On April 30, Senate Democrats were unable to advance the Minimum Wage Fairness Act (sometimes referred to as the Harkin/Miller bill), which would raise the federal minimum wage from the current $7.25 an hour in three increments to $10.10 an hour by 2016. The vote in the Senate failed by 54-42 to clear the filibuster threshold. In addition to tying the wage floor to an inflation index, the bill would also raise the so-called “tipped” minimum wage for restaurant servers and other tipped workers to 70% of the standard minimum wage. The “tipped” minimum wage is now $2.13 per hour before tips and hasn’t been raised since 1991. Even if the measure garners the necessary 60 votes, it still faces nearly impossible odds in the GOP-controlled House, where Republicans have shown no interest in bringing it to the floor and the Speaker, John Boehner (R-OH) has been adamant in his refusal to even consider a minimum wage bill.

Senator Susan Collins (R-ME) has been promoting a bipartisan proposal that would increase the minimum wage to just $9.00 over the same time frame, hoping to rally a coalition around this deal. But Senate Majority Leader Harry Reid (D-NV) wants all Democrats to strongly support the Harkin bill, which he plans to offer again (if not several times) in subsequent sessions before the fall midterm elections.

In fact, a minimum wage of about $9 an hour would only amount to a wage of $18,720 annually, below the current poverty-line threshold of $19,790 for a family of three. The May 1 issue of The Hill quoted Reid as saying, “We are not going to compromise on locking people into poverty.”

Discussion on the measure, both inside and outside Congress, has fallen along rather familiar ideological lines. Democrats point out how the wages of minimum-wage workers have eroded over the past 40 years, and argue that if fully phased in by 2016, the new minimum wage would push a family of two or three above the federal poverty line – something that has not happened since 1979. Republicans’ resistance was predictable. They argued that a wage hike would lead to a loss of employment for millions of workers, relying extensively on a February 2014 report by the Congressional Budget Office (CBO) that estimated that a $10.10 minimum wage would lead to the loss of somewhere between zero and one million jobs. (The Republicans chose to use the figure 500,000.)

Various analyses of the CBO report (the subject of an earlier blog) clarified that job losses due to raising the minimum wage would be negligible. More than 600 economists, including several Nobel Prize winners, at that time endorsed a $10.10 minimum wage, agreeing that raising the wage to that level would have no effect on employment. More importantly, the CBO report also envisioned higher income for 16.5 million low-earning workers.

Minimum wage legislation is opposed by some business groups (not all), none more vociferously than the businesses represented by the National Restaurant Association. Interestingly, the association had hundreds of members lobbying Congress this week on several issues, including opposition to a higher minimum wage. According to the Bureau of Labor Statistics, about two-thirds of the 3.3 million people who earned $7.25 an hour or less last year worked in food preparation and serving.

The restaurant industry and other low-wage businesses double-fleece taxpayers by opposing the minimum wage and allowing taxpayers to spend about $7 billion a year in federal assistance payments to close the gap between what minimum wage workers are paid and what they need to meet their most basic expenses. Taxpayers also subsidize the outsize salaries of the CEOs of low-wage employees — to the tune of $232 million in 2012 and 2013 for just the top 20 restaurant chains. These CEOs earn, on average, more than 1000 times the salary of an average fast-food worker.

Let’s take a look at the views of various other groups regarding the minimum wage.

First, the general public. A New York Times/CBS poll and a Huffington Post/YouGov poll, conducted in January and February 2014, respectively, are remarkably similar in their findings. Both indicate that a minimum wage hike to $10.10 is highly popular, with 62% of Americans supporting the raise and only 26% opposed. The Huffington Post/YouGov poll sliced the responses further to indicate that 85% of Democrats and 60% of Independents think the minimum wage should be increased, while only 31% of Republicans agree. There is no doubt that a gulf exists between the two major parties on the matter of economic fairness. Starkly different views have become more and more common.

