7.2 - Minimum Wage, Maximum Problems

Mindy, six months pregnant, worked the 6 A.M. through 2 P.M. shift as a waitress. It was so busy that on many days she didn’t get a chance to stop and eat. Sometimes she’d put a plate of French fries out in the kitchen so she could pop one in her mouth as she rushed by to pick up a soda order. She was on her feet for eight hours every day, and by the time Mindy was at the end of her second trimester, she was thoroughly fatigued. At about that time, Mindy almost fainted at work. So she sat down for a moment in the restaurant to pull herself together, and a person at one of her tables didn’t miss a beat, calling out, “Ma’m, we still need our coffee.”

At that time, she and her husband Ruben had three jobs between them—Mindy with one job, and, Ruben, with two. All three jobs were paid minimum wage. Even with tips, making ends meet was a struggle. Mindy worked through most of her first pregnancy at a restaurant in downtown San Francisco. It was a long slender room, almost like a train car, with eleven booths and twenty counter seats. Decorated in red and white, with James Dean and Marilyn Monroe looking down from their spots on the walls, this was a major tourist attraction and had a high traffic flow of people from all over the world stopping in for a bite to eat.

Mindy’s body was getting stressed from the fatigue and her doctor wrote her a note that specified she needed regular breaks. “It was the constant motion and the duration of not getting enough food,” she comments about working through her pregnancy. “And the baby was growing erratically; she wasn’t steadily increasing in size. The doctor said, ‘Your body is stressed and your baby is showing signs of that stress.’ ”

Mindy didn’t have healthcare through her job, but was able to see the doctor because she qualified for health insurance through a state of California low-income insurance program called Access for Infants and Mothers (AIM), “It was pregnancy specific insurance, so I was covered for the entire pregnancy and for two months after giving birth. The baby is covered for the first year of life.”

She found out about this state health insurance program when she went into a clinic for a pregnancy test to confirm the test she took at home. It was a walk-in clinic that she came across on an advertisement on the bathroom wall at work. “The advertisement said, ‘Think you’re pregnant? Come in to get a verification test and find out about your different options,’ ” recalls Mindy, “But we already knew we wanted to keep the baby,” and just wanted to confirm the pregnancy. This clinic helped Mindy apply for the AIM healthcare program and also got her in touch with the WIC office to help with food. WIC is the Special Supplemental Nutrition Program for Women, Infants, and Children, a federal government assistance program that provides nutritious food to qualifying lowincome women, infants, and children up to age five.¹⁰

Without this subsidized help, Mindy and her family wouldn’t have had healthcare coverage, and would have struggled to pay for food with just the earnings from their minimum wage jobs. She was working so hard to keep up with the bills that the fatigue was complicating her pregnancy.

Mindy ended up having to take early maternity leave, and even then had to have an emergency C-section because her amniotic fluid was so low. “Luckily, she’s fine now,” says Mindy who later had to quit her job to care for her own health, as well as to take care of her daughter, then later also for her son. At the time it also made economic sense for Mindy to stay home with their children—childcare costs would have dwarfed her minimum wage salary. “I couldn’t afford childcare while I worked. I just didn’t make enough,” says Mindy. “If there was some type of childcare assistance program through work or the state then I could have worked.”

Losing Mindy’s wages was a big blow. The wages of two parents are often needed to support a family these days. When those wages are not adequate to cover the costs of raising children and other basic needs like housing, heat, utilities, groceries, childcare, clothing, health coverage, and transportation costs, then we have a significant problem. Raising the minimum will better allow families to meet those needs on their own.¹¹

Mindy’s family ended up struggling to make ends meet on just the wages her husband brought in from his two minimum wage jobs. Her situation with one parent making minimum wage to support a family isn’t rare. In fact, “the average minimum wage worker brings home more than half (54 percent) of his or her family’s weekly earnings,” finds the Economic Policy Institute.¹²

One of her husband’s jobs was at a cozy sidewalk café, the kind where BLTs cost $9, and the hamburgers come with freshly cut fruit instead of French fries. There were six or seven outdoor tables, and a small interior with five or six tables on the first floor and a narrow staircase up to a few more tables. The walls were covered with the pictures, sometimes autographed, of famous people who had dined at the restaurant. For an added touch of class, each table had a small vase with a flower. The restaurant shared the street with expensive stores like Giorgio Armani, BCBG, Kenneth Cole, and local upscale boutiques.

