Mayor's $15 minimum wage plan earns support of low wage workers

Working Washington expresses support for Mayor Murray's $15 minimum wage plan

“This is a $15 minimum wage plan that works for workers, and for the entire city"

On behalf of the fast-food workers whose strikes, marches, boycotts, and other mobilizations brought the call for $15 an hour to the center of public debate, Working Washington issues the following statement in support of the Mayor's plan to achieve a true $15 minimum wage for all workers:

This is a $15 minimum wage plan that works for workers, and for the entire city.

Representatives of working people, businesses, nonprofits, and other diverse community leaders have come together on a recommendation that reaches a true $15 minimum wage for all workers, helps independent businesses & nonprofits thrive, and includes robust community-based enforcement.

It's an incredible accomplishment.

On May 30th of last year, Seattle fast food workers went on strike for $15 because they knew that raising pay was necessary — even if in those first days it might not have seemed possible we could get there. But their leadership and commitment helped spark an extraordinary grassroots workers' movement that rapidly built support across the entire city. Less than a year later, we are on the verge of achieving a $15 minimum wage that ensures every worker in Seattle can support themselves, afford the basics, and contribute to the economy.

Fast food workers led the way forward, and the city has heard their call. 

"What matters most to me is my 4 year old daughter, Canaela," said Julia DePape, a Seattle McDonald's worker with Working Washington. "My dream is to give her the same opportunities as other children. For starters, I want to provide a stable home for her and I want to give her a space to call her own. Also, Canaela loves cats and dogs and probably any other animal she'd meet. I dream of taking her to the zoo for the first time because I can only imagine how her face would light up. With $15, I have a chance at that!"

Now that Mayor Murray has achieved broad agreement on a plan that makes a true $15 minimum wage a reality for all Seattle workers, we look forward to working with City Council to move forward and put these recommendations into law.

Highlights:

The Mayor's plan raises up 100,000 low-wage workers, lifting our entire city:

  • Everyone who works at a big business like McDonald's or Lowe's and doesn’t receive healthcare through their job will see their minimum wage rise to $15/hour by January 1, 2017. The $15/hour minimum will increase with inflation every year after that; this rate sets the standard for all workers.
  • Every low-wage worker in the city will see a significant increase to their base wage each year as they get to $15/hour, and then to parity with the citywide minimum
  • Every worker gets to the same place: a true inflation-adjusted $15 minimum wage — with no deductions for tips or benefits. At current rates of inflation, the citywide minimum for all workers will reach about $18.13/hour in ten years.
  • Every worker will benefit from a robust system of community-based enforcement that ensures the $15 minimum wage, sick leave, wage theft, and other labor standards are realities for every worker in Seattle.

Frequently Asked Questions about the “Fight for $15”

1. Does higher pay mean fewer jobs? No. According to numerous studies, raising the minimum wage shows little negative impact on the number of jobs[1]. This may surprise you if you’re used to trickle-down economics, but the data shows that when wages are raised in a broad manner the workers use that increase in wages to increase demand for consumer goods.

Nick Hanauer, a multi-millionaire venture capitalist, wrote about the need to raise the minimum wage to $15 an hour in Bloomberg.

“Raising the minimum wage to $15 an hour would inject about $450 billion into the economy each year. That would give more purchasing power to millions of poor and lower-middle-class Americans, and would stimulate buying, production and hiring.

Raising the earnings of all American workers would provide all businesses with more customers with more to spend.[2]

 

2. These jobs are supposed to be stepping stones, not careers.

The economy has changed and the fastest growing jobs are fast food and service jobs that pay poverty wages[3]. Regardless of what you think these jobs are “meant to be,” the people working these jobs deserve better than poverty wages and they should have the right to organize without retaliation.

Even though Washington State has the highest state minimum wage in the country, you can’t afford to support yourself on $9 and change — let alone put money aside to reach out to a better future.

