Scrooge city! Employers hotly defend poverty-level wages

By Caitlin Kelly

‘Tis the season!

Check out the 300 comments — and climbing (including a long one from me) — at the Harvard Business Review blog where a Wharton professor, Peter Capelli, (gasp, competing B-school!) posted the following argument in favor of actually paying workers a living wage:

Jobs paying $15 per hour are not the concern, though. Those are routinely seen as good jobs now. The concern is those jobs paying at or around the minimum wage, $7.25 per hour or only $1160 per month for a
full-time job. About 1.6 million workers in the U.S. are paid at that level, and a surprising 2 million are actually paid less than that under various exemptions. If you are an employer paying the minimum wage or close to it, the Government has determined that your employees need help to pay for food, housing, and healthcare even if they have no family and no one to look after but themselves.  As we’ve been reminded this season, many of those workers also need help from families and coworkers to get by.

No doubt the reason low-wage companies continue to pay low wages is because there are plenty of workers willing to take jobs at those wages, and the need to pay more to avoid the risk of being unionized is
largely gone. But “can” and “ought” are not the same thing.  Nothing about the minimum wage implies that it is morally ok as long as you pay at least that much. It simply says that the government will prosecute you if try to pay less than that level.

A longstanding principle in all developed countries including the U.S. is that labor is not like a commodity where taking advantage of the market to squeeze down prices is a fact of life. Employees have human rights that do not disappear when they enter the workplace. Even in business law, principles like the “mechanic’s lien” say that employees should be paid before other creditors because they are more vulnerable than businesses and do not get profits to compensate them for risks.

We’re at an inflection point in the U.S., where some low-wage workers, unprecedented in decades, have actually begun to stage walk-outs, strikes and protests in recent weeks.

In Germany — where 9,000 workers are employed by Amazon — employees have just gone on strike.

Wage list
Wage list (Photo credit: Wikipedia)

I have — as we say here in sports-metaphor-obsessed-America — skin in this particular game.

I worked 2.5 years making $11/hour (the federal minimum is still $7.25/hour) selling costly outdoor clothing at an upscale mall, the subject of my book, “Malled: My Unintentional Career in Retail.”

No matter how insanely productive we were — one of us sold $16,000 worth of merch one holiday Saturday — we never got more hours or  serious raise (mine was 30 cents/hour) or a boost into a low-management position with a (barely) liveable salary.

The endless argument in favor paying crap is that low-wage workers are all teens, seniors and/or have no skills.

False! A recent survey of 436 New York City retail workers found that two-thirds of them are supporting another family member on their wages. Their average age? 24.

I also pay my assistants $15/hour, albeit part-time, about 10 hours a month. This year I paid out $1,5000 in wages to one worker, a significant amount for a one-person shop — me — and a healthy sum to a person new to my line of work, in effect, someone essentially entry-level I was training and paying.

I am appalled, disgusted and fed up with corporate greed, corporate welfare and the right-wing outrage that all low-wage jobs are low-skilled. They’re not.

Every single job adds profit to an employer’s bottom line or — in union-free America — it’s swiftly cut, with no severance or warning.

Walmart and MacDonalds workers suck up my tax dollars in Medicaid and food stamps because their greedhead CEOs think this is moral, equitable and justifiable way to treat workers.

I disagree.

How about you?

The endless fight for a living wage: is $15/hour really too much?

By Caitlin Kelly

The federal U.S. minimum wage remains $7.25. Five states have no set legal minimum at all; six pay more than $8.00/hour.

(The minimum wage in Australia is already $15.00.)

In an era of almost $4/gallon gasoline and rising costs for food, health care and other necessities, the fight to win a living wage continues.

Official seal of SeaTac, Washington
Official seal of SeaTac, Washington (Photo credit: Wikipedia)

The city of SeaTac, in Washington State, is fighting this battle today.

From bbc.co.uk:

Supporters of Proposition 1 say $15 an hour is a “living wage”.