To most Democrats, many Independents and a few Republicans, “fragile” is the most apt descriptor of the finances for many working families. Even with a steady paycheck, keeping the bills paid can be overwhelming, and saving has become almost impossible for many. Not only are ordinary goods and services continuing to rise in price, but costs for many of those most critical to escaping poverty – education, healthcare and child care – have soared. The latter costs have served as a strong check on social mobility.

Those agreeing with Rep. Paul Ryan (R-WI) that safety-net programs like unemployment insurance, SNAP (food stamps) and WIC are not as effective as economic growth in halting poverty, need to note that decades of economic growth have been completely unsuccessful in raising the incomes from work of many middle, lower-middle, and low-income families.

The National Urban League, the NAACP, BET networks and the National Council of La Raza strongly support raising the minimum wage largely because such legislation would increase the total combined wages of people of color by $16.1 billion. A Center for American Progress (CAP) report concluded that six million workers would be lifted out of poverty if the minimum wage were raised to $10.10, and 60% of them would be people of color. Blacks, Latinos and Asians, who constitute a larger share of minimum wage workers than their share of the overall workforce, would benefit significantly.

The Center for American Progress reminds us of some significant statistics related to the minimum wage:

• Earnings for the top 1% have risen 177% since 1980, but minimum-wage workers are actually making 16% less than in 1980.
• Two-thirds of all minimum-wage workers are women.
• 21 million children live in households where at least one parent is a minimum-wage worker.
• 3.5 million people of color make up a disproportionate number of minimum-wage workers.
• 21 states and many localities have already raised their minimum wage to levels above the federal minimum of $7.25, most of them tired of waiting for Congress to act.

After the Minimum Wage Fairness Act was blocked in the Senate, the Service Employees International Union (SEIU) also reminded us that the minimum wage has fallen far behind inflation even though productivity has risen, and workers are not sharing in the benefits of their labor because corporations are hoarding profits. Company managers, directors and high-level employees seem to be the only beneficiaries of rising profits.

The National Employment Law Project (NELP) expressed its disappointment with the outcome of the 54-42 vote by lamenting that the minimum wage has lost more than 30% of its spending power over the last 40 years. And the Economic Policy Institute (EPI) stated that raising the federal minimum wage would boost GDP by nearly $33 billion and generate 140,000 new jobs over three years as workers spend their raises in their local businesses and communities.

More than 350 clergy members of various faiths signed a letter to members of the Senate stating that “the dignity of work and the security of the family are non-negotiable moral values” and that “for the minimum wage to be moral and just, it must be a living family wage.” They referred to repeated admonitions in Scripture against exploiting and oppressing workers and urged their members to flood their senators with phone calls, emails and letters to increase the minimum wage at the first opportunity.

Many of the signatories of the letter were members of the Catholic clergy. The April 30 edition of the National Catholic Reporter (NCR) calls our attention to the fact that, while Catholic teachings would urge us to press for an increase in the minimum wage, current proposals do not really constitute a just, living wage and thereby becomes a kind of “moral understatement, a mere baby step where giant leaps are in order.” A just, living wage would provide enough money to support the family, to put some aside for retirement, and to take care of health needs so that the family in question can live and get ahead. A living wage is at least 20% higher than the proposed minimum wage. Thus, looking at the federal minimum wage, even if increased, through the lens of Catholic social teaching, we know that it is failing to meet the minimum standard of our faith. All the more reason to continue working to raise it.

Catholics in Alliance for the Common Good (CACG) agrees that a minimum wage falls short of a just wage, because it fails to provide the resources for individuals to take care of themselves and form and sustain their families.  Both NCR and CACG refer to the forceful example of Pope Francis speaking out on the issue of economic justice and call on their readers to emulate his example.

NCR is forced to remind us of the cognitive dissonance in the church on this issue of social justice. Many U.S. bishops have honored politicians hostile to increases in the minimum wage. For example, Paul Ryan, whose budget proposals have been condemned by the bishops’ conference was, nevertheless, praised by Cardinal Timothy Dolan of New York as an “exemplary public servant.” Ryan has also called raising the minimum wage “bad economics.”

