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Poverty Wages in Land of Plenty

Written by David Gee

Poverty Wages in Land of Plenty
“We work hard for practically nothing for companies that are making millions,” said the custodial worker who spends his nights sweeping the floors of big retailers for minimum wage, and who was part of a group of several hundred protesters who crossed my path, almost literally, in front of some St. Paul, Minnesota, strip centers and malls at midday on Black Friday. I asked him what he is asking for. “Not much. Just a living wage. Enough so that after working a 50-hour week I can afford to pay some bills. Enough so that even after that 50-hour work week I don’t have to go to food banks to feed me and my family. I think we deserve better. If they paid us right, it would be better for us, and the whole economy.”

I hadn’t intended to do an interview while out shopping and mall hopping with my family. But I figured at some point I might do a story on this subject. And it became a pretty big story when thousands of minimum wage workers protested low pay and asked for action on income equality across the U.S. on Thursday.

President Obama renewed his call for the minimum wage to be increased, and has already said he will back a Senate measure to increase the minimum statutory pay to $10.10.

The protesters have a backer in the White House. In an economic policy speech the day before the demonstrations, President Barack Obama mentioned fast-food and retail workers “who work their tails off and are still living at or barely above poverty” in his call for raising the federal minimum wage.

The federal minimum wage currently stands at $7.25 an hour, or about $15,000 a year. Obama renewed his call for it to be increased, and has already said he will back a Senate measure to increase the minimum statutory pay to $10.10.

Senate Majority Leader Harry Reid, D-Nev., has promised a vote on the wage hike by the end of the year. But Republicans in the House oppose the measure, which they say would be harmful to business.

Minnesota Congressman Keith Ellison claims American taxpayers are subsidizing the business model of fast food giants such as McDonalds

Minnesota Democratic Congressman Keith Ellison co-chairs the Congressional Progressive Caucus, and claims American taxpayers are subsidizing the business model of fast food giants such as McDonalds. Rep. Ellison says the minimum wage is kept down by lobbyists who spend industry money to buy favorable legislation. He points out that the minimum wage, in real dollars, is lower now than it was in 1968.

The average hourly salary for fast-food workers was $9.00 in May 2012, according to the Bureau of Labor Statistics. The average age for these workers is 29 years old; for women, it’s 32, according to the bureau.

In October, McDonald’s released their 3rd quarter earnings report revealing a 1.5 billion profit, a 6% uptick from this time last year. According to a report released recently by the National Employment Law Project, that profit number is strikingly close to the $1.2 billion taxpayers are shelling out each year to help pay public assistance to the McDonald’s workforce.

On Thursday, the day of the protests, the company posted this statement on their website:

McDonald’s and our owner-operators are committed to providing our employees with opportunities to succeed. We offer employees advancement opportunities, competitive pay and benefits. And we invest in training and professional development that helps them learn practical and transferable business skills.

We also respect the right to voice an opinion. To right-size the headlines, however, the events taking place are not strikes. Outside groups are traveling to McDonald’s and other outlets to stage rallies. Our restaurants remain open today – and every day – thanks to our dedicated employees serving our customers.

Many of the protests are reportedly being organized by a Big Labor-backed organization known for targeting non-union restaurants – and for paying protesters.

Not strikes? “Outside groups?” What is the company referring to? Well, it seems many of the protests are being organized by New York’s Restaurant Opportunities Center, a Big Labor-backed organization known for its protests of nonunion restaurants. In some instances, these protesters may actually be getting paid.

Mike Paranzino, communications director for ROC Exposed, which is supported by a coalition of restaurant workers, employers and citizens concerned about ROC’s campaigns against America’s restaurants, penned this piece in the New York Post calling the protestors “rent-a-mobs.”

“We’re all supposed to pretend these are ‘organic’ worker ‘uprisings’ against exploitative employers; in fact, they’re all bankrolled by Big Labor and its allies,” writes Paranzino.

The anti-ROC sentiment is seconded by the National Restaurant Association; the leading business association for the restaurant industry. They also contend these latest fast food demonstrations are a coordinated PR campaign engineered by national labor groups. And that the vast majority of participants are activists and paid demonstrators, not restaurant workers.

The organization says they shouldn’t be targeted anyway, because the restaurant industry is one of the few industries that continued to create jobs during the recent recession and economic recovery.

“Dramatic increases in a starting wage such as those called for in these rallies will increase prices for restaurant meals and lead to fewer jobs created.”

“Dramatic increases in a starting wage such as those called for in these rallies will challenge that job growth history, increase prices for restaurant meals, especially in the value segments, and lead to fewer jobs created,” claims Scott DeFife, Executive Vice President, Policy & Government Affairs, National Restaurant Association. “Business owners already face great uncertainty due to a lack of a clear economic plan from Washington and the health care law’s implementation. Calls to double the minimum wage only intensify the challenges faced by job creators.”

Okay, are you keeping track of all these agendas floating around?

I have tried to make this post as balanced and well-researched as possible, but this issue certainly has the potential to be a divisive one.

I’ll let the Editorial Board of the New York Post have the last word for now. They support the notion that raising the minimum wage will actually hurt low income earners more than it will help. And that the overwhelming majority of those making minimum wage are not raising families on it.

