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What would a $15 minimum wage mean to the economy?
National effort plays out in Chicago too
Originally Posted by the Chicago Tribune
August 02, 2013
By Alejandra Cancino, Mugambi Mutegi and Gregory Karp, Chicago Tribune reporters
A national push to raise employee wages at restaurants, supermarkets and elsewhere to as high as $15 per hour pits labor organizers against business owners in an emotional debate about economics and the cost of living.
Not directly included in the discussion is an important constituency: the customers. If they support the idea of an increased minimum wage, they will likely see higher prices for hamburgers, clothes and other goods.
Economists and others who study consumer behavior say that shoppers may react sympathetically to the call for higher pay for workers in the service industry who struggle to make ends meet, but in the end they will take care of their own needs.
“I would pay a couple of dollars more for products, but the question then is, do I get a raise too? If my salary goes up, I will be willing to pay even more for my products,” R.B. Barrett, 45, said outside a Whole Foods store in the Lakeview neighborhood where about 100 people chanted and passed out fliers Wednesday outlining their demands: $15-per-hour wages and better working conditions.
Business groups say significant wage increases would require many of their members to lay off workers and pass on costs to consumers. Some argue that doubling wages, combined with the increased employer costs for the national Affordable Care Act, could put their members out of business.
“You can’t isolate just the cost of a sandwich at a restaurant,” said Scott DeFife, executive vice president of policy and government affairs at the National Restaurant Association. “Lifting the minimum wage in that manner, to that degree, increases pressure on all of the other industries around it.”
On Wednesday and Thursday, protests were held in Chicago as part of a nationwide movement of organized events that included demonstrations in New York, Detroit and Milwaukee. Many who protested here earn an hourly wage around the state’s minimum of $8.25, which would translate into an annual salary of about $17,000. A raise to $15 per hour would mean a salary of $31,200.
In Chicago, the demonstrations were run by the Workers Organizing Committee of Chicago, a recently formed union backed by local labor groups, including Arise Chicago, the Chicago Teachers Union and local affiliates of the Service Employees International Union.
The workers’ push for higher wages comes as the nation has yet to create all the jobs lost during the recession. There are nearly 12 million people unemployed still looking for a job. Economists say many thousands more have given up hope.
The high unemployment seen in the aftermath of the Great Recession is hurting wages across the board, said Heidi Shierholz, a labor economist with the Economic Policy Institute, a labor-oriented think tank based in Washington.
“There is a very tight link between high unemployment and low-wage growth. It’s just as simple as if your employer knows you don’t have any outside options. They don’t have to pay you wage increases to keep you,” Shierholz said. Those earning the lowest wages, she added, have been hurt the most.
Before the 1970s, wages for most workers grew at about the same rate as productivity, but globalization, politics and economic policy broke that relationship, Shierholz said.
The minimum wage also followed that trend, and if it had continued, she added, the federal minimum wage today would be closer to $18 per hour instead of $7.25. That doesn’t mean that the economy could handle doubling the minimum wage overnight, but it could start increasing slowly, she said.
“This campaign underscores that the wages for the whole bottom swath of the wage distribution are just too low,” Shierholz said.
Lorraine Chavez, a spokeswoman for the Workers Organizing Committee union, said the goal is not to double wages overnight. Workers also want better working conditions and full-time employment. And the union is prepared to continue to strike and plan other events until they reach all those goals.
“Workers have no choice,” Chavez said, adding that at $8.25 per hour, many workers qualify for food stamps and can’t afford to pay rent.
While consumers say they empathize with the struggle, for the many whose wages have stagnated and don’t feel confident about the future, price trumps making a moral or ethical purchase.
“There is a big competition inside every consumer’s mind between really wanting to do something that would help other people and really wanting to save money,” said Kit Yarrow, a professor at Golden Gate University in San Francisco who specializes in consumer psychology.
Yarrow said consumers would likely choose to support a noble cause once or twice, but ultimately personal financial security would win. That’s partly because while consumers feel safe now that the recession is over, they don’t feel OK about the future.
“I think the wound was so deep and so great during the recession and so frightening that it made people kind of permanently a little bit more cautious about spending,” Yarrow said.
No Act of God Caused Chicago Schools to Close
Two articles in yesterday’s Chicago Tribune provided a revealing, if unintended reminder of the injustices lying at the heart of America’s public schools. At New Trier High School in one of the wealthier suburbs of Chicago, all students will have iPads for their course work by the Fall of 2014. The district will pay about 40% of the costs, leaving families to come up with the remaining $350 in purchase or leasing options. School officials justify this by touting the educational benefits and by pointing out that this will allow the school to phase out some of its 1200 laptops. One page away is an article about the school board of the City of Chicago which voted yesterday afternoon to close 50 public elementary schools. In thousands of districts like New Trier, students are getting iPads; in Chicago, New York, Philadelphia, and many other places, students are getting moving orders and teachers are losing jobs.