There are numerous other examples that could be cited, one of the worst being the $1 million contribution from the Koch brothers accepted by Catholic University for their newly opened business school. Unfortunately, the polarization that is so strong in our politics and society has also seeped into ecclesial life to the detriment of the church’s social teaching.

Those of us who are supporters of NETWORK and believe strongly in Catholic social teaching have a lot on our platters to occupy our time, talent and treasure.

A couple of months ago I met Robin, a young woman in her mid-twenties, who works for minimum wage in a profitable clothing store chain. We were at the White House for President Obama’s signing of the executive order to raise the minimum wage for federal contract workers. She was excited that a good friend of hers would receive a raise because of this order. Her hope was that eventually she too would be able to get a raise.

After we had spoken for a time while we waited for the president, she talked a bit about how difficult it was to live on minimum wage – about $15,000 a year before taxes. She confided in me that “you wouldn’t know it by looking at me, but I have to live in a homeless shelter because I can’t afford rent in this area.” I was stunned. I knew it was difficult to live on minimum wage, but had not known the enormous challenge just to get by. Robin is well-spoken and personable, with an electric smile, and yet she struggles every day just to get by. Raising the minimum wage would allow Robin to get her own place.

A few weeks later I met Adriana, who also works for minimum wage. She has a young child. She, too, is struggling. She has to pay $500 per month for child care and $240 for transportation. She is left with little more than $600 per month for rent, food, clothing, medical care, etc. Adriana says that it is almost impossible. The way she gets by is that she rents a room for herself and her young child in a house in the area. She is with other people she does not know who also rent rooms, but is so grateful to have a roof over her head. Raising the minimum wage would allow her to find a better environment for herself and her child.

A while ago, I met Billy and his wife, who both work for minimum wage. They decided that they would pool their salaries to get an apartment for themselves and their two boys, ages 14 and 6. In order to get food, they use food stamps (SNAP: Supplemental Nutrition Assistance Program) during the day and go to St. Benedict the Moor free dining room every evening. Billy said he wished he didn’t have to do that, but he knew that he could not pay for food, especially for his growing sons. His 14-year-old had just been through a growth spurt and needed constant food. Billy told me that as a parent he could get by with eating once or twice a day, but growing children need to eat regularly. Raising the minimum wage would allow Billy and his wife to feed their hungry children without worry.

All three of these stories are about the truth of life on minimum wage. The “Live the Wage Challenge” allows me to live a little bit of the anguish faced by each of these fine people. While we won’t live in a homeless shelter or in a room surrounded by strangers, we will know the stress of trying to feed our families, pay utilities, allocate some for rent, and get to work on approximately $300 for the week. But why should we do this?

I learned from Ann who works at Chautauqua in New York that one good reason to do this is to learn just how much hard work and ingenuity goes into living on minimum wage salaries. Ann told me that she and her husband both lost their positions in the recession, and even though they both have masters degrees they have had a hard time finding work in their fields. They have taken available jobs where her husband is working 50 hours a week and she is working 40 hours a week in a bookstore. They have four children who are now in their teens. While they make slightly above minimum wage, they are applying for SNAP benefits to feed the family.

She commented on how hard it is to have low incomes. She said that it takes much more work than when she and her husband made professional salaries. They are growing some of their food to supplement their earnings and do any odd jobs that they can. They never have the luxury of going out to eat or buying prepared foods. She is not opposed to work, but rather expressed surprise about just how much time and hard work it takes to survive living in poverty. She had no idea just how tough it was when they had professional salaries.

It is for Ann and her family that it is worth trying the Live the Wage Challenge. I need to have my eyes opened to the challenge of living with low wages. When my eyes are opened then I can share my experience with those who might not know just what a struggle it is to care for your family on impossibly low salaries. With open eyes, then maybe we can all work to change the culture of our society where it is currently acceptable to pay subsistence wages.

