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Cities Can’t Ignore Big Chains’ Poverty Wages

Neal Peirce / Sep 13 2013

For Release Sunday, September 15, 2013
© 2013 Washington Post Writers Group

Neal PeirceAmerica’s cities, its towns and counties and communities, “gotta care.” Significant numbers of citizens are obliged to live with low wages and sometimes miserable working conditions, which critics blame on, among others, Wal-Mart,, Macy’s, KFC, McDonald’s, Wendy’s and Burger King.

It’s small wonder that low-income workers, with a special hand from the Service Workers International Union, have been staging short strikes and rallies across the country to dramatize the situation.

But there’s a key issue. Should city governments be supporting their effort? The issue has won enhanced political attention from Bill de Blasio’s surge in the New York City mayor’s race. He’s argued that “chains like McDonald’s and Burger King are part of a $200 billion industry,” and that today’s $7.25-an-hour minimum wage is unacceptable. “I will not stand for it,” he insists.

Behind the politics, there’s a solid case for fairer income distribution in our cities and regions. Concentrations of low-wage workers mean a community has reduced spending power. That translates into reduced ability for small businesses to thrive, fewer tax receipts, and overall, a less vibrant economy.

But it’s worse than that. Just to survive, many low-wage workers must string together two or three different jobs. And that easily dashes their hopes for job training and economic upgrading, notes Manuel Pastor, director of the Program for Environmental and Regional Equity at the University of Southern California. One needs a decently paying regular job just to have the time for community college at night or to otherwise better one’s skills.

And, Pastor notes, consider the psychological impact on children – “a sense of helplessness that can envelop an up-and-coming generation if they don’t see their parents making progress.”

Low-wage penury also undermines civic life. Workers living on the edge, juggling multiple jobs, have less time for enjoying parks, for physical exercise everyone needs, for following their children’s progress in school, for engagement with their communities.

And there are big economic implications. “If you’re concerned about city economies, you have to be concerned about wage inequality,” notes Lee Fisher, president of the nonprofit group CEOs for Cities. “For the economy to grow, consumers need to be spending. And spending won’t pick up without wage growth.”

CEOs for Cities’ research, Fisher reports, reveals an “Opportunity Dividend” premised on the notion that a decrease of poverty in America by 1 percent would save $31 billion in such government services as Medicaid and food stamps. Each person living in poverty, the analysis shows, equals about $19,000 more in antipoverty expenditures in a metro area.

In Fisher’s view, the “single most important issue for every city’s economic health is its ability to move people out of poverty, into the middle class.”

He underscores the companion issue of civic engagement: “If people feel respected and treated with dignity, including how they’re paid, they’re more likely to be invested in the future of their city civically.”

Small wonder, then, that de Blasio has generated major interest with his promise to increase taxes on New Yorkers earning $500,000-and-over, with the proceeds funding early childhood and school programs.

There are examples of fair wage advance by negotiation. In Cleveland, Mayor Frank Jackson worked closely with major employers, especially university hospitals, to win agreement that all the permanent jobs in a big hospital construction expansion would include paying workers a living wage.

Often, though, determined labor organizing is the only route. The Los Angeles Alliance for a New Economy successfully lobbied the city’s council in 2008 to require a living wage – about $12 an hour – for employees of hotels surrounding the Los Angeles International Airport. And it keeps pressing to extend the benefits to LAX’s baggage handlers, airline cabin cleaners and other service employees.

Last year the effort was successfully extended to Long Beach, where voters approved a measure requiring hotels with 100 rooms or more to pay its maids, bellmen, maids, janitors and other employees at least $13 an hour – far above California’s official $8 minimum wage. In a city that had invested heavily in subsidies to draw hotels in the first instance, the move marked a belated but significant balancing of interests.

Indeed, the push for fair and living wages is long overdue, and a welcome counterweight to the continued practice of state and local governments to expend vast sums (recently estimated at close to $80 billion a year) to lure or retain footloose corporations.

Some of those very subsidies go to national chain employers who claim that paying living wages will force them to close facilities, shrink the workforce and lose market share.

Perhaps it’s time, finally, to decide that America’s communities, and their people – especially those struggling on the economic edge – should come first and not last.

Neal Peirce’s e-mail is

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  1. Neal Peirce
    Posted September 13, 2013 at 7:01 pm | Permalink

    Last-minutes news from California — The California Legislature is passing, and the governor about to sign, legislation raising the state’s minimum wage from $8 and $10 an hour. “The minimum wage has not kept pace with rising costs,” Brown said in a statement. “This legislation is overdue and will help families that are struggling in this harsh economy.”

  2. Ken Wood
    Posted September 13, 2013 at 7:05 pm | Permalink

    In Texas, servers in restaurants are generally paid $2.13 an hour. In places like Sirloin Stockade, Golden Corral and Ryan’s tips are not as good as they are where the server actually takes an order and serves you. Try living on $17 for an 8-hour day.

  3. Mike Koetting
    Posted September 14, 2013 at 5:31 pm | Permalink

    Just think about the arithmetic of trying, for instance, to support yourself and raise a kid on even $10/hour job. Food, rent, transportation. It just doesn’t work, let alone money for things like decent early childhood education that might help the kid break the cycle.
    A. Unless we commit in realistic ways to breaking the cycle of low wage jobs, the national will have a permanent underclass.
    B. Many don’t care. They have convinced themselves the issue does not impact them.
    C Change is not going to happen easily. We are talking about real re-distribution of wealth. Wealth is not necessarily fixed, so some of this could be addressed by “growing the pie”. But a fairer allocation can only happen with very deliberate–and much smarter than current–policies. Some would call this “class warfare.” But intentionally or otherwise, the rich are curently conducting warfare against the poor. And the rich are winning. We need to be honest with ourselves about this issue.
    C. Unless this issue is solved, none of the other policy issues we face can be solved. Talking about them as if they existed in a vacuum is another way of kidding ourselves.

  4. Mary DeWolf
    Posted September 15, 2013 at 1:47 pm | Permalink

    I remember when John L. Lewis of the CIO and Walter Reuther of the AFofL were working toward
    an eight-hour, 5-day work week @
    40 cents an hour in the 1930’s.
    When my father retired in 1955 he felt well paid for his nine-hour, 6-day work week @ 65 cents an hour ( better than when he farmed 7 days a week with every other Sunday afternoon as well as time for church off.
    When I was 12, the rent for a cottage on the lake was $35. a week, and the property taxes were $200. a year. Now the same cottage is $1,800. a week, and the property taxes (Not to mention other upkeep) are almost $7,000. a year.
    For my first car gas was 17 cents a gallon. It is now $3.62.
    When wages rise, prices follow up. Inflation has developed steadily, and I can afford the same as I could sixty years ago.
    The poor are not as poor as they used to be.
    We brought our lunch to school; some went without
    unless a kind soul brought a pan of biscuits at noon, which was rare. My great-uncle was on relief (welfare) with tea and biscuits his main diet. I COULD TELL YOU DETAILS OF MY “POOR” TENANTS, WHO GOT
    Since you are arguing for a middle class, You must agree that there will be an underclass.
    The American freedoms allow every individual to raise himself by his own efforts both materially and spiritually. That is the idea of progress, the basis of our past.

    With technology such as robots replacing the hundreds of workers once so necessary and well paid, should socialism be our future? Maybe. Certainly we do not want inflation like Germany’s, which paved Hitler’s way.