Debunking The Minimum Wage Myths

Minimum Wage Lies

The Article: Maximum lies about the minimum wage by Samantha Valente in The Socialist Worker.

The Text: THE FIGHT to raise the minimum wage in the U.S. has been a long struggle that has gained some momentum over the past few years. In recent months, there have been amazing strikes by low-wage workers across the country–from Wal-Mart workers on Black Friday to fast-food workers in New York City–demanding, among other issues, wage increases for some of the lowest-paid jobs in the U.S.

Raising the $7.25 an hour federal minimum wage is an important demand and a common-sense one. With increases in the cost of living, especially in cities like New York, some economists argue that the minimum should be at least $10.50 an hour.

However, such a seemingly simple demand still raises debate in the U.S. Politicians claim that raising the minimum wage will hurt small businesses, and companies like McDonald’s have threatened mass layoffs if the federal minimum is hiked.

These claims are myths, fabricated to try to counter the growing sentiment in favor of making the minimum wage a living wage.

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SOME BOSSES claim to understand why workers think that $7.25 an hour–or around $15,000 a year for a full-time, year-round job–isn’t a livable wage. But they just can’t afford to pay higher wages, goes the argument. Therefore, making companies pay higher wages would force them to lay off workers in order to keep operating.

Numerous reports have found this argument to be completely false.

According to the National Employment Law Project, 66 percent of low-wage employers in 2011 weren’t small business owners. The majority were large corporations that employed more than 100 workers. These corporations have not only recovered from the Great Recession, but 75 percent report higher revenues than before the recession.

Contrary to the claim that raising the minimum wage would force businesses to lay off workers, the majority of companies can afford to pay workers higher salaries and continue to make profits. When states have raised the minimum wage above the national standard, they have recorded a decrease in unemployment, more consumer spending and a stronger economy.

In addition, most low-wage jobs are concentrated in a small number of industries. The top three employers are Wal-Mart, McDonald’s and Yum! Brand, which operates Pizza Hut, Taco Bell and KFC. The food service industry accounts for 60 percent of all low-wage positions, paying workers less than $10. At McDonald’s, even mid-level managers qualify as low-wage positions.

Raising the minimum wage would impact a small number of industries–in which mega-corporations make record profits.

The claim that a company like McDonald’s can’t afford to pay wages over the minimum is absolutely insulting when you compare the salary of its CEO to one of its crew members.

I worked at a McDonald’s in New York over the summer and did a little math while I was there. In 2011, former McDonald’s CEO James Skinner made $8.75 million with compensation, according to data compiled by Bloomberg. In comparison, crew members made $7.25 an hour, for about $15,000 a year, if they stayed at the job year-round.

If you take Skinner’s total salary in 2011 and assume that he worked 40-hour week, he would have made $4,200 an hour. In one hour, he made 580 times more than the average McDonald’s worker. James Skinner made $33,600 a day, which is twice the salary tht a McDonald’s crew member makes in a year of full-time work.

Looking at it another way, the average worker would have to work for almost 600 years to make the salary that Skinner made in 2011. In one year, Skinner makes more than I could make in at least six lifetimes.

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ANOTHER MYTH about low-wage jobs is that they’re held mostly by teenagers. The image of a “McJob” in pop culture is often of a white, young male working at a fast-food restaurant before getting a “real” job.

Although businesses like McDonald’s do hire many teenagers and senior citizens, most low-wage workers are actually adults who have more than one dependent. Of all workers who work for near or at minimum wage, 76 percent are adults 20 and over.

In addition, the majority of low-wage workers are women. According to the National Women’s Law Center, 64 out of every 100 full-time, low-wage workers are women. Within that 64 percent, a disproportionate number of women of color were employed in low-wages jobs.

African American and Latina women each made up 12 percent of the total number of women employed in 2011. Yet African American women accounted for 15 percent of female low-wage jobs, while Latinas for 16 percent. Reports have also found that people of color, already overrepresented in low-wage food service jobs, are paid significantly less than their white co-workers.

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IF THE minimum wage is raised, it won’t only impact a small number of teenagers. This fight directly affects 35 million Americans. If workers in low-wage jobs fought for a raise to the minimum wage, it would benefit all workers.

Food service employees, for example, occupy some of the most marginalized and exploited positions within the labor force. Winning labor rights in these industries would be a victory that could have a positive impact on all industries.

For the struggle to raise minimum wage to be successful, it must take up issues of racism and sexism within the workplace, which are used to justify such exploitative working conditions. The fights against these forms of oppression are inextricable from the fight to raise the minimum wage.

It’s not as if McDonald’s is unaware of the unjust wages it pays or the unjust working conditions it imposes. The reason why these companies don’t pay higher wages is because the success of their businesses hinge on the exploitation of workers. McDonald’s works hard to keep it that way by lobbying the government and keeping workers in marginalized and unstable employment.

In 1995, Ronald Beavers, then McDonald’s vice president, said, “They [crew members] have no guaranteed employment rights. They do not have guaranteed employment or guaranteed conditions of employment.” McDonald’s founder Ray Kroc was clear about what his company was doing when he said, “We sold them a dream and paid them as little as possible.”

McDonald’s profits are a direct result of low-wage employment. So we can’t wait for McDonald’s to change its policies because that day will never come. Activists need to continue to organize the fight to the raise minimum wage, which has been building momentum over the past several years. This struggle has the potential to make a significant impact on the labor movement–and on the lives of millions of workers.

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