Without a broad middle class that earns decent wages and can legitimately afford to consume American goods and services, there can be no sustainable market for domestic businesses. We can rebuild on credit, but we will crash again–soon.
Rather than examine the decline in jobs and wages, our political and corporate leaders just craft new ways to extend credit to consumers. How long must hard working Americans be subjected to wage slavery?
From The Nation
This Week in Poverty: Justice for Janitors and Low-Wage Workers
Last week I reported that janitors in Houston reached an impasse in their month-long effort to renegotiate their expiring contract with cleaning contractors. The janitors are currently paid an hourly wage of $8.35 and earn an average of $8,684 annually. They seek a raise to $10 an hour over the next three years, but the contractors offered just a $0.50 pay raise phased in over five years.
In response, the janitors began asking building owners and tenants to intervene on their behalf—especially since the cleaning contractors claimed that those corporations were unwilling to cover higher wages, so their hands were tied.
Indeed 3,200 janitors in the city clean the offices of some of the largest and most powerful corporations in the world. Surely these powerbrokers could influence the outcome of any negotiations? Yet despite janitors sharing their personal stories of struggling in poverty and asking for help from the likes of Chevron, ExxonMobil, Wells Fargo, Shell, JPMorgan Chase and real estate giants like Crescent Real Estate Equities (a subsidiary of Barclay’s) and Hines Real Estate, no party stepped forward as hoped.
“I went to speak to the owner of my building, Crescent, and the only response we got was the chief of security saying ‘I don’t care,’ ” said janitor Maria Teresa Lopez. “We know we are not important to these cleaning companies. They know we live paycheck to paycheck, yet our paychecks are often late by days.”
Additionally, janitors began reporting threats and harassment at the workplace as organizing efforts ramped up. So on Tuesday the janitors called a strike at the nine office buildings at Greenway Plaza. Charges of unfair labor practices were filed with the National Labor Relations Board. At another site, eleven janitors who work for New York–based cleaning contractor Pritchard also went on strike to protest unfair labor practices and were notified that they wouldn’t be allowed to return to work—in apparent violation of federal law. As of yesterday evening, the strike was scheduled to expand to two more buildings, including Wells Fargo Tower, where janitors report that the cleaning contractors are interfering with their right to engage in union activity. SEIU Local 1 spokesperson Paloma Martinez told me that the strike could now “move to any part of town, to several buildings or a whole section of town.”
“It was the threats that pushed the janitors over the edge,” says Martinez. “Not only are you trying to survive day-to-day, trying to just put food on the table, but then you go into a caustic environment at work just because you’re trying to make your workplace better.”
In contrast to the building owners and tenants, the faith community in Houston has taken a strong stand to support the workers. It began on Sunday with an op-ed in the Houston Chronicle by Joseph Fiorenza, archbishop-emeritus of the Galveston-Houston Diocese.
“Critics of the requested meager increase seem to be either oblivious to a janitor’s struggle to live on $9,000 a year, or they are callous to the devastating effects of poverty on human life,” writes Fiorenza.
On Wednesday leaders from the Christian, Muslim and Jewish communities held a press conference to support the janitors and other low-wage workers, and talk about the importance of “family-sustaining wages” in a town where more than 825,000 people live in poverty. In 2006 too, faith leaders were instrumental in the janitors’ successful fight for union representation.
“The faith community really is the backbone for the janitors’ fight and for all working people in Houston,” says Martinez. “They provide a moral compass that business leaders in this town can’t turn their backs on.”
Although the moral case is clear and should be sufficient for people of conscience, the janitors and advocates are also making the case that raising sub-poverty wages is the best way to ensure Houston’s long-term economic viability. Latinos now represent 40 percent of the city’s population, and half of Latinos age 25 and older don’t have a high school degree. The business community has made it clear that the city needs to reverse its skyrocketing dropout rates.
“Those rates are a direct result of these poverty jobs and how pervasive they are in this city. It’s about parents not being able to be present at home,” argues Martinez. “They are working two to three jobs just to feed their families and put a roof over their heads. So you have kids who don’t see their parents, and parents who are exhausted all of the time. It’s difficult to give kids the guidance they need under those circumstances.”
“The youth of our community doesn’t [finish] high school because they are concerned with helping their parents survive day-to-day,” says Lopez. “I don’t want my daughter to fall into this trap, so I am fighting for her.”
The janitors are making it clear that they see their fight for decent wages as one for low-wage workers throughout the city. Despite the fact that Houston leads the nation in creating new millionaires, one in five people working in the city makes less than $10 an hour, and Texas is tied with Mississippi for the highest proportion of minimum-wage jobs in the nation.