We the People need to stand up and say “Raise the minimum wage!” It is good for our people and our economy. It is good for our nation as a whole. Raise the wage for Robin, Adriana, Billy and his wife, and Ann and her family.

We the People are better than our current reality.

Sister Simone Campbell is the executive director of NETWORK, A National Catholic Social Justice Lobby, and author of A Nun on the Bus: How All of Us Can Create Hope, Change, and Community.

While the Census Bureau data shows that the official poverty rate fell from 15% in 2012 to 14.5% in 2013, that fact is little consolation to low and middle-income families whose wages and salaries have been largely stagnant, and in many cases, even declining since 2000. Median income for non-elderly households fell from $65,785 to $58,448, a decline of $7,337 or 11.2% from 2000 to 2013. The data is from the Census Bureau, but the idea of following wage trends to determine the path of income inequality is straight from the research and writing of the Economic Policy Institute (EPI). When one examines the data over a longer timeframe, the trends are deeply disappointing and the culprit is wage stagnation.

In the words of EPI, “Since 1973, the median man working full-time, full-year has seen no sustained growth, dropping from $52,421 in 1973 to $51, 055 in 2002 and falling even further over the 2002-07 recovery and the recession to $50, 033 in 2013.” Women’s wages have also stagnated, but for a shorter period of time, from $39,108 in 2002 to $39, 157 in 2013. As Jared Bernstein argues in his September 16 blog “On the Economy” these types of facts “contribute to the growing disconnect between growth and the economic well-being of most households.” The reality of a lack of shared prosperity is a fundamental challenge to Congress, many of whose members conveniently ignore the idea of the common good.

Before we congratulate ourselves on attaining a 14.5% poverty rate, let’s remember that that figure is the same amount of poverty we suffered in 1993, in 1982 and in 1966, according to Census Bureau charts. That 14.5% poverty rate is well above the 11.3% rate in 2000. Today’s median income is still 8% lower than in 2007 and is barely keeping up with inflation. There were 45.3 million people living in poverty in 2013, roughly the same as the year before and not a statistically significant change from 2012. The major reason for the decline in the official poverty rate is a perceptible increase in the number of full-time jobs, which allowed a gradual shift from what had become a trend toward part-time employment.

Using the Gini Index – the most common measure of household income inequality used by economists, with zero representing total income equality and one equivalent to total inequality – income inequality was .476 in 2013; the change from 2012 was not statistically significant. And changes in income inequality between 2012 and 2013 were not statistically significant as measured by the shares on aggregate household income by quintiles. It is worth noting, however, that income gains for the top 5% over the period from 2009 to 2013 was .5% or $1542, the only income group to experience any gains.

Robert Greenstein, President of the Center on Budget and Policy Priorities (CBPP) reminds us that federal austerity policies, such as the sequestration budget cuts as well as tax policies that took effect in 2013 reduced economic growth substantially. The Congressional Budget Office (CBO) projected at the time that these policies alone cost the economy more than one million jobs.  We could have enhanced economic growth and strengthened productivity if we had invested more in infrastructure and training people for jobs.

The poverty data released by the Census Bureau on September 16, 2014 doesn’t include the impact of many governmental programs on the poverty rate, such as non-cash benefits (e.g. Earned Income Tax Credit [EITC]) and expenses incurred (e.g. out-of-pocket medical expenses, child care). This rate is known as the Supplemental Poverty Measure (SPM) and is considered to be a more accurate measure, even though it does not replace the official poverty measure. Poverty estimates using the SPM were published by the Census Bureau in November 2011, 2012 and 2013. Supplemental poverty estimates for 2013 will be published in October 2014.

Researchers at Columbia University looked back with their own SPM-like measure in 2013 and concluded that government anti-poverty programs were a significant deterrent to poverty, especially among children, the group that is absolutely the worst-off in the poverty statistics again this year. If the poverty data looks high today, it would be even higher without these vital government programs.