“Even if they were, the $15,000 a year would not be their sole income. Between the earned-income tax credit, food stamps, Medicaid and so forth, their real income could be nearly double that. Though Big Labor prefers hikes in the minimum wage because some of its own contracts are pegged to them, increasing the earned-income tax credit is a much better vehicle for helping working families. The reason is that it underwrites the worker rather than making him or her more expensive to hire.”

{ 11 comments… read them below or add one }
  1. Gregg Dourgarian

    I have a college kid on winter break looking for a retail job, any retail job. She’s not getting calls. I don’t see how making her more expensive to hire is going to fix that.

    Like or Dislike: Thumb up 4 Thumb down 2

  2. Lisa L.

    @Gregg, your daughter missed the hiring period for seasonal retail positions. Retailers are fully staffed with trained employees before the mad holiday rush that Black Friday kicks off. If your daughter is interested in finding a seasonal retail position next year, she should start applying in September.

    Well-loved. Like or Dislike: Thumb up 6 Thumb down 0

  3. D.Wind

    This is just another ploy by this administration to undermine business in hopes of creating more Union Organized Labor across companies. Government becomes the savior in an environment they worked in destroying. Check history, this regime is following the footsteps of Stalin, Hitler, Chavez, Castro, to name a few. It’s how a democracy became Socialistic, and took over the people. The elites stayed in power and gained wealth—-follow the potential for power and wealth and you will see thru this White House agenda. This President needs to be impeached, with some of his fellow democrats. Wake up America, before its too late.

    Hot debate. What do you think? Thumb up 6 Thumb down 7

  4. Jim Gilleland

    So, here’s the elephant in the room…immigration.

    We have an oversupply of low skill workers. When you have an oversupply the employer can mandate the price. If we were to remove all the illegals the supply would drop and the wages would increase. It’s very simply supply and demand economics.

    Instead the socialists and unions believe everybody should be paid an overly generous rate, because it’s the right thing to do. We need to manage our labor supply and not be held hostage to the policies of the liberals and greedy wants of the corporations.

    Somehow out of a population of 313 million we have only a labor force of 159 million. Imagine the wages if we controlled immigration better?

    Like or Dislike: Thumb up 2 Thumb down 2

  5. Early H

    Either the writer of the article …POVERTY WAGES IN A LAND OF PLENTY confused or …I… Am confused…..the article seems to say that workers should be paid according to how much money their…. EMPLOYER earns ……I always thought employee pay was based on the value the worker provided to his employer relative to what the employer could obtain from the current pool of employees available to that employer. I always thought that the… EMPLOYEE .. had the right to work somewhere else if he could provide those same benefits to.. A DIFFERENT ….employer for more money…….………WOW… thanks for enlightening me .

    Like or Dislike: Thumb up 2 Thumb down 1

    • Amy S.

      This is AWESOME! I get so sick and tired of hearing about a “living wage”! Why are they working there in the first place? This is a free country (for now, anyway)! If you don’t like your job, your boss, your pay rate, your work hours, your co-worker, the dress code, etc, etc, etc, you are FREE to find a new job! When will logic ever sink in to some of these people’s brains?!?!?!

      Like or Dislike: Thumb up 1 Thumb down 1

  6. regeya

    Ellipsis……are NOT…decoration….nor…are THEY….for….extra….EMPHASIS…WOW……………………………………………………………………………….

    Like or Dislike: Thumb up 2 Thumb down 1

  7. BDty

    Top issues that are/have undermined american hegemony (for D Wind).
    - Lobby System based on $$ rather than constituency
    - Free Trade Agreements
    - No Intellectual protectionism
    - Dismantled Glass Steagall
    - Bloated Military Spending/Actions
    - Entitlement programs (for both rich and poor – with top 1% receiving most)
    - Deficit spending funded by foreign entities
    - US Dollar as primary international currency – over-valuation

    If you look at source of these issues there seems to be plenty of responsibility, and blame, across both parties. The minimum wage discussion doesn’t even register….

    Not sure how you logically fit your argument together but….

    And government subsidies do suppress wage inflation, and/or prices, at tax payer expense – as do all subsidies.

    Like or Dislike: Thumb up 1 Thumb down 1

  8. David Gee Post author

    “The article seems to say that workers should be paid according to how much money their …. EMPLOYER earns?” Wow. I think I am late to that party Early. Just where exactly in the article does it say that?

    I began the piece with a…QUOTE…from a worker who wishes that were true.

    I also included a quote from a member of Congress who for sure believes that, and then I cited a couple of articles that would seem to show that at least one fast food chain likely could…at least AFFORD…to raise the minimum wage.

    None of those things in my mind say we should or they should or that I believe workers should be paid according to the profits of their employer, although that does happen to some degree naturally.

    I took great care to avoid advocating for anything – or anyone – on this issue. And I even gave the last word to a group of people (the editorial board of a big NYC newspaper) who said we should…NOT…raise the minimum wage.

    Thanks for the comment Early. And thanks Gregg for defending me!

    Like or Dislike: Thumb up 2 Thumb down 2


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