 

3. I worked my way up why can’t they?

These fast food and service jobs are the fastest growing jobs, and they offer few opportunities. Almost 90% of jobs in fast food are front-line poverty-wage jobs[4], so it’s simply not possible for most people to “work their way up” in the field. And despite the fairytales about starting out on the fryer and eventually owning a franchise, the cost of opening a fast-food outlet is incredibly high[5], and far out of reach for a minimum-wage employee:

For example, if you aspire to open a McDonald’s outlet:

To be considered for a franchise, a minimum of $750,000 of personal funds is normally required. This amount has to be yours – it can't be borrowed, such as by way of a credit line.

A prospective franchisee must put at least 25% cash as a down payment toward the total cost of purchasing an existing restaurant. The remainder can be financed, but for a maximum of seven years. For a new restaurant, McDonald's requires 40% of the entire cost of the store be paid in cash at the outset.

Equipment and pre-opening costs for a new store generally run from $959,450 to $2.11 million.

Franchisees pay a service fee based on the restaurant’s sales. Currently, that's set at 4% of monthly sales, along with rent that's due.

In order to open a new restaurant, a $45,000 initial franchise fee is paid to McDonald's.

 

The numbers for Burger King are similar:

The total investment needed to begin operating a restaurant will range from around $316,100 to $2.66 million.

Starting costs include a $50,000 initial franchise fee (it can be less when the term of the franchise agreement is under 20 years).

To qualify as a franchisee, you need net worth of $1.5 million and $500,000 in liquid assets.

Royalties are currently a monthly fee of 4.5% of gross sales.A monthly advertising contribution of 4% of gross sales is also collected by the corporate parent.

 

And Wendy’s?:

Getting in on Wendy's (WEN), which is selling more of its company-owned stores to franchisees, is extremely difficult. Currently, it's only accepting applications for prospective franchisees who want and can afford to open or buy multiple stores. Applications aren't being taken for single new restaurant owners. (Large operators aren't uncommon in the restaurant industry. One of the biggest, NPC International, owns more than 1,000 restaurants, including Wendy's stores.)

You must have net worth of at least $5 million. This could include liquid assets, retirement accounts or real estate, among other holdings.

Liquid assets of at least $2 million are required.

 

4. Giving people better pay in these jobs would make them give up their dreams.

When workers earn more money they can afford to go back to school, put money away and plan for their future. Getting livable wages frees them from the paycheck to paycheck mentality and lets them have a path to move towards their dreams.

 

5. Won’t this drive business out of our city/county/state?

All signs point to no. Minimum wages already vary from state to state by as much as $2 an hour and businesses don’t decide which state they will operate in solely on the basis of the wage differences. In fact, the dollar menu costs the same $1 in states that have a $7.25 minimum wage as it does here in Washington.

Here in Washington State there are fast food outlets right on the border with Idaho. Idaho has a much lower minimum wage of $7.25, compared to the $9.19 in Washington State, yet a McDonald’s franchisee recently told KPLU radio he didn’t even consider moving his restaurant 20 feet across the street into Idaho when he rebuilt recently[6].  Why? He had a good location that generated strong demand.

Another local example would be in Vancouver, WA where due to our state’s sales tax, prices are about 9% higher than they would be in Oregon. Not to mention the minimum wage is higher in Washington State. Yet, plenty of fast food outlets make Vancouver their home, instead of the lower cost state right across the river.  Why? Because there’s demand for fast food close to home in Vancouver.

There are numerous elements that make a business succeed or fail. Labor costs are one factor, but only one. Businesses will locate where there is enough demand to operate successfully, and higher wages increase demand[7].

Here’s another example. In 2007 the minimum wage in Washington was 54% higher than nearby Idaho, and the usual suspects all said it would mean doom for small businesses. The New York Times reported on what really happened:

“Nearly a decade ago, when voters in Washington approved a measure that would give the state’s lowest-paid workers a raise nearly every year, many business leaders predicted that small towns on this side of the state line would suffer.

But instead of shriveling up, small-business owners in Washington say they have prospered far beyond their expectations. In fact, as a significant increase in the national minimum wage heads toward law, businesses here at the dividing line between two economies — a real-life laboratory for the debate — have found that raising prices to compensate for higher wages does not necessarily lead to losses in jobs and profits."[8]

This is all evidence backing up a study on the effect of minimum wage increases on restaurant employment:

Bill Lester of the University of North Carolina-Chapel Hill was on the team that looked at 16 years worth of restaurant employment data for 316 pairs of border counties.