“We are directly calling on other workers to come out with us. This momentum can be used to help all workers in Houston,” says Martinez. “This is about bringing energy, motivation and inspiration to other low-wage workers—restaurant workers, hotel workers and others—saying we can unite and organize. We can do something great together if we help each other.”
The Minimum Wage: 100 Years Later
June 4 marked 100 years since the first minimum wage law in the United States was passed by Massachusetts. It wasn’t until 1938 that a federal minimum wage was established, and Jack Temple, policy analyst for the National Employment Law Project, says that the case made for it in an essay by then Secretary of Labor Frances Perkins “could have been written today.”
Perkins feared “fly by night” sweatshop operators profiting from rock-bottom labor costs, describing them as “men of inferior business caliber who probably could not survive at all if it were not for their willingness to be entirely ruthless in exploiting labor.”
That kind of exploitation is alive and well today.
“The fact is low wages are still a key growth strategy for many employers,” says Temple. “Low-wage industries and jobs are among the economy’s fastest-growing, and last year no fewer than thirty-five of the nation’s fifty largest low-wage businesses posted gains that exceeded their pre-recession levels, even after adjusting for inflation.”
Those gains for employers are helped by a federal minimum wage that is stuck in reverse.
For most of the 1960s and ’70s, a worker with a full-time minimum-wage job could lift a family of three above the poverty line, about $17,300 today. The real value of the minimum wage peaked in 1968 and would be over $10 per hour today if it had kept pace with inflation. But the wage has been raised only three times in the past thirty years and now stands at $7.25 per hour, which results in sub-poverty earnings of $15,080 for a year-round, full-time employee. The minimum wage for tipped workers is a stunning $2.13 per hour and it’s been locked there since 1991. As a result, food industry servers in the United States are three times more likely than the general workforce to be paid sub-poverty wages and twice as likely to need food stamps.
“Making matters worse, we’re now three years out from the official end of the recession, and workers’ real average hourly earnings are declining rather than rebounding,” says Temple.
Many Americans recognize the injustice in the plight of a worker who diligently performs his or her duties only to remain mired in poverty, forced to make choices between food, rent and medicine. Today, more than two-thirds of Americans support raising the minimum wage to over $10 per hour, including a majority of Republicans and 64 percent of Independents.
A bill proposed by Senator Tom Harkin (D-IA) would raise the wage to $9.80 an hour, set the tipped wage at 70 percent of the minimum wage and index both to inflation. In the House, Representative Donna Edwards (D-MD) introduced a bill increasing the tipped wage to 70 percent of the minimum wage too. Finally, on Wednesday, Congressman Jesse Jackson, Jr. (D-IL) introduced the “Catching up to 1968 Act of 2012,” raising the minimum wage to $10 an hour and also setting the tipped wage to 70 percent of the federal standard. If the Harkin bill were passed, for example, an estimated 28 million workers would receive a raise—54 percent of those who would benefit are women and 54 percent work full-time. Contrary to prevalent myths, only 12 percent of those who would see their incomes rise are teenagers and only 15 percent work fewer than twenty hours per week.
While there is little hope that any of these bills would pass a Republican House or overcome a Senate filibuster, Democrats should work to force a vote.
“Everyone in the House and Senate should have to take a stand on this issue,” Temple says. “It’s just an overwhelmingly popular issue.”
In the meantime, there is real action at the state level. Eighteen states and the District of Columbia have raised their minimum wages above the federal level, and ten automatically increase it to keep pace with inflation. Seven states have a higher minimum wage for tipped workers than the federal standard, and the poverty rate for servers in those states is 30 percent lower (13.6 percent compared to 19.4 percent).
The New York Assembly passed a bill to raise the minimum wage to $8.50, but it’s stuck in the Republican-controlled Senate despite polls showing overwhelming bipartisan support. Governor Andrew Cuomo has said that he supports the increase in principle but doubts it can clear the Senate. But the fact is that according to New York State labor law, Governor Cuomo actually has the authority to raise the minimum wage on his own by issuing a “wage order”—no further action by the state legislature would be required.
“This is shaping up to be a real showdown between a popular mandate and the role of money in politics—a popular mandate versus lobbyists from the retail industry, the Chamber of Commerce and the restaurant industry,” says Temple. “But at the end of the day, if the Senate won’t step up, Governor Cuomo could deliver if he wants to. This is his issue to win.”
Raising the minimum wage is a key part of any serious strategy to reduce poverty in America. In fact, all the way back in 2007 the Urban Institute found that raising the minimum wage, along with improvements to the Earned Income Tax Credit, Child Tax Credit and childcare assistance could reduce poverty by 26 percent. A commitment to creating opportunities for poor families means a commitment to raising sub-poverty wages.
