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McDonald’s announced Wednesday that it would raise wages for its corporate employees by an average of 10% in July. The bottom line: because the announcement only impacts employees in corporate-run restaurants, the increase would leave a whopping 90% of the chain’s nearly 900,000 workers out in the cold.

The move was widely panned by workers and labor advocates as a desperate response to the rapidly growing movement for an increased minimum wage, led by groups like RaiseUP for 15. One Charlotte-area McDonald’s employee summarized the situation perfectly:

“Because we joined together and stood up, McDonald’s was forced to raise pay,” said Brooks, who works at a Charlotte, North Carolina McDonald’s making $7.25 an hour. “Still, this is too little to make a real difference, and covers only a fraction of workers. It’s a weak move for a company that made $5.6 billion in profits last year. We’re going to keep fighting until we win $15 and union rights for all fast-food workers and our families.”

Raising wages is good for workers, businesses and the economy. Bigger paychecks help workers make ends meet and spend more at local businesses. In turn, businesses see more customers, better sales and lower employee absenteeism and turnover. It’s a virtuous cycle that promotes an economy benefitting everyone in North Carolina, not just out-of-state corporate executives and shareholders.

Minimum wage workers, faith communities, labor leaders and supporters from across NC will gather in Raleigh on April 15 as part of a National Day of Action in support of an increased minimum wage and the right to organize. Check out RaiseUP for 15’s Facebook page for details on the rally.

NC Budget and Tax Center

Yesterday, Lawrence Mishel from the Economic Policy Institute made the compelling case that policymakers have missed the mark by focusing on tax levels rather than wage stagnation in their pursuit of improving growth rates and the economic well-being of the majority of Americans.  As Mishel points out:

Wage stagnation is a decades-long phenomenon. Between 1979 and 2014, while the gross domestic product grew 150 percent and productivity grew 75 percent, the inflation-adjusted hourly wage of the median worker rose just 5.6 percent — less than 0.2 percent a year. And since 2002, the bottom 80 percent of wage earners, including both male and female college graduates, have actually seen their wages stagnate or fall.

At the same time, taxation does not explain why middle-income families are having a harder time making ends meet, even as they increase their education and become ever more productive. According to the latest Congressional Budget Office data, the middle 60 percent of families paid just 3.2 percent of their income in federal income taxes in 2011, less than half what they paid in 1979.

Mishel goes on to detail a policy agenda that is far better targeted than tax cuts for delivering benefits to the majority of American workers and the broader economy.  This agenda includes some familiar proposals also appropriate for state policymakers: addressing wage theft and misclassification, raising the minimum wage and protecting workers rights to collectively bargain.  It also includes important macro-economic and trade policy choices like stopping the offshoring of jobs through trade deals like the Trans-Pacific Partnership and ensuring the Federal Reserve holds interest rates down until wage growth is more robust.

Again in Mishel’s own words:

Contrary to conventional wisdom, wage stagnation is not a result of forces beyond our control. It is a result of a policy regime that has undercut the individual and collective bargaining power of most workers. Because wage stagnation was caused by policy, it can be reversed by policy, too.

Commentary

raise the wageIn the giant banana republic of haves and have nots that the U.S. economy has increasingly come to resemble, any bump in the pay dosed out to front line workers by a company as huge and generally predatory as Wal-Mart — however modest — is a good thing. When a half-million people are able to take home a few more bucks a week, that’s good for them and good for the companies with whom they shop…like Wal-Mart. So hooray for the news.

Lest anyone get too moist in the eyes, however, and/or start cranking out humanitarian award nominations for the Walton family gozillionaires, it should be noted that the raises (1.1 percent for the average full-time wage over the next year, to $13 an hour and 5.2 percent for part-timers to an average $10 an hour, by February 2016) still leave those workers bringing home incomes much too low to live on. As the Associated Press reports about the new wage rates:

“Both fall below the $15 an hour ‘living wage’ many union-backed Wal-Mart employees have been pushing for. Driven by rising income inequality and a decades-long decline in middle-class jobs, workers are also campaigning for steep wage hikes at other major non-unionized employers, including McDonalds and other fast food chains….