In 2012, the Supplemental Poverty Rate was 16%, rather than the 15.1% that the official poverty rate indicated.  Without Social Security, the Supplemental Poverty Rate would have been 24.5%. The National School Lunch Program lowered the SPM by about .5%; housing subsidies lowered it by approximately another 1%.  It’s important to keep in mind that the official poverty rate does count Social Security, Supplemental Security Income, unemployment insurance, child support and Temporary Assistance for Needy Families (TANF), but does not capture other cash benefits (e.g. food stamps) and non-cash benefits, like the EITC and does not include many significant expenses of poor families. By failing to capture all benefits that are often vital to poor families as well as many of their key expenses, the official poverty statistics are inadequate.

The value of the safety net in the reduction of poverty cannot be overstated. The Census Bureau has provided the data that allows us to conclude that the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) has lifted 3.7 million people above the poverty line in 2013, including 1.5 million children. And unemployment insurance also kept 1.2 million people out of poverty in 2013. Without these and other safety net programs the poverty rate would have been even higher.

In Pope Francis’s address to the UN Food and Agricultural Organization (FAO) on June 20, 2013, he made clear why groups like the FAO (and, by extension, all of us) must continue to work with low-income families: “A way has to be found to enable everyone to benefit from the fruits of the earth, and not simply to close the gap between the affluent and those who must be satisfied with the crumbs falling from the table, but above all to satisfy the demands of justice, fairness and respect for every human being.”

(There is much to say about how different age, gender, racial and ethnic groups fared in the poverty statistics. We will focus on these various groups next week.)

Ben and his wife Marce were raised in California but spent much of their working years in Texas where Ben rose up through the ranks to become Vice President of two separate oil companies.

As many parents do, they loaned money to their two sons by withdrawing funds from their retirement account to start businesses. Unfortunately, the loans were not repaid and by the time the couple moved back to Orange County, California to be closer to one son, their resources were close to being depleted.

By the time Ben’s health declined and he died at 80, his wife Marce had little left. A long-time diabetic, Marce developed a cardiac condition and could not remain independent. Fortunately with her Social Security widow’s benefit and access to a VA benefit from her husband, she was able to remain near her friends and family until she passed away at 81.

NETWORK believes that Social Security should not be means-tested because wealth comes and goes, and no one can predict what their financial future holds. For their whole lives, Ben and Marce paid into Social Security so that if they were to experience a time of need, they could count on it as a baseline of support. Older adults like Marce deserve to live in dignity.

Our Social Security system was created so that people could avoid falling into poverty after a life-long career. Contributions to our Social Security system are capped at $118,500 this year, which means that our nation’s top earners finished paying their share on February 12.

A just tax system requires that all people pay their fair share to help raise reasonable revenue for responsible programs, like Social Security, which is proven to help keep people over age 65 out of poverty. This week: Make three phone calls to support Social Security— one call to each member of your congressional delegation.

Call your Representative at 1-888-897-9753

Call your Senior Senator at 1-888-410-0619

Call your Junior Senator at 1-888-738-3058

Here is what you might say when you call:

“My name is (NAME) and I am a constituent from (CITY, STATE) and a member of (FAITH COMMUNITY). I’m calling because I support Social Security as a minimum baseline that ensures all older adults live in dignity. Many older adults experience poverty, even if they were well-off in their working years, so I do not believe means-testing Social Security is good policy. A just system requires all workers pay their fair share, which is why I also believe our nation’s top earners should invest in Social Security at the same rate as everyone else. Thank you.” 

Senator Patty Murray (D-WA) and Congressman Bobby Scott (D-VA) are prepared to introduce a federal minimum wage (MW) bill in both the Senate and House that would attempt to raise the current MW in five steps to $12 per hour, gradually eliminate the subminimum wage for tipped workers, and index those wages to the median wage (not the rate of inflation).