The people who worked in the restaurant, however, couldn’t afford to shop at those stores. Ruben, Mindy’s husband, now the sole wage earner in his family of three—nearly four—was struggling to support his family as he brought home minimum wage and tips for his work as a waiter. He also had a second job waiting tables at another restaurant, where he was paid minimum wage as well. At that time, San Francisco was one of the few cities which passed a minimum wage increase within their city limits. The city had a minimum wage of $8.50 per hour,¹³ which is significantly higher than the $5.15 per hour federal minimum wage.¹⁴

In fact, there’s been some movement to raise the minimum wage in cities and states across the country through citizen initiatives, state legislatures, and other elected bodies. Several cities— like San Francisco—have successfully raised the minimum wage within their city limits, and fifteen states have minimum wages that are higher than the federal government’s $5.15 an hour.¹⁵ Florida, with a minimum wage in 2005 of $6.15 per hour, is one of those states.¹⁶ Their minimum wage increase was voted in by citizens who also voted for George Bush for President in 2004. Clearly, this is not a partisan issue.

It’s hard for a family to live on minimum wages. The cost of living is just too high. Contrary to popular belief, the majority of minimum wage earners aren’t single teenagers who need to bring in a little extra for pocket 370, many families struggle with these issues: A report found that 70 percent of workers who would benefit from an increased minimum wage are adults age twenty or older.¹⁷

No, these aren’t just teenagers with summer jobs.

While Ruben was juggling his two jobs, he and Mindy were also raising their daughter, Kennedy, and Mindy became pregnant with their second child. What did living on the minimum wages of one earner (holding two jobs) mean for her family? “We couldn’t buy the groceries we wanted. We were cutting back on fruits and vegetables because they are the most expensive. Actually, we were living mostly on WIC items, like the cheese, eggs, and milk.”

The current federal minimum wage is the result of the last increase in 1996–97 (It was a stepped wage increase—with part of the increase in 1996 and the second part in 1997). Between the time the minimum wage was last raised and 2005, inflation has worn down the wage value: The $5.15 per hour in 2005 is equivalent to $4.23 per hour in 1995.18 The minimum wage is actually losing ground over time. And, it’s abundantly clear that few adults can get by on the federal minimum wage without public assistance of some kind.

More women than men are stuck in minimum and low-wage jobs. In fact, a 2005 study found that between 1992 and 2003, 41 percent of women remained in low-wage jobs, compared to only 34 percent of men (48 percent of men moved up to an abovewage job during that time period, and only 32 percent of women made the jump up).¹⁹ Stagnant minimum wage rates enable employers to pay the lowest rates to our most vulnerable citizens. In the end, there’s little question that mothers are among the most vulnerable workers in our society, making an average of 24 percent less than men.²⁰

7.3 - Nuts and Bolts - A Living Wage

Calculations back up the sentiment that $5.15 per hour isn’t enough to support a family—$5.15 simply doesn’t meet the Self- Sufficiency Standard, which calculates how much money working adults need to meet their basic needs without any subsidies of any kind.²¹ Taking San Francisco as an example, the hourly Self-Sufficiency Standard wage rate needed by two working adults to support themselves, along with a preschool age child and a child in school, has been calculated at $14.27 per hour per adult.²²

The federal minimum wage is currently so far from being high enough to provide people with sufficient money to meet basic needs, that many are taking the fight for fair wages to their own backyards by working on local living wage campaigns. Across the country advocates are working hard in local jurisdictions.

