Nel's New Day

September 2, 2013

Labor Day, A Rollercoaster

Today signifies the end of summer, return of kids to school, and the demise of the U.S. worker. Known as a federal day called Labor Day, it used to commemorate the contributions of workers to the strength, prosperity, and well-being of their country.

A year ago, GOP leaders co-opted this day to celebrate management and CEOs when House Majority Leader Eric Cantor (R-VA) tweeted, “Today, we celebrate those who have taken a risk, worked hard, built a business and earned their own success.” Rep. Paul Ryan (R-WI) and then-Vice Presidential candidate echoed the sentiment when he said that only small business owners are working hard to make “this country grow.”

The arrogance of the wealthy and the GOP created this myth. According to a new study, the ultra-wealthy have a greater sense of entitlement than the others, and the GOP pays attention only to this narcissistic population. Participants from a high social class are more likely to say “I honestly feel I’m just more deserving than others” whereas other are more likely to respond, “I do not necessarily deserve special treatment.” An earlier study shows that “upper-class individuals behave more unethically than lower-class individuals,” including being more likely to “display unethical decision-making,” steal, lie during a negotiation and cheat in order to win a contest. “

Upper-class individuals also “showed reduced sensitivity to others’ suffering” as compared to working- and middle-class people. Lower-class individuals are more likely to spend time taking care of others and are more embedded in social networks that depend on mutual aid. Another study shows that U.S. senators respond almost exclusively to the interests of their wealthiest constituents, those more likely to be unethical and less sensitive to the suffering of others. MIT economist Daron Acemoglu said that this pattern historically comes from widening economic disparities. As economic inequality increases, the more powerful use that power to become even more powerful, working to change rules in their favor.

In a backlash to this inequality last week, fast food workers protested their unreasonably low wages, demanding $15 per hour, equal to the request at the first March on Washington 50 years ago. With no healthcare insurance and costs rising, people cannot live on minimum wage without government assistance. Companies who pay below-subsistence wages are dragging the economy down and taking their wealth from the taxpayers. The company doesn’t pay for food stamps and the Medicaid that their workers need; the taxpayers do.

Corporations know that a faltering economy helps them hire cheap workers. High unemployment rates gives them a large pool of disposable workers. The companies’ profits soar, and they keep a bit of their profits to stop politicians from raising the minimum wage or lowering unemployment.

The thousands of fast-food workers who protested in 60 cities from coast to coast want not only the $15 per hour but also paid sick leave and the right to unionize the restaurant industry, the nation’s second-biggest employer which is predicting its 2013 profits will “reach a record high of $660.5 billion.” The federal minimum wage of $7.25 an hour was last raised in July 2009. A sub-category for tipped workers, which includes waiters, waitresses, bartenders, and busboys, was last raised by Congress in 1991 and is $2.13 an hour. Raising the price of a Big Mac at McDonalds would pay for half the money needed to raise the minimum wage for workers to $10.10. Even increasing the federal minimum to $9.80 over three years would give increase workers wages by 33 percent and more than double the wages of tipped workers.

Last June the wealthy NRA (National Restaurant Association) blocked 27 out of 29 states from increasing minimum wages and prevented a dozen states from passing laws to require paid sick leave. Even in two states raising minimum wage, New York and Connecticut, the NRA blocked or delayed raising the tip wage. They also kept local governments in six states from requiring paid sick leave. The NRA spent almost $1 million) to defeat a mandatory sick leave measure in Denver in 2011.

Workers in Washington, D.C. are waiting to see if its mayor Vincent Gray will sign a bill to require big box stores, in this case Wal-Mart, to pay at least $12 an hour, including benefits. He may veto the bill after Wal-Mart threatened to close stores and not expand in poorer neighborhoods. Washington passed local sick leave legislation in 2008, but the NRA made sure that it didn’t apply to tipped workers.

Both New York City and Portland (OR) passed a sick leave law last spring. New Jersey will vote on a $1 mimimum wage increase this fall, and organizers in Massachusetts plan a petition drive for the 2014 ballot to raise their state minimum wage and to require paid sick leave.

Most of the workers who would benefit from $15 per hour have families to support; the media age for fast food workers is 28. Women account for two-thirds of the industry; their average age is 32. At Wal-Mart, the median age is 30, and workers bring in half the family’s income.

Most low-wage workers are employed by companies with profits higher than before the recession, particularly in the fast food industry that can handsomely reward CEOs. McDonalds’ Don Thompson got $13.8 million last year. Brands (Taco Bell, KFC, and Pizza Hut) gave $11.3 million to CEO David Novak. After Wal-Mart had sluggish growth and only 5 percent increase in sales, CEO Michael Duke got a raise–$20.7 million up from $18.1 million in 2011. The average daily salary of a fast food CEO is about $25,000, about 40 percent higher than the annual salary of each worker.

Businesses have said that they should have the option of whether to pay a minimum wage, and the Boston-based burrito chain Bolaco actually pays its employees more than the minimum wage. Entry-level workers receive between $9 and $11 an hour, most of them $10, and many of them advance into higher roles paying $17 or more. Regarding low wages at companies like McDonalds and Burger King, Boloco CEO John Pepper said, “It’s a lot easier to keep wages down than it is to find better practices, bolder practices, more efficient practices, which come through training.”

The In-N-Out burger chain starts employees at $10.50 an hour, and workers at Dicks Drive-In in Seattle start at $10. Moo Cluck Moo, a burger chain in Detroit, pays its workers $12 an hour.

The people protesting the minimum wage have jobs, but the unemployment rate is still 7.4 percent as of July. Rep. Steve King (R-IA), probably on his way to being presidential candidate through Charleston (SC) a week ago, accused the unemployed of not trying to get work and compared them to children who won’t do their chores at home.

The truth is that there are three people looking for each job opening in the United States. The recession made long-term unemployment more common than any other downturn in many decades, and being unemployed for nine months has the same impact on the odds of getting hired as losing four full years of experience from a résumé.

This Labor Day does have good news.

  • A majority of people in the U.S. has favorable views of unions. A June poll showed that 51 percent are positive about unions, up ten percent from two years ago and the first time since January 2007 that a majority has felt this way.
  • Union membership in California increased by 110,000 members in 2012 although it fell 368,000 nationwide. Several other states with growing Latino populations also have growing union membership.
  • Some workers are standing up for decent wages and working conditions. Wal-Mart workers and warehouse workers went out on strike, port truckers in L.A. and Long Beach voted to unionize along with carwash workers in L.A. and New York and taxi drivers in New York, and Hawaii enacted a domestic worker “Bill of Rights” possibly followed by California. And fast food workers are striking.
  • For the first time since President Obama was elected, the National Labor Relations Board (NLRB) has a full complement of five members. Despite court restraints, the board remains an important source for workers whose rights have been violated by their employers.
  • The AFL-CIO and its affiliates are holding an “open convention” next week, showing its inclusion of domestic workers, carwash workers, Wal-Mart workers, fast food workers and others. They have also formed alliances with the NAACP, National Council of La Raza, Sierra Club, religious organizations, and other groups that support basic justice for American workers. And they have played a key role in lobbying for federal legislation that benefits all workers–healthcare reform, equal pay legislation, immigration reform, an increase in the minimum wage and paid sick leave.

Despite the decades of stagnating wages and disappearing health and pension benefits, the return of the unions might give hope for future Labor Days—and the economy.


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