DALLAS- Is it time for multi-million dollar corporations and governments to stop paying its workers “chicken-feed” wages? The United States Conference of Mayors thinks so.
The group made it clear in a formal resolution that it is time for action in the U.S. Congress to raise the federal minimum wage and allow state and local governments to set their minimums above federal standards to help its lowest paid workers keep pace with the rising cost of living.
One of the leaders in that charge to help low wage workers is Dallas Mayor Mike Rawlings. Rawlings, a former Pizza Hut CEO, supported the resolution and now wants the Dallas City Council members to take a look at the issue.
CALL TO END PAY INEQUALITY
“I believe the biggest problem we face in Dallas and across the country is income disparity, or what I refer to as the gap between the haves and the have-nots,” Rawlings said in a response to African-American News&Issues. “With more than 260,000 Dallas residents experiencing poverty, it is important for me as a leader to advocate for a higher minimum wage to ensure that more of our citizens can earn a living wage. The health of our economy, neighborhoods and businesses depends on it.”
The mayor’s statements come after Dallas County is considering a similar increase — and as cities and states across the country are raising the minimum wage, saying their workers should be earning more.
The U.S. Conference of Mayors is the official nonpartisan organization of cities with populations of 30,000 or more. There are nearly 1,400 such cities in the country today, and each city is represented in the Conference by its chief elected official, the mayor.
Rawlings and other mayors are concerned with the growing inequality gap that has left middle and working class families with less income to consume, leading to a decrease in demand and shackling the nation’s economic growth.
Many of those working jobs and receiving minimum or lower wages are African-Americans, Hispanics and/or women.
Houston Mayor Annise Parker said: “Even in cities with robust economies like Houston, too many are locked outside looking in on opportunity. We are pleased that the Conference of Mayors is focused on this issue to ensure that all residents of every city can have equal opportunities to thrive. This is our call to action.”
Congress passed the current federal minimum wage of $7.25 an hour in 2009. Efforts since then to increase it have failed. According to data from the conference, the wage would be at least $10.50 an hour adjusting for inflation since 1968 and a minimum of $18.50 if it were in line with worker productivity. The real value of the federal minimum wage has fallen nearly 30 percent in the last 40 years.
The annual salary of a full-time minimum wage worker is just $15,080 a year, which is $4,000 17 below the poverty line for a family of three, according to David Weil, head of the U.S. Department of Labor’s Wage and Hour division.
America has more than 47 million people classified as the working poor, partly due to wage erosion, according to the National Employment Law Project – many of whom are African-American and Hispanic. Of those, women make up nearly two-thirds of all workers being paid minimum wage or less.
The current national goal of restoring the minimum wage to $10.10, while more substantial than recent minimum wage increases, still does not remotely approach the wage that low-wage workers actually need to provide for themselves and contribute to their families’ needs.
“It’s healthier for our economy, neighborhoods and businesses to have a living wage,” Rawlings said. “The economy has been stagnant because the lower end doesn’t have disposable income to spend.”
CURRENT PAY NEITHER FAIR NOT EQUITABLE
Another concern is that many of these low paying jobs are in service and fast food industries where corporations make millions, while paying mostly minority workers “mere” crumbs that fall from the proverbial table.
Low wage jobs throughout the fast food industry cost taxpayers a total of $7 billion per year.
The National Employment Law Project which advocates for the fair and equitable treatment of workers, noted the disparities between workers pay and survival challenges compared to corporate gains in a recent report and how that impacts the American taxpaying public.
According to the report, taxpayer costs are driven by the business model of low wages, no benefits, and
limited hours at the 10 largest fast food companies, forcing employees to rely on public assistance in
order to afford food, healthcare, and other basic necessities.
An estimated 2.2 million restaurant workers are employed at the 10 largest fast food companies, which includes McDonald’s, Yum! Brands (owner of Pizza Hut, Taco Bell, and KFC), Subway, Burger King, Wendy’s, Dunkin’ Donuts, Dairy Queen, Little Caesars, Sonic, and Domino’s.
The report coincides with the release of a companion study by the University of California Berkeley,
which examines the public cost of low wages, no benefits, and limited hours across the fast food
industry as a whole. According to that study, 52 percent of front line fast food workers are paid so little that they must rely on some form of public assistance to support their families.
“Every time taxpayers have to pick up the tab for basic necessities that workers don’t get via their jobs,and can’t afford on their low wages, we’re making a direct deposit to corporate profits,” said Christine L. Owens, executive director of the National Employment Law Project.“In the case of fast food, that means multi-national corporations like McDonald’s amass profits not only by paying low wages, but from all of us too –whether we buy their products or not. It’s a sweet deal for McDonald’s and other fast food giants, but the rest of us get burnt.”
The report stated that despite paying low wages to millions of workers, the largest fast food companies in the U.S. remain in strong financial condition.
Just last year, the seven publicly traded firms among the 10 largest fast food companies netted a total of $7.44 billion in profits, paid $52.7 million in CEO compensation, and distributed $7.7 billion in dividends and buybacks.
Realizing the kind of money being made, fast-food workers and others being paid minimum wage in service related industries have rallied as are calling for new increase in wages up to $15 per hour.
Rawlings and his mayoral colleagues understand that the math between corporations and workers not only is unfair, but just does add up to progress for hard working Americans.
Also, more than 600 economists, including seven Nobel laureates have signed letters in support of increasing the minimum wage and have said that the increase in the wage would little to no negative effect on the employment of minimum wage workers, even during times of weakness in the labor market.Another government study mayors shared indicates that the federal government would save $46 billion over 10 years in spending on the Supplemental Nutrition Assistance Program (SNAP), also know as Food Stamps, if wages increased to $10.10 an hour.
“We as a nation will only succeed when our cities succeed together,” Rawlings said. “The gap between those of means and those that are not as fortunate will only be closed with new, long-term, non-partisan and pragmatic