Detractors say that it would see businesses close and lay off some of
the 6,300 workers who would be impacted by the raise.

SeaTac covers just 10 sq miles (26 sq km) and has a population of just 30,000, with only 12,000 registered voters.

But what everyone agrees on is that tiny SeaTac has suddenly become a battleground for one of the biggest issues confronting the US economy – income inequality, or the widening gap between the rich andpoor, which has risen to its highest level since 1917.

“Coming out of the recession, we’ve seen job growth come out of the low-wage service sector,” says Prof Ken Jacobs, head of the University of California-Berkeley Labor Center.

The battle is pitched — desperate workers struggling to make ends meet against employers who insist they cannot possibly pay more.

Or that workers simply offer little to no skills, certainly none they value at that price.

The state of New Jersey — with 50,000 workers employed at minimum wage — will raise its lowest legal wage January 1 to $8.25/hour.

Like every argument, this one contains a blend of truth and perception, of assumption and received wisdom.

One of the issues is really thinking harder about what constitutes a “skill.”

Here are my thoughts, quoted recently in U.S. News and World Report, about what it’s like to work retail.

I worked a low-wage job from September 2007 to December 18, 2009 when the economy fell off a cliff and I desperately needed additional income. I sold costly outdoor clothing and accessories for The North Face, in an upscale suburban mall in New York, a 10-minute drive from my home. I earned $11/hour with no commission, few bonuses and a 30-cent raise in that time.

I typically sold $150+ worth of merchandise every hour; my best day ever, I sold more than $500 worth per hour.

And the company’s “reward” for selling $25,000 worth of its merchandise, virtually all of it sourced from low-wage factories in Peru, China and elsewhere? A gift card for the same merchandise worth $25.

You can exhort your workers and plaster mission statements to your walls, issue edicts, wave your hands…It’s tough for any worker to get excited — or “engaged” as the workplace gurus like to call it — when you’re toiling for pennies and earning significant profits for the person who relies on your labor.

Let alone a major multi-national corporation whose top executives now stagger home bent double with the bags of cash they’re netting — now typically 354 times the wage of their average worker.

When you can’t even pay your bills, no matter how hard you work, work loses much of its meaning.

And all of its dignity.

In January 2009, our store manager cut all our hours. I was only working one seven-hour shift, then cut to five hours, one of which paid for the cost of parking at the mall. We were told “the company can’t afford more.”

That month The Wall Street Journal reported that the parent company of The North Face was sitting on millions in cash — money it used in 2011 to purchase a competitor, Timberland for $2 billion.

The assumption being that no one working a low-wage job would notice this odd and striking definition of “can’t afford.”

I did, and wrote about this in my book about my time there, “Malled: My Unintentional Career in Retail”, which was published in China in July 2013.

malled cover HIGH

I do realize what happens when you pay workers poorly — they quit! I’ve been hiring part-time assistants for more than 15 years, when I paid a college undergrad $12/hour for her skills. Jess was amazing: smart, funny, a quick learner and a ferocious work ethic.

That was a lot of money then, and for some workers, it still is. I’d have simply felt embarrassed offering her less; I recently heard from an undergrad at a prestigious American university that a professor offered them $7.25/hour, which I find appalling and abusive.

When I pay $10/hour I can find smart and talented people  — but only for a few weeks, a month or so at most. They leave quickly, as they must, to make more elsewhere. At $15/hour I was able to keep the skills of someone else this year for more than eight months.

Hoping to replace her, (as she now seeks a full-time job), I recently interviewed someone who came highly recommended…and who wants $25/hour.

That’s my breaking point. So, for now, I am mostly assistant-less, and feeling that loss in my reduced productivity.

The pricing of our labor is a delicate dance. But tight-fisted employers who insist that low-wage workers have “no skills” are lying to themselves and to their weary workers.

They’re also short-changing their customers, who need, expect and deserve good service for their hard-earned dollars.

