Making Ends Meet on Minimum Wages


Is it any wonder that hundreds of fast food workers across the country this week are walking out and striking at their jobs demanding to form a union and to have their wages increased to as much as $15 an hour? From California to New York their chant can be heard: “We can’t survive on $7.25.”

A full-time job, 52 weeks a year, with not a single work day off, at the federal minimum wage of $7.25, can earn about $15,000 annually, but still be 19% below the poverty line income threshold for a family of three. For that same full-time minimum-wage worker, there is not a single state in the nation where you can afford a two-bedroom apartment at market rate rent. And, anyone classified as a “tipped wage” employee, such as a waitress or domestic worker, has not had their minimum hourly rate of $2.13 increased in two decades.

It’s time for low-wage workers to reap some benefit from the slow, but steady economic recovery.

In Baltimore, city officials have not moved on the debate to raise the minimum wage. However, Amanda Rothschild, co-owner of Charmington’s coffee house, told the AFRO , “I want my employees concentrating on our customers, not worrying how they will afford to pay rent or put food on their own table.”

Rothschild said she’s never regretted the decision to pay her 30-person staff $8 an hour to start with benefits including paid vacation and sick leave, shift meals, and health care. Not only has the pay scale helped her business to succeed, she said it has caught on with other restaurants in the community. “We have low turnover, which saves us money, and our employees care about their work, which shows in the quality of service they provide and the quality of the food they turn out.

If my small restaurant can pay higher entry wages, certainly the big chains can too," she said.

According to data and studies compiled by the Center for Economic and Policy Research, “No matter how you look at it the minimum wage is just too low.” In a report released earlier this month they compared the current minimum wage against various benchmarks, such as inflation and workers' average productivity, age and education. “For example, if it had kept up with inflation at its peak in 1968, the federal minimum wage would now be $10.75 an hour. And if the minimum wage had grown along with workers' productivity, it would be as high as $17.19 today.”

Congress has not raised the federal minimum wage of $7.25 since 2007 although President Barack Obama has asked the lawmakers to raise it to $9. There has been no movement to pass the legislation. By the way, members of Congress earn $174,000 a year.

Some states and cities have taken the matter in their own hands; Maryland and Virginia follow federal guideline of $7.25 while the District’s is $8.75. A number of groups are calling for $11 an hour; the Business for Minimum Wage organization is campaigning for $10.10 in increments over the next three years.

Under the recently passed D.C. Council “living wage” bill, which applied only to big retailers like Wal-Mart, the minimum wage would be raised to $12.50 an hour at those businesses. Wal-Mart has threatened not to develop six proposed stores in the city even though they had started construction on three of them. They have asked the mayor to veto the bill.

Many worried about jobs that would be lost at the Skyland site in Southeast. Some, like Rev. Grayland Hagler have been pushing back against what he called Wal-Mart’s scare tactics. He told the AFRO “Are we supposed to simply roll over when some economic bully comes along and tells us how to run our affairs when we are called on to take care of our people?” He doesn’t fear Wal-Mart leaving when the District is experiencing such growth in new residents with higher incomes.

Holly Sklar, president of Business for Minimum Wage, told the AFRO that the opposing arguments that increased wages results in job loss or lost business is not supported by recent data she noted on her organization’s website. It is also not true, she said, that states with higher minimum wages are less competitive; California being an example.

“The biggest problem for Main Street businesses is lack of customer demand,” Sklar said, noting that minimum wage workers have less buying power today than minimum wage workers in 1956. Meanwhile, corporate profits are at their highest since 1950, as a percentage of national income, while the share going to employees is near its low point. “We can’t build a strong economy on a falling wage floor.”

Hagler pointed to Costco, which opened its first D.C. store at the Dakota Crossings shopping center in the Northeast Ft. Lincoln community, as a model big box retailer willing to pay employees fair wages of $11.50 an hour starting out.

Sklar also referred the AFRO to a statement from Costco.

Craig Jelinke, Costco’s President and CEO said they have been able to keep overhead cost low while paying above minimum wages and benefits. “An important reason for the success of Costco’s business model is the attraction and retention of great employees,” he said. “Instead of minimizing wages, we know it’s a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty.”

An according to this week’s strike organizers with Fast Food Forward, $11.9 million is the average salary of a chief executive in the food industry that takes in an estimated $200 billion annually, compared to $11,000 annually for the people handling your food at places like Wendy’s, KFC, Burger King and McDonald’s.

All these corporations, through industry spokesmen, counter that they treat their workers well. McDonald’s teamed up with VISA to present a working budget for their employees. Problem is that the McFake worksheet required employees to work two jobs earning approximately $2,000 a month and pay for unrealistically low living expenses such as $600 for rent, $20 for health care, a $150 car payment, $100 for savings, and still have $27 a day left over discretionary (fun) money.

The McFake budget only insulted and incensed workers with good reason.

Veteran journalist Adrienne Washington writes weekly for the AFRO about relevant issues in the District, Maryland and Northern Virginia. Send correspondence to her at editor@afro.com.

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Making Ends Meet on Minimum Wages

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