In Fayetteville, Arkansas — near the company headquarters — a single parent of one child would need to earn $16.85 an hour, almost $4 an hour more than Wal-Mart’s pay raise for full-time workers, according to a living wage calculator created Amy Glasmeier, a professor of economic geography at the Massachusetts Institute of Technology.

The calculator examines the costs of food, housing, transportation and medical care around the country.

In pricier parts of the country, the living wage is far higher: In Philadelphia, it rises to $19.68 an hour. In San Leandro, California, one of the San Francisco Bay Area’s more affordable suburbs, a single parent’s living wage is $23.22.”

The living income standard for a worker with one child in North Carolina averages $16.21 per hour.

Of course, the real solution to the problem of poverty level wages for workers across America would be a sizable bump in the federal minimum wage. President Obama has proposed raising it from $7.25 per hour to $10.10, but obviously, a genuine living wage would be significantly higher.

As the Los Angeles Times editorialized this morning, Wal-Mart’s actions should send a signal to Congress that it’s well past time for such action. Let’s hope fervently that such a message gets through ASAP.

But don’t hold your breath.

Commentary

More than three-million Americans will get a raise tomorrow thanks to common sense new laws in 20 states. Not surprisingly, North Carolinians will not be on the list. This is from a post this morning at Think Progress:

On January 1, 20 states will raise their minimum wages, while one — New York — will increase its wage on Wednesday.

That means that all told, 3.1 million American workers will ring in the New Year with a pay raise.

Eleven states and Washington, DC are increasing their minimum wages thanks to changes in the law either by legislation passed by lawmakers or referenda passed by voters. Nine others will see an automatic increase because their wages are indexed to rise with inflation. Currently, 15 states have automatic increases built into their minimum wages, unlike the federal law.

The January 1 raises range from a 12-cent boost in Florida, whose minimum wage will increase to $8.05, to a $1.25 increase in South Dakota, bringing its wage to $8.50.

The increases in the New Year will mean that in 2015, the majority of states — 29 and Washington, DC — will have minimum wages set above the federal level of $7.25 an hour. They will also mean that 60 percent of all American workers will live in a state with a higher minimum wage.

Another half million workers will get a raise later in 2015, when legislation passed in Delaware and Minnesota to raise their wages goes into effect.

Meanwhile, of course, the minimum wage here in Pope-land remains stuck at a miserly $7.25 with essentially zero prospects of rising anytime soon and the inhabitants of the right-wing think tanks calling for its abolition.

Happy New Year!

minwage-2015

News

There’s an interesting article today from North Carolina Health News about fast-food workers who make too much to qualify for Medicaid in North Carolina but make too little to afford health care on their own.

North Carolina is one of several states that declined to expand coverage of Medicaid in the state, after the state legislature passed a law in early 2013 preventing  expansion that Gov. Pat McCrory signed.  The situation has left hundreds of thousands of low-income workers unable to afford health care on their own and without access to the federal subsidies that would make health care more affordable.

Among those people are a 35-year-old Durham man whose worked for a decade making pizzas at Dominos.

From the article, by Hyun Namkoong:

The Feb. 15 deadline to sign up for health insurance coverage on the federal Healthcare.gov website is quickly approaching, and low-wage workers like DeAngelo Morales and Isaac McQueen are stuck between a rock and hard place.

McQueen, 35, a father of two, has worked at Domino’s Pizza for 10 years as a pizza maker. He says he doesn’t qualify for subsidies offered under the Affordable Care Act. He also doesn’t qualify for Medicaid after North Carolina declined to expand the program to adults who make more than 49 percent of the federal poverty level, which works out to $9,697 a year for a family of three.

“I [make] too much money,” he said with an ironic laugh.

McQueen said there was a plan on the federal health insurance exchange that cost $80 a month, but he couldn’t afford it.

Instead, his health insurance plan is based on hope and faith.

“[I’m just] hoping and praying to God I don’t get sick, because I can’t afford any substantial medical bills,” he said.

 

You can read the entire piece here.