“And when you add up all those comparisons and look at the average of all those differences in employment, the difference is zero,” said Lester.

Or, to put it another way: When the minimum wage increases, said Lester,“On aggregate, there's no job losses.”

 

6. The minimum wage wasn’t meant to be a living wage, right?

The fastest growing jobs pay poverty wages. A majority of the jobs created since the recession, 58% are low paying jobs[9]. Like it or not, these are the jobs that are being created. If we want to kick start this economy, we need to make sure people are paid enough so they can support themselves, afford the basics, and spend money.

 

7. Won’t raising the wages raise the prices?

Let’s get beyond cartoon economics here. Pricing depends on a lot of factors besides labor costs, including rent, demand, turnover, efficiency, food costs, and consumers’ willingness to pay.

That’s why a recent study by Federal Reserve economists has estimated that for every 10% increase in wages, about a 1% increase in costs could be passed on to the consumer. That means a 60% wage increase could increase prices by a measly 6%.[10]

So even if despite their billions in profits, McDonald’s decided to pass on the whole increase to consumers, a Big Mac could go from the average price of $4.56 to a whopping $4.81. Not such a big deal.

And that’s a worst case scenario. Recent studies have actually calculated that raising the minimum wage would drive up demand for consumer goods as workers who are on the lower end of wages tend to spend more of the money they receive as increased wages[11].

Also, the minimum wage across the United States varies from state to state sometimes by as much as $2, but the prices of everyday items is virtually the same[12].

 

8. Fast food jobs aren’t meant to be good jobs.

Regardless of what you think a job is “meant” to be, these are the jobs that people have. Fast food workers are almost all adults with bills to pay, and many of them have families to support[13].

These are not jobs for pocket change or summer spending money. These are jobs that people are tying to support themselves on.

 

9. Robots will take away your jobs, then you’ll be sorry.

Michael Reich, coauthor of a study by the National Employment Law Project told Slate Magazine,

“Technology has been increasing restaurant productivity for some time—think of computerized ordering of supplies, Open Table and Yelp and electronic ovens—but that has not translated into lower employment in the aggregate. Indeed, employment in restaurants has been growing along with the use of technology[14].”

The facts of the matter are that these poverty wage jobs are the fastest growing jobs in our economy. Thousands of low paying jobs were created here in Washington State during the recovery and fear of far off, potential robot overlords should not be an excuse to keep worker pay so low they cannot afford their basic needs.

 

10. Where did the number $15 come from anyway? Why not $25 or $100?

$15 is a number that reflects a wage that will allow a person to pay their bills and obligations and still have some money left over to plan for their future. It works out to be around $30,000/year, a decent wage that sits right at about half of the median income level in the Seattle area[15].

$9.19 is obviously not enough and $100 is obviously a joke — you can’t support yourself on the current minimum, and of course you can’t set the minimum above the median income.  So the answer is somewhere in between — and we think $15 is a good place to start.

In Seattle, for a full-time worker to afford a studio apartment using 33% of their income (the recommended amount to spend on housing) they would need to be paid about $15/hour. For a 1-bedroom? More than $21.

That’s why we think $15 an hour is a modest start that will have a real, positive effect on workers. This movement is about workers getting paid a decent, living wage and the community pushing for a much needed economic boost. When low wage earners are paid more, they go out and spend it. The money is pushed out into the community lifting everyone up. That’s basic fairness and economic stimulus.