Here are some of the skills we used in our retail work:

— Maintaining a sense of humor (let alone having one to start with!)

— Listening carefully and for long periods of time to customers to discern their needs

— Speaking to customers in whatever style/tone/speed (even foreign language) best suited them

— Learning and memorizing a wide array of product knowledge: size/price/technical specs

— Lifting, carrying, stacking, folding and hanging goods

— Cleaning and tidying the entire store, top to bottom

— Ringing up purchases

— Watching the sales floor to deter shoplifting

No skill?

Snort.

Try calming a shrieking one-per-center threatening to “call corporate” if you fail to meet her demands.

Try helping a mentally disabled teen sort through all his jacket options to find something he loves that fits

Try explaining to a Saudi prince’s servant which down jacket will keep the princeling warm in his first New York winter.

walmart beijing
walmart beijing (Photo credit: galaygobi)

When Walmart employees suck up taxpayers’ money in food stamps ad Medicaid because their cannot earn a living wage...we’ve got a problem.

A 2004 study by UC Berkeley’s Institute for Industrial Relations found that, in California, the average Walmart employee required over $500 more in total public assistance than workers from comparable large retailers. Families of Walmart workers required 40% more health care assistance and 38% more in other kinds of public assistance (like food stamps, subsidized housing, and school lunches) than comparable families of large retail workers.

In addition, a 2006 report by the Philadelphia Inquirer found that Walmart had the highest percentage of employees enrolled in Medicaid in the state; one in every six of Walmart’s 48,000 Pennsylvania employees was enrolled. Finally, in January of 2012, the Ohio Department of Job and Family Services found that Walmart employees and families were the top recipients of Medicaid, food stamps, and cash assistance in the state.

The American worker is being subjected to a fierce game of chicken — who will blink first? Who will cave most quickly to imperial corporate demands, like these, made to the mayor of a small, economically-strapped town in Idaho:

Another economic rescue with Hoku’s glamour and promise is not on the horizon. Mr. Blad, in an interview in his office, said a big employer had recently expressed interest in coming here, bringing perhaps 1,000 jobs. But the company, which he declined to name — a warehouse distributor that does most of its sales over the Internet — has said it would offer $10 an hour, only a few dollars above the minimum wage.

The company even had the audacity to ask for financial incentives, which the city has politely declined. “We would welcome them, and we would value them,” Mr. Blad said. “But I can’t justify taxpayer dollars for a $10-an-hour job.”

What say you?

Are you working for (or paying) minimum or low wages?

If you’re earning so little, do you have an exit strategy?

Balance, Schmalance!

Day15/365 - Frazzled

In a time and place when millions are out of work and others working for minimum wage with no paid sick or vacation days, balance is a joke. Long commutes add an hour to two to three to the workday.

The Globe and Mail, Canada’s national newspaper, is devoting this week to an interesting discussion of how and where — if at all — workers find a balance between their private life and the demands of their paid work. Says a Montreal mother of two:

I’m not sure the balance is actually working.

Two weeks ago I was wishing I’d get a cold, just a 24 hour virus, so I could get some forced rest. I knew if I just took a sick day I’d end up organizing the storage room. I got my wish on Tuesday. Full fever. Be careful what you ask for.

I know what she means. I ended up, in March 2007, on an IV in the hospital with pneumonia and a temperature of 104. It was painful, exhausting and terrifying; the spot on my lung was so large they thought it might be cancer.

I had been endlessly rewriting a major magazine story when I was asked to go out and cover a speech by Anita Hill for The New York Times, for whom I’ve been freelancing for 20 years. I had been sick for a week or so, and by then could barely hold my head up I was so ill, but needed the money, didn’t want to let down a long-time client — and went.

It took me a full month to regain my strength, napping for two hours to get enough energy to stay awake for the next two. Luckily, I have no kids or pets relying on me and I work from home.

Those three days forever changed my view on work, income and stress. I remain ambitious and want to retire. I live in a very costly part of the world so a lowered income is a problem.