This plan follows a flurry of activity over the past several months, including numerous state-level and municipal-level jurisdictions passing MW laws in the latter part of 2014, several states increasing their MW as a result of referenda submitted to voters in the November general election, as well as several well-known national retail chains – The Gap, Ikea, Walmart, Target, and McDonald’s – raising their MW rates. We thought that this might be an appropriate time to share an update with our NETWORK members about these momentous events.

The spate of state and local MW laws can also be attributed to congressional gridlock that buried any chance of passing an earlier White House-approved and Democratic-sponsored bill in Congress; to an improving national economy that no longer had excess workers who would agree to work for minimum wage; and to widespread union-backed (especially the Service Employees International Union – S.E.I.U.) protests, often featuring MW employees themselves. State and local jurisdictions have frequently been impelled by their own citizens to tackle the problem through laws – at the state level, and ordinances – at the city level, to substantially raise the wage floor for low-paid workers in their states and communities.

The first thing to note about all MW changes is that they are complex laws. Some result in a single increase, others in multiple increases over a number of years; some are indexed to the rate of inflation, others are not; most affect a substantial number of employees, but exempt others (of course, all employee affected by the Federal Labor Standards Act – FLSA — are exempt); some issue changes for certain types of businesses before others; some take health benefits into account, others do not, and so on. Our discussion will not try to parse out each of these changes, so the complexity of these laws must be borne in mind in the information that follows.

State-level Changes in the MW

Let’s start with state-level MW changes. Currently, some 29 states and the District of Columbia have minimum wage rates above the federal minimum of $7.25 per hour, and 10 of them enacted their increases in 2014, the “Year of the Minimum Wage,” as Littler Publications dubbed it in its briefing paper of November 13, 2014. However, because of major MW changes at large retail chains in 2015, that appellation may no longer be appropriate.

Here are the 29 in early 2015, thanks to Littler Publications and an online job search article, Minimum Wage Rates for 2015:

• Alaska: $8.75 effective February 24, 2015 ($9.75 effective January 1, 2016)
• Arizona: $8.05 (tipped workers $5.05)
• Arkansas: $7.50 ($8.00 effective January 1, 2016; $8.50 effective January 1, 2017)
• California: $9.00 ($10.00 on January 1, 2016)
• Colorado: $8.23 (tipped workers $5.21)
• Connecticut: $9.15 ($9.60 on January 1, 2016; $10.10 on January 1, 2017)
• Delaware: $8.25
• District of Columbia: $10.50 on July 1, 2015 ($11.50 in 2016)
• Florida: $8.05 (tipped workers $5.03)
• Hawaii: $7.75 ($8.50 in 2016; $9.25 in 2017; 10.10 in 2018
• Illinois: $8.25
• Maine: $7.50
• Maryland: $8.00 ($8.25 on July 1, 2015; $8.75 July1, 2016; $9.25 July 1, 2017; $10.10 July 1, 2018)
• Massachusetts: $9.00 ( $10.10 on January 1, 2016; $11.00 on January 1, 2017)
• Michigan: $8.15 ($8.50 in January 2016, then annual increases to $9.25 per hour by 2018)
• Minnesota: $8.00 (effective August 1, 2015, large employers are required to pay workers $9.00 per hour and small employers $7.25 with $9.50 by August 2016, but exceptions based on worker age and company size)
• Missouri: $7.65
• Montana: $8.05
• Nebraska: $8.00 ($9.00 on January 1, 2016)
• New Jersey: $8.38
• New Mexico: $7.50
• Nevada: $7.25 for employees who receive qualifying health benefits; $8.25 for those who do not
• New York: $8.75 ($9.00 on December 31, 2015; tipped workers $7.50 on December 31, 2015)
• Ohio: $8.10
• Oregon: $9.25
• Rhode Island: $9.00
• South Dakota: $8.50
• Vermont: $9.15 ($9.60 in 2016; $10.00 in 2017; $10.50 in 2018)
• Washington: $9.47
• West Virginia: $8.00 ($8.75 in 2016)

A recent article by the National Employment Law Project (NELP) provides clear evidence, if any were still needed, that raising pay and  improving job quality does not reduce employment or encourage businesses to leave urban areas. Raising local minimum wages is now considered a mainstream policy tool for fighting income inequality at the local level.

