Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
01 December 12
hat
does the drama in Washington over the "fiscal cliff" have to do with
strikes and work stoppages among America's lowest-paid workers at
Walmart, McDonald's, Burger King, and Domino's Pizza?
Everything.
Jobs are slowly returning to America, but most of them
pay lousy wages and low if non-existent 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.
It's also part of the reason why the percent of
Americans living below the poverty line has been increasing even as the
economy has started to recover - from 12.3 percent in 2006 to 15 percent
in 2011. More than 46 million Americans now live below the poverty
line.
Many of them have jobs. The problem is these jobs just don't pay enough to lift their families out of poverty.
So, encouraged by the economic recovery and perhaps also by the election returns, low-wage workers have started to organize.
Yesterday in New York hundreds of workers at dozens of
fast-food chain stores went on strike, demanding a raise to $15-an-hour
from their current pay of $8 to $10 an hour (the median hourly wage for
food service and prep workers in New York is $8.90 an hour).
Last week, Walmart workers staged demonstrations and
walkouts at thousands of Walmart stores, also demanding better pay. The
average Walmart employee earns $8.81 an hour. A third of Walmart's
employees work less than 28 hours per week and don't qualify for
benefits.
These workers are not teenagers. Most have to support
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.
Organizing makes economic sense.
Unlike industrial jobs, these can't be outsourced
abroad. Nor are they likely to be replaced by automated machinery and
computers. The service these workers provide is personal and direct:
Someone has to be on hand to help customers and dole out the burgers.
And any wage gains they receive aren't likely to be
passed on to consumers in higher prices because big-box retailers and
fast-food chains have to compete intensely for consumers. They have no
choice but to keep their prices low.
That means wage gains are likely to come out of
profits - which, in turn, would affect the return to shareholders and
the total compensation of top executives.
That wouldn't be such a bad thing.
According to a recent report
by the National Employment Law Project, most low-wage workers are
employed by large corporations that have been enjoying healthy profits.
Three-quarters of these employers (the fifty biggest employers of
low-wage workers) are raking in higher revenues now than they did before
the recession.
McDonald's - bellwether for the fast-food industry -
posted strong results during the recession by attracting cash-strapped
customers, and its sales have continued to rise.
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.
Last week, Walmart announced
that the next Wal-Mart dividend will be issued December 27 instead of
January 2, after the Bush tax cut for dividends expires - thereby saving
the Walmart family as much as $180 million. (According to the online
weekly "Too Much," this $180 million would be enough to give 72,000 Wal-Mart workers now making $8 an hour a 20 percent annual pay hike. That hike would still leave those workers making under the poverty line for a family of three.)
America is becoming more unequal by the day. So
wouldn't it be sensible to encourage unionization at fast-food and
big-box retailers?
Yes, but here's the problem.
The unemployment rate among people with just a high
school degree - which describes most (but not all) fast-food and big-box
retail workers - is still in the stratosphere. The Bureau of Labor
Statistics puts it at 12.2 percent, and that's conservative estimate. It
was 7.7 percent at the start of 2008.
High unemployment makes it much harder to organize a
union because workers are even more fearful than usual of losing their
jobs. Eight dollars an hour is better than no dollars an hour. And
employers at big-box and fast-food chains have not been reluctant to
give the boot to employees associated with attempts to organize for
higher wages.
Meanwhile, only half of the people who lose their jobs
qualify for unemployment insurance these days. Retail workers in
big-boxes and fast-food chains rarely qualify because they haven't been
on the job long enough or are there only part-time. This makes the risk
of job loss even greater.
Which brings us back to what's happening in Washington.
Washington's obsession with deficit reduction makes it
all the more likely these workers will face continuing high
unemployment - even higher if the nation succumbs to deficit hysteria.
That's because cutting government spending reduces overall demand, which
hits low-wage workers hardest. They and their families are the biggest
casualties of austerity economics.
And if the spending cuts Washington is contemplating
fall on low-wage workers whose families are under the poverty line -
reducing not only the availability of unemployment insurance but also
food stamps, housing assistance, infant and child nutrition, child
health care, and Medicaid - it will be even worse. (It's worth
recalling, in this regard, that 62 percent of the cuts in the Republican
budget engineered by Paul Ryan fell on America's poor.)
By contrast, low levels of unemployment invite wage
gains and make it easier to organize unions. The last time America's
low-wage workers got a real raise (apart from the last hike in the
minimum wage) was the late 1990s when unemployment dropped to 4 percent
nationally - compelling employers to raise wages in order to recruit and
retain them, and prompting a round of labor organizing.
That's one reason why job growth must be the nation's number one priority. Not deficit reduction.
Yet neither side in the current "fiscal cliff"
negotiations is talking about America's low-wage workers. They're
invisible in official Washington.
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.
Robert B. Reich, Chancellor's Professor of Public
Policy at the University of California at Berkeley, was Secretary of
Labor in the Clinton administration. Time Magazine named him one of the
ten most effective cabinet secretaries of the last century. He has
written thirteen books, including the best sellers "Aftershock" and "The
Work of Nations." His latest is an e-book, "Beyond Outrage." He is also a founding editor of the American Prospect magazine and chairman of Common Cause.
6 comments:
University of California at Berkeley, I rest my case.
anonymous2 When I was young and unhappy with my paycheck, I went out and found another job...
anonymous 2
The above is a classic example of bigotry by a right winger. UC-Berkeley is one of the finest institutions of higher learning in the world. But because of the protests of 60 years ago it is branded as somehow liberal and therefore dishonest. Amazing leap of non-logic.
They couldn't get the black guy out of office, so the bigots are going after "them pointy-headed intelleckshuals."
They......? That' a BIIIG paintbrush. Interesting how easy it is for you to paint all of the THEY types as bigots. Isn't there a word for that?
Its actually easy. Fast Food employment has always been a starter position. A place to get work experience, experience in a job, following instruction, learning self reliance and gaining self respect. If McD'S and othe fast food is your career, then you have already given up, unless you are a franchisee. I have seen some cases of career employees, but they are at the management level.
And UCB, yes -- liberal extremists.
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