Later on in the same paper The Tribune revealed its editorial bias, offering Mayor Rahm Emmanuel space to justify the closings, while devoting its editorial to a cynical and shameful attack on Chicago teachers. Praising the “heroic” teachers who saved lives in Moore, Oklahoma, The Tribune called on teachers in Chicago to abandon their protest against the massive school closings and become “heroes” by obediently implementing the policies of the Chicago Public School Board and its leader, the Mayor. Excuse me! Chicago Public School teachers are already heroes. They don’t need the condescension of The Tribune. And they don’t need to be unjustly demeaned as less worthy than teachers in Moore. Today they need our gratitude for speaking the truth about the nature and impact of these school closings.
Unlike the teachers in Moore, Chicago teachers’ schools are not gone because of some capricious act of nature. They are gone because of decades of very deliberate decisions by public officials, corporate interests and ordinary citizens that have eviscerated the neighborhoods of Chicago, displacing people with the demolition of public housing, gutting communities with foreclosures and the elimination of jobs. The schools are gone because they have been replaced by charter schools, the darlings of politically well-connected school reformers making a profit on tax money while public officials eliminate the inconvenience of teachers unions. The schools are gone because poor African Americans and Hispanics in Chicago are disenfranchised by school governance that is appointed by the mayor with limited accountability to the communities. The schools are gone because public funding in this country remains tied to real estate taxes that benefit wealthy suburbs at the expense of the urban core. The schools are gone because years of school reforms imposed from the latest outside savior have left front line teachers abused and demoralized and their students underachieving. And the schools are gone because white flight that began decades ago has left the cities brown and black and poor.
Who makes decisions about public schools today? The President who attended the prestigious Punahou private school in Hawaii and who sends his daughters to the University of Chicago Laboratory School and the Sidwell Friends School in Washington. The Secretary of Education who attended the same Lab School in Chicago. An appointed school board whose membership until recently included billionaire Penny Pritzker, now the appointee to be Secretary of Commerce. She attended the Castilleja School in Palo Alto where 415 girls in grades six to twelve enjoy the attention of 70 full and part time faculty members. In Chicago that school would be deemed “underutilized.” And where do the Mayor’s kids go to school? No threats from school closings for them. They, too, are at the University of Chicago Lab School. These powerful gurus of public school reform didn’t go to public schools and don’t send their children to public schools. They benefited from the growing educational apartheid in this country and they participate in it today.
I don’t suggest that these policy makers sat down and said, “Let’s close the schools of poor Black and Hispanic kids in Chicago and make sure that New Trier kids have iPads.” But here are the facts: The schools closed today in Chicago are 88% black, 10 % Hispanic, and 94% low income. And next year the kids in New Trier will all have new iPads. Almost 60 years after Brown v. Board of Education our schools are more and more separate, and more and more unequal.
Please don’t tell me that this is a complex issue, that there are no good solutions, that anguished appointed school board members merely did what they had to do given the economic circumstances. I’ve read the reports. I’ve seen the studies. I’ve talked to experts. I can tell you what the real story is about charter school performance. I think I have made a pretty good effort to understand what’s going on. Whatever the specifics, this is about race and poverty and antipathy to unions and political influence and public indifference (how telling that for a time yesterday morning while the Board was deliberating on its closure vote, the lead online story for The Tribune was Bear’s football hero Brian Urlacher’s retirement announcement).
I have no doubt that the Chicago school teachers will do as much to protect their children this September navigating new routes to schools across dangerous gang lines as the teachers in Moore did for their students when the tornado came earlier this week. They don’t need editorial writers to tell them to do that. But when their students ask them why their school is gone, just as students in Moore are no doubt asking right now, Chicago teachers won’t have a changing and dangerous climate or the proverbial “act of God” to point to. Their answers will be equally sad, but far more sinister.
-Rev. John Thomas serves on the Arise Chicago Board of Directors
Originally posted on the John Thomas blog on the Chicago Theological Seminary website.
Re-posted with permission.
Chicago ordinance passes committee, heads to city council; would revoke licenses of wage-stealing employers, protect vulnerable workers and defend ethical businesses
If passed, the ordinance would be one of the strongest municipal anti-wage theft laws in U.S., and the second of its kind nationally.
The proposed legislation passed the Committee on License and Consumer Protection this week, and workers’ rights advocates expect the anti-wage theft measure to pass the City Council in it’s next meeting Thursday, January 17th. The ordinance would protect workers and defend ethical businesses against unscrupulous employers who steal workers’ wages and create unfair competition. It would be one of the strongest municipal anti-wage theft laws and the second of its kind in the United States.
Wage theft is a major crisis in Chicago, with an estimated $7.3 million of workers’ wages stolen by their employers every week in Cook County, according to research conducted by the Center for Urban Economic Development. It is an issue that disproportionately harms the most vulnerable of workers: immigrants are 1.5 times more likely than native-born workers to have their wages stolen, and African Americans are 27 times more likely to have their wages stolen than their white counterparts.
The ordinance is supported by Arise Chicago and other key workers’ rights community organizations including the Chicago Workers’ Collaborative, Centro de Trabajadores Unidos/Immigrant Workers’ Project, Latino Union, and the Restaurant Opportunities Center—Chicago, who are dedicated to fighting wage theft and other forms of worker exploitation.
Check out a year in review–highlights from our work in 2012 in our most recent newsletter.
University of Illinois researchers say wage-and-hour violations are the rule, not the exception. — WBEZ 9.15
Check out Crain’s coverage of the new report detailing abusive conditions in Chicago’s Carwash Industry!!