The NELP article summarizes the most rigorous research – most completed by universities, but a major study done by the Center for Economic and Policy Research (CEPR) is also included – to demonstrate that job growth is not slowed nor does business relocate outside municipal boundaries. And these findings are consistent with the bulk of research on higher state minimum wages.

Municipal-level Changes in the MW

Boosting local minimum wages gives urban areas distinct advantages, which cannot be overlooked, such as allowing higher-cost cities to set a MW to better correspond to living costs, and giving localities the power to address the problem if their state legislature refuses or is slow to address the issue.

In addition to its presentation on the economic evidence of raising local minimum wages, the NELP article also lists the affected municipalities that have passed MW ordinances since 2012, although most of the activity has been in the last year or two. The non-state areas that have (or intend to) raised their MW are:

Albuquerque, NM                   $8.60

Berkeley, CA                           $12.53 (by 2016)

Bernalillo County, NM            $8.50

Chicago, IL                              $13.00 (by 2019)

Las Cruces, NM                       $10.10

Los Angeles, CA                       $13.25 (by 2017 – mayor)

$15.25 (by 2019 – city council)

Louisville, KY                           $10.10 (by 2017)

Montgomery County, MD       $11.50 (BY 2017)

Mountain View, CA                 $10.30 (in 2015)

New York, NY                          $13.13 (by 2016)

Oakland, CA                            $12.25 (in 2015)

Portland, ME                           $10.68 (by 2017)

Prince Georges County, MD   $11.50 (by 2017)

Richmond, CA                         $13.00 (by 2018)

San Diego, CA                         $11.50 (by 2017 – will be reviewed by voters in 2016)

San Francisco, CA                    $15.00 (by 2018)

Santa Fe County, NM              $10.66

San Jose, CA                            $10.15

Seattle, WA                             $15.00 (by 2018 – 21, depending on type of business)

Sunnyvale, CA                         $10.30 (in 2015)

Since Seattle’s MW – on-the-way-to-$15.00 per hour (the highest in the nation) – is such groundbreaking legislation and it just went into effect, we should consider what they have accomplished, especially since their MW is more than double the federal MW and nearly double that of Washington State.

Seattle’s MW is initially $11.00 per hour (as of April 1), and this will be followed by incremental increases over the next two-and-a-half years (for most large businesses and depending on healthcare benefits involved – remember it is complicated) and over the next four-and-a-half years for smaller ones, after which the MW is tied to the cost of living in the area.

Seattle’s changes have been followed closely by other cities, especially as labor groups and workers bring pressure on retailers and fast-food companies to pay a “living wage,” which in their literature, at this point in time, is about $15.00 per hour. Interestingly, Seattle’s new ordinance was passed unanimously by its nine-member City Council and immediately endorsed by Seattle’s mayor.

MW Changes in Nationwide Retail Establishments

While the decision of The Gap and IKEA are significant, three of the largest retailers and fast-food businesses have introduced pay hikes within the last few months and the first few in 2015 – Walmart, Target and McDonald’s. There is little doubt that the impact of these companies moving on the MW issue has influenced Capitol Hill and has moved the MW debate to a different level in our thinking. After all, Walmart is considered a trend-setter in the retail industry and its move alone affects the lives of an estimated 500,000 workers, according to the Huffington Post.

