is at its lowest rate since 1998. The median wage for 2012 was $27, 519. In 1998, that rate was $26, 984. Workers’ wages are going in the wrong direction. Or, as Aljazeera America puts it: “Half of America is being left behind.”
How could this problem be fixed? Raise the minimum wage. Defend the rights of workers to organize. Repeal NAFTA and pass no more international trade schemes that pull jobs out of the U.S. Tax companies that pull jobs out of the U.S. (currently those companies get a tax benefit). These are just a few ways that the federal government could help stressed American workers earn a little more money. Given what we seen out of Washington, don’t hold you breath waiting for solutions.
A Michigan fast food restaurant called Moo Cluck Moo is raising its employees starting salary from $12 per hour to $15. How is this possible when most of its competitors pay at or close to the minimum wage? Moo Cluck Moo has chosen a different path. Brian Parker, one of the restaurant’s owners, said, “It just feels like the human thing to do.” A business can do human things. And sometimes, it’s even good business. When Henry Ford gave his workers a decent raise, they were able to buy his cars. A good economy does not trickle down. It’s not a gift from fictional “job creators.” When working people and the middle class have money and security, they will spend. We need more companies with owners like Moo Cluck Moo.
This story began with a brave action when the Washington D.C. City Council refused to give in to Walmart’s pressure over a living wage ordinance. The Council passed a bill requiring that companies like the nation’s largest retailer pay a minimum wage of $12.50 per hour. The less-than-brave, lame duck (and just plain lame) mayor vetoed the bill.
Now, as Laura Clawson reports in Daily Kos, another turn has taken place. Councilman and mayoral candidate Tommy Wells has proposed a city-wide minimum wage of $10.25. At first glance, this sounds good. The wage is higher than that advocated by President Obama, and it is a quarter more than the minimum wage law passed recently in California.
What’s wrong with this proposal? Walmart saves $2.25 per hour. Wells was part of the minority that opposed the original ordinance. Now he offers a compromise that will protect companies like Walmart (large retailers). Washington voters need to ask: “Mr. Wells, which side are you on?”
P.S. Abby Zimet in Common Dream explains how Walmart’s owners, the Walton family, uses loopholes to keep more and more money. Couldn’t just a little trickle down?
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