[1] http://www.igmchicago.org/igm-economic-experts-panel/poll-results?SurveyID=SV_br0IEq5a9E77NMV

[2] http://www.bloomberg.com/news/2013-06-19/the-capitalist-s-case-for-a-15-minimum-wage.html

[3] http://www.nelp.org/page/-/Job_Creation/LowWageRecovery2012.pdf?nocdn=1

[4] http://www.huffingtonpost.com/2013/07/25/fast-food-industry-mobility-_n_3645415.html

[5] http://finance.yahoo.com/news/what-it-takes-to-start-a-fast-food-franchise-222831956.html

[6] http://www.kplu.org/post/why-wont-mcdonalds-move-20-feet-lower-wage-idaho

[7] http://www.nytimes.com/2007/01/11/us/11minimum.html?pagewanted=all&_r=0

[8] http://www.nytimes.com/2007/01/11/us/11minimum.html?pagewanted=all&_r=0

[9] http://www.nelp.org/index.php/content/content_about_us/tracking_the_recovery_after_the_great_recession

[10] http://www.epionline.org/studies/aaronson_06-2006.pdf

[11] http://www.chicagofed.org/digital_assets/publications/working_papers/2007/wp2007_23.pdf

[12] http://www.nytimes.com/2007/01/11/us/11minimum.html?hp&ex=1168578000&en=bf304392cdc5baf4&ei=5094&partner=homepage&_r=0

[13] http://www.cleveland.com/business/index.ssf/2013/08/fast-food_workers_more_often_a.html

[14] http://motherboard.vice.com/blog/relax-a-minimum-wage-hike-wont-bring-on-the-robot-overlords

[15] http://www.kingcounty.gov/exec/PSB/BenchmarkProgram/Economy/EC02_Income.aspx

State fines Alaska Airlines contractor for failing to protect workers from exposure to blood borne pathogens, body fluids

  **FOR IMMEDIATE RELEASE***

Contacts: Thea Levkovitz, Thea@workingwa.org

State fines Alaska Airlines contractor for failing to protect workers from exposure to blood borne pathogens, body fluids

 Serious health and safety violations for Alaska’s passenger services contractor at Sea-Tac Airport

 

SeaTac Airport - April 18, 2013 -  The Washington State Department of Labor and Industries  (L&I) has fined Alaska Airlines-contractor Bags, Inc. for failing to protect workers from exposure to blood borne pathogens and body fluids including vomit, urine, feces and blood. In issuing more than $12,000 in fines, L&I cited the Alaska contractor for four serious violations of state health and safety laws, and two general violations. Under state law, “serious violations” are issued when “there is a substantial probability that death or serious physical harm could result” if the problem is not fixed.

The L&I investigation was prompted last fall when more than 50 Sea-Tac Airport workers, including 17 wheelchair assistants at Bags, Inc., filed health and safety complaints. The wheel chair agents employed by Bags, Inc. provide services to the disabled, ill and elderly passengers of Alaska Airlines and Delta Airlines.

L&I investigators found that the contractor:

●       Failed to develop an exposure plan for “wheel chair agents and supervisors who may be occupationally exposed to blood borne pathogens or other potentially infectious materials.”

●       Failed to have a safety plan for workers “handling passengers and wheel chairs that have been or may be contaminated with body fluids such as vomit, urine and feces.”

●       Failed to make hepatitis B vaccinations available to employees “who may occasionally come into contact with bleeding passengers or surfaces contaminated with blood” or other body fluids.

●       Failed to provide training so workers can protect themselves from HIV and other infections.

●       Failed to provide employees information about how to use personal protective equipment to handle body fluids, and how and where to dispose of contaminated equipment and materials.

 

Press availability:

When: Thursday, April 18 - 10:30 AM

Where: Airport Arrivals Hall - south end of baggage claim (lower) level

Who: Bags, Inc. workers, faith and community leaders

Click L&I Citation and Notice of Assessment to see the full L&I citation notice.

In filing the complaint last fall with L&I, workers noted that the conditions were unsafe for passengers as well. “I have had passengers urinate and defecate in the wheelchair I use to transport them,” wrote one Bags, Inc. worker. “When this happened I had to go to the nearest restroom and improvise a solution with napkins and bathroom soap. We don’t have any equipment issued to us by Bags, Inc. to protect us and our clients in this kind of situation. After these incidents, I have had to continue to use the same chair that had been soiled to pick up more passengers. We don’t have anything to do a deep clean of the chairs beyond hand soap, and so have to just go for the next person.”