Starting this month, annual MW rates at Walmart will be raised to $9.00 per hour and next February 1, pay will go up to at least $10.00 per hour. In addition, employees have been promised greater control over their schedules, a problematic issue that finally has management’s attention. McMillon, the CEO of Walmart, has suggested that an improving economy – unemployment has fallen from a peak of 10% to 5.6% recently – has pressured Walmart to raise wages.

However, OUR Walmart, the union-backed group organizing protests at Walmart, took credit for the company’s announcement. “We are so proud that by standing together we won raises for 500,000 Walmart workers, whose families desperately need better pay and regular hours from the company,” claimed Emily Wells, a leader of the group. But she said that the improved wage package still fell short of what was needed. “With $16 billion in profits, Walmart can afford to provide the good jobs that America needs – and that means $15 an hour, full-time, consistent hours and respect for our hard work,” quoted CNN’s Money.

Even with a $10 hourly wage, workers and their families would still fall below the poverty line, but it’s far better than the current federal MW of $7.25, which numerous states still consider the norm.

The Wall Street Journal reported that without explicitly announcing an increase, Target plans to ensure that all employees will see at least $9 per hour in their first April paycheck. Of course, this follows their retail rival Walmart (as well as TJX, owner of T. J. Maxx, Marshalls and Home Goods), which made its announcement in February. With 347,000 employees in the U.S., along with hundreds of thousands of others at Walmart and TJX stores, the major retail hold-out was McDonald’s and similar nationwide fast-food chains.

At last, on April 1, McDonald’s joined the preceding group of retail outlets in raising their MW, but the world’s largest restaurant group agreed only to pay $1 more than the local MW beginning July 1, 2015 and only at the 1,500 stores the company owns, not at the approximately 13,000 stores owned by its franchisees. This increase will be followed by another of the same size by the end of 2016 and will allow employees starting July 1, 2015 to accrue paid time-off.

The April 2edition of the Financial Times notes that the franchisee employees would be eligible for a new education financial aid program starting July 1, 2015. Critics, of course, are angry that so many thousands of employees are ignored in the pay raise as well as the fact that McDonald’s has insufficiently responded to the national campaign that advocates for a $15 hourly MW and union rights for all employees.

According to the March 30 online issue of the New York Times, the SEIU has been increasing pressure on McDonald’s. It was the SEIU that helped persuade the National Labor Relations Board (NLRB) to accuse McDonald’s of being a joint employer with its franchisees, a move fraught with many repercussions for the chain, not the least of which is the wage issue. The president of the SEIU said, “This movement is changing our political debate [and what] employers think they can get away with… This movement is way beyond fast food. We aren’t going to stop until the service sector in the U.S. becomes the foundation for the next American middle class.”

There is a wave of actions planned for McDonald’s stores for April 15, including strikes, walk-outs and protests in more than 200 cities nationwide. These and similar but smaller protests have been occurring for more than two years and while not wholly successful at McDonald’s, has prompted a national debate about economic inequality with low-wage workers at its core.  And surely, it has influenced many of the cities and states listed above to raise their MW.

The Economic Policy Institute (EPI), in a report issued on April 1, indicated the key reason why raising the MW is such a significant issue. Their research data demonstrates that in the late 1960s the MW was equal to about 53% of the average middle-class wage. Yet by 2014, after infrequent and inadequate increases, the MW now is equal to only 35% of the average production worker’s wage. (Perhaps this accounts for that aspect of the current Murray/Scott bill referred to above). That gap has been particularly demeaning to and difficult for women workers, who constitute a larger percentage of MW workers than their male counterparts.

Conclusion

NETWORK has consistently supported raising the MW to the level of a “living wage,” which should provide for a life of human dignity, will lift families out of poverty, will meet basic human needs in a sustainable way, and will place those needs before accumulation of profits. A “living wage” should allow wage earners to provide adequate housing, quality healthcare, child care, education and transportation for their families.

The recent activity described above, in the form of cities and states as well as major retail corporations agreeing to raise their MW could provide the impetus for another federal push, which we applaud. We will continue to promote upgrading the MW to a living wage.