But when I watch the endless stream of chest-thumpers on Facebook — I did this and I did this and I did this! — I sit back and stare at the sky.

I now, by choice, limit my work schedule and stay away from clients who will make me crazy with their insatiable demands, no matter what they pay. As a result, I make less money than I could, maybe than I should, certainly far less than my skills and experience would suggest.

But without my health, I have nothing.

How do you try to tame the demons of too little time and too many tasks?

Where and how do you make time for yourself to be quiet, calm down and re-charge?

Colorado Cuts Its Minimum Wage. Do Employers Really Need Four More Cents Per Hour?

WASHINGTON - JULY 24:  U.S. Sen. Edward Kenned...
Image by Getty Images via Daylife

Colorado will become the first state to reduce its minimum wage because of a falling cost of living. It’s likely to take effect in January 2010.

The state Department of Labor and Employment ordered the wage down to $7.24 from $7.28. That’s lower than the federal minimum wage of $7.25, so most minimum wage workers would lose only 3 cents an hour.

Colorado is one of 10 states where the minimum wage is tied to inflation. The indexing is thought to protect low-wage workers from having flat wages as the cost of living goes up.

But because Colorado’s provision allows wage declines, the minimum wage will drop because of a falling consumer price index. It will be the first decrease in any state since the federal minimum wage law was passed in 1938.

It reminds me of the 1954 Broadway musical, “Pajama Game”, that became a 1957 film, about a labor dispute in a pajama factory:

Seven and a half cents doesn’t buy a hell of a lot,
Seven and a half cents doesn’t mean a thing!
But give it to me every hour,
Forty hours every week,
And that’s enough for me to be living like a king!

Taking pennies out of the pockets of the lowest-paid workers on the wage scale just seems petty and nasty to me.

Or am I missing something here?

Low-Wage Workers Stiffed, Women Worst, National Study Finds

Joe $20 dollar bill - back
Image by sbwoodside via Flickr

That’s why they call them sweatshops — 43 percent of apparel and textile manufacturing workers surveyed in New York, Los Angeles and Chicago said they’d been cheated of the minimum wage they were expecting. The survey, released this week by the Center for Urban Economic Development, the National Employment Law Project and the UCLA Institute for Research on Labor and Employment, was funded by four foundations, Ford, Russell Sage, (which gave $327,924) Joyce and Haynes.

Women, no surprise, were far more likely to suffer minimum wage violations than men, with the worst affected — not surprisingly — illegal immigrants, who made up 39 percent of those surveyed, (31 percent were legal immigrants and 30 percent native-born Americans.) The typical worker had lost $51 the previous week through wage violations, out of an average weekly wage of $339 — about a 15 percent loss in pay. African-Americans were three times more likely than whites to suffer a wage violation.

“We were all surprised by the high prevalence rate,” said professor Ruth Milkman, one of the study’s authors. Why? Maybe because she hasn’t ever, or likely for a long time, worked at the very bottom of the labor ladder. Anyone who’s worked a low-wage job knows you take it because you’re desperate and out of choices. When you’re desperate you’ll put up with whatever your employer wants just to keep that paycheck coming, whatever they chip out of it.

In 1999 and 2000, author Barbara Ehrenreich worked as a waitress in Key West, Fla., as a cleaning woman and a nursing home aide in Portland, Maine, and in a Wal-Mart in Minneapolis, Minn. She wrote about it,in “Nickeled and Dimed” offering a rare look inside a world most of us try to flee as soon as possible and pray we never see again.

Best of the bunch surveyed were residential construction — dinging workers only 13 percent — and home health care, at 12 percent. Tied for second-worst employers, with personal and repair services? Private households, aka nannies, maids and other domestic workers. Ripping off workers is sick, but cheating someone you’ve chosen to bring into your home or care for your kids? Nice example to set.

Among many others, The New York Times ran a story about the study and an editorial calling for tougher laws and penalties.

Has this ever happened to you?