“There is nothing inevitable about today’s low-wage economy,” says Temple. “But if we don’t maintain the value of the minimum wage, we shouldn’t expect anything different in the century ahead.”
Follow the Farm Bill
This week, the Senate began consideration of the Farm Bill, and the Food Research and Action Center (FRAC) reports that it could be on the Senate floor for the next two to three weeks. This bill will play a major role in determining funding and rules for the food stamp program (SNAP), and it currently includes a $4.5 billion cut to SNAP over ten years, reducing benefits by $90 per month for an estimated 500,000 households. Since the average SNAP household receives $284 per month ($4.46 per person, per day), the proposed cut is deep and significant.
Fortunately Senator Kirsten Gillibrand has introduced an amendment to remove those proposed cuts. To support that effort, you can contact your senators and tell them you want them to cosponsor Senator Gillibrand’s amendment. You can reach them through the Senate switchboard at 202-224-3121.
The importance of food stamps as an anti-poverty measure can’t be overstated. The program lifted 3.9 million Americans above the poverty line in 2010, including 1.7 million children and 280,000 seniors. The average beneficiary household has an income of only 57 percent of the federal poverty line (so about $9,900 for a family of three), and 84 percent of all benefits go to households with a child, senior or disabled person. It’s also worth noting that USDA research indicates that every dollar of SNAP benefits generates $1.79 in economic activity.
California’s Democratic State Senators have written to their state’s Congressional delegation, to Senate majority leader Harry Reid and to House Speaker John Boehner, urging them “to strengthen, not weaken, our nation’s nutrition safety net.”
“SNAP helps prevent hunger in nearly 4 million people in our state and California Senators couldn’t just stay silent as the US Congress considers making cuts,” California Senate majority leader Ellen Corbett told me.
Sanders and Cummings Legislation Confronts Dental Crisis
Earlier this year I interviewed Senator Bernie Sanders about the dental care crisis in America—one in which 47 million people live in areas where it’s difficult to access care, 17 million low-income children are not seeing a dentist every year and one-fourth of US adults over age 65 are missing all of their teeth. At the time of our interview, Senator Sanders promised bold legislation to confront that crisis, and yesterday he and Maryland Democratic Congressman Elijah Cummings made good on that pledge.
The legislation in the Senate and House would expand comprehensive dental coverage through Medicare, Medicaid and the Department of Veterans Affairs, and it would increase access to dental services at community health centers and boost support for mobile clinics and dental clinics in schools. It would address the shortage of providers by expanding the National Health Services Corps scholarship program and also train “dental therapists” who can perform some routine procedures that are currently offered only by dentists.
From a poverty perspective, lack of dental care can impede a person’s ability to obtain a good job as well as a child’s attendance and performance in school. From an economic perspective, preventative care is far cheaper than eventual treatment in the ER.
Expect stiff opposition from the American Dental Association. This is a good one to tell your senators and representative to cosponsor.
The Philadelphia School has proposed laying off almost 30 percent of school staff from 2011 levels—including 2,700 service workers, almost 1,500 teachers and 1,600 support staff that include nurses, secretaries and counselors. Help Protect those Jobs.
The North Carolina Community Action Association invites you to take the Face to Face With Poverty Challenge and join them for a Poverty Simulation exercise on Thursday, June 14, from 1 pm to 5 pm. This training event provides a window into the lives of North Carolina’s low-income families and the struggles they face to overcome barriers of joblessness, homelessness, crime, illiteracy and the lack of quality childcare.
US poverty (less than $22,314 for a family of four): 46 million people, 15.1 percent of population.
Number of poor children receiving cash aid: one in five.
Poverty rate for people in female-headed families: 42 percent.
Single mothers with incomes under $25,000: 50 percent.
Single mothers working: 67 percent.
Deep poverty (less than $11,157 for a family of four): 20.5 million people, 6.7 percent of population. Up from 12.6 million in 2000.
Increase in deep poverty, 1976-2010: doubled—3.3 percent of population to 6.7 percent.
Americans with no income other than food stamps: 6 million, 2 percent of population.
Twice the poverty level (less than $44,628 for a family of four): 103 million people, roughly 1 in 3 Americans.
Families receiving cash assistance, 1996: 68 of every 100 families with children living in poverty.
Families receiving cash assistance, 2010: 27 of every 100 families with children living in poverty.
Impact of public policy, 2010: without government assistance, poverty would have been twice as high—nearly 30 percent of population.
Quote of the Week
I am paid so little that I have to work two jobs just to make sure my family has what they need. I’m only able to see my two kids about an hour a day. We spoke up for a better life and now they’re violating our rights.
— Cirilo Solo, janitor in Houston who works for Pritchard