“I'm glad that my coworkers and I have been vindicated,” said Habiba Ali, who has worked at Bags, Inc. for one year.  “We're proud to serve Alaska and other customers but have been concerned about the unsafe conditions for a long time. Now, we hope that Alaska and BAGS take our issues seriously so that we can have a safe workplace and our customers can have clean wheelchairs when they come to our airport.”

L&I investigation continues into Alaska Airlines, 3 other contractors at Sea-Tac

Meanwhile, L&I continues to investigate worker complaints of  health and safety violations at Alaska Airlines’  cabin cleaning contractor, Delta Global Staffing, and its fueling contractor, ASIG. L&I also has opened an investigation into potential health and safety violations at Alaska Airlines. Additionally, worker complaints have led to an investigation at a 5th Sea-Tac company, AirServ, a contractor for several airlines.

Media availability to speak with workers, community supporters for a healthy airport and good jobs

Bags, Inc. workers and faith and community supporters will be available to speak to media directly on Thursday morning, April 18. Workers, their union representatives and faith and community supporters will gather at the airport’s Arrivals Hall and will engage in free-speech activities to alert other airport employees and concerned citizens about the health and safety problems, along with the problems of poverty wages at airline contractors.

 

Following are actual complaints submitted to Washington State Department of Labor and Industries on December 10, 2012 by workers who help elderly and disabled passengers move through the airport employed by Alaska Airline contractor Bags, Inc.  They charged serious health and safety violations, including:

Unsafe procedures for handling bodily fluids

“A year ago a woman urinated and defecated in my chair.  Since I had no gloves and cleaning supplies I again could only respond with paper towels and hand soap.  Not only is there no equipment provided, but there is no procedure from management on what to do in that kind of situation.  There is no training, advice, or direction for dealing with a soiled chair.  After these incidents, I had to continue to use the same chair that had been soiled to clean pick up more passengers.  We don’t have anything to do a deep clean of the chairs with beyond hand soap, and so have to just go for the next person. “

“On an International flight I had a bleeding passenger. I was to pick up the passenger and wait with her until she cleared customs. It was an elderly woman and I asked when she got in my chair if she needs to use the restroom. When she got up from my chair I noticed her bottom was soaked in blood. I had no gloves but I took napkins and placed them on the chair. There was so much blood that it soaked into the chair and was dripping onto the floor. I didn’t know what to do. When she left I took the chair to storage to change it. The chairs are issued to you and whatever happens to the chair is your responsibility. Nobody cleans the chairs.”

 Insufficient training on passenger safety

“I have been at the airport for 12 years. During that time I have encountered a few medical emergencies with my passengers. Because I hadn’t been trained on how to manage this circumstance or deal with the disabled, I am left to guess for myself.”

" I have not been provided training by BAGS on how to lift heavy bags or how to transport a passenger in or out of the chair."

Lack of personal protective equipment

“I don’t have gloves. If there is a spill or an incident with a customer, then I don’t have any materials provided to help me respond to it.”

“I have no gloves, masks, or any other safety tool to deal with an incident involving bodily fluids.”

For additional information:   www.itsOURairport.org

 

Working Washington, a Washington based non-profit coalition of individuals, neighborhood associations, immigrant groups, civil rights organizations, people of faith, and labor united for good jobs and a fair economy.

 

Raise. The. Wage.

Corporate profits are booming —so why are so many jobs paying poverty wages? And get this, some politicians have actually proposed to CUT minimum wage. Seriously. Sign here to tell politicians we need to raise the wage. Jobs should create opportunity, not poverty.

handmoneyangled1When our jobs don’t pay enough to support basic spending levels, it stalls our economy, causing others to lose hours, wages and shifts. When workers are struggling just to make ends meet, it hurts our families, and our communities suffer. We need to raise the wage to boost the economy — study after study proves just that.

The Economic Policy Institute, an economic think tank, has just released a new report which found that when you raise the minimum wage it immediately gives an economic jump-start to the folks who need it most. When all of us are paid decent wages we can make a better go at it. We can put food on the table, pay bills, shop for new toys, go out to eat — putting money right back into our community.

It’s a virtuous cycle. All of us need a boost. It’s time to tell the politicians that corporations need to pay living wage.