Poverty Wages in the Land of Plenty

December 5, 2013 | | The Guardian |

The holiday season is upon us. Sadly, the big retailers are Scrooges when it comes to paying their workers. Undergirding the sale prices is an army of workers earning the minimum wage or a fraction above it, living check to check on their meager pay and benefits. The dark secret that the retail giants like Walmart don't want you to know is that many of these workers subsist below the poverty line, and rely on programs like food stamps and Medicaid just to get by. This holiday season, though, low-wage workers from Walmart to fast-food restaurants are standing up and fighting back.

"Walmart was put in an uncomfortable spotlight on what should be the happiest day of the year for the retailer," Josh Eidelson told me, reporting on the coordinated Black Friday protests. "These were the largest protests we've seen against Walmart ... you had 1,500 stores involved; you had over a hundred people arrested." Wal-Mart is the world's largest retailer, with 2.2 million employees, 1.3 million of whom are in the US. It reported close to $120bn in gross profit for 2012. Just six members of the Walton family, whose patriarch, Sam Walton, founded the retail giant, have amassed an estimated combined fortune of between $115bn to $144bn. These six individuals have more wealth than the combined financial assets of the poorest 40% of the US population. [...]

The public policy think tank Demos issued a report, "A Higher Wage is Possible: How Walmart Can Invest in Its Workforce Without Costing Customers a Dime" (pdf). Demos analyzed a growing demand from the Walmart worker movement for a guaranteed base salary for full-time workers of $25,000 per year. "We found talking to Walmart workers over and over again that their wages give them just enough to meet their basic needs, and at the end of every month, they're making critical trade-off decisions," Catherine Ruetschlin, one of the report's co-authors, told us. "Determining whether they're going to get medicine or pay their school fees or put food on the table or keep their electricity on." The report explains that "if Walmart redirected the $7.6bn it spends annually on repurchases of its own company stock, these funds could be used to give Walmart's low-paid workers a raise of $5.83 an hour," meeting the salary goal of the workers. 

Parallel to the Walmart campaign is a drive for higher wages in the fast-food industry. In more than 100 cities, workers are organizing protests and strikes ... and winning. In SeaTac, the Washington state municipality where the Seattle-Tacoma Airport is located, voters approved a local minimum wage of $15 an hour. As with Walmart workers, fast-food giants like McDonald's and Yum Brands (which owns KFC and Taco Bell) all feast from the public trough: their workers, earning poverty wages, depend on public-assistance programs like food stamps and Medicaid, while their enormous CEO benefit packages qualify for corporate tax deductions, as reported by the Institute for Policy Studies this week.