Stephanie Luce, who teaches in the University of Massachusetts’ Labor Studies department, explains it this way: “The United States is the richest country in the history of the world and yet a quarter to a third of American workers work for an hourly wage that is not enough for them to meet the federal poverty line. So we’re talking up to 40 million workers earning quite low wages because we know that even the federal poverty line has been judged by experts to be too low to accurately judge poverty. The living wage movement is basically a movement of campaigns run by community and labor groups to raise wages for workers through legislation, initiatives, contract negotiations, and any other avenue open to workers.”

These living wage campaigns often work through local governments to pass standards that say, for example, city governments will set a floor for their wages that is closer to a living wage, and will only work with contractors that pay a living wage. Dr. Luce comments, “In my research, I’ve come up with a rough estimate that suggests workers have received three quarters of a billion dollars in wage increases through these efforts in 130 cities.” For instance, after a campaign for the city of San Francisco to pay living wages to their contractors and leaseholders, 370s were made with the workers at the San Francisco International Airport when they adopted a Quality Standards Program that set wage floors (otherwise known as a minimum wage) for contractors. This was a big improvement in the pay scale of people who worked for the city at the airport.

Here’s what happened: The national average pay for preboarding airport security screeners was $6 per hour, and those security jobs had extremely high turnover rates (the national average turnover was 125 percent in 1999)—jeopardizing what the job is meant to do, which is provide security.²³ The pay floor was increased to $10 per hour if they received benefits and to $11.25 per hour if they didn’t have benefits.²⁴

This new pay floor at the airport made a huge difference, improving both airport security performance and lives of the workers at the same time. A study of the impact of that living wage pay raise found that annual turnover of airport security workers dropped from 110 percent to 25 percent, and one security contracting firm reported in an even lower 15 percent turnover. The study also found improved job performance with a decline in absenteeism, as well as in disciplinary problems. ²⁵ The cost of this living wage program was estimated to be a small $1.37 price increase to airline passengers.²⁶ That cost, compared to the benefits workers gained and improved airport security performance, makes 370s like these no-brainers.

7.4 - The Minimum Wage Debate

Increasing the minimum wage will substantially improve the living standards for many women and families. Why hasn’t it been done yet? Why the delay from 1997? One answer is that a debate rages about whether or not increasing the minimum wage will hurt businesses and cause them to cut back on available jobs. Yet several studies show that raising the minimum wage does not cause overall job loss. One study, published in The American Economic Review, tracked the impact of the minimum wage increase by the state of New Jersey in the fast-food industry and found, “no evidence that the rise in New Jersey’s minimum wage reduced employment in fast-food restaurants in the state.”²⁷

A different study, released in 2004, did a comparison between states with the federal minimum wage of $5.15 per hour, and those that have passed a higher minimum wage to see if there was any impact on small businesses.²⁸ This study found that small business job growth in the states with an increased minimum wage was actually higher than in states that have the lower federal minimum wage, and that small businesses with fifty or fewer employees weren’t hurt by the state minimum wage increases. To the contrary, the report notes, “using the latest Commerce Department data, employment and payroll growth in the higher minimum wage states performed better than in the remaining states.”²⁹

In addition, a study of the previously mentioned living wage increase at the San Francisco airport found that businesses realize savings through lower turnover, recruiting and training costs, fewer disciplinary problems, and a more engaged workforce.

Mothers comprise a substantial portion of the citizens struggling to live on minimum wage. “An analysis of low-wage workers shows that the main beneficiaries of this one-dollar increase [from $5.15 an hour to $6.15] would be working women, almost one million of whom are single mothers,” found a study published by the Economic Policy Institute. “In fact, of the 11.8 million workers who would receive a pay increase as the result of this higher minimum wage, 58 percent would be women, simply because, as a group, they earn lower wages than men. As a result, a minimum wage increase would help to reduce the overall pay gap between women and men.”³⁰

A federal minimum wage increase will improve the lives of working mothers more than most for two reasons: Women are more likely to be stuck in minimum wage jobs, and mothers on average earn lower wages than non-mothers and men. The federal minimum wage must be raised.

7.5 - Low-Wage Work

Diane, a mother of three, was standing in the prep room of the Wal-Mart deli where she worked in Florida. The room was sparsely set up with a big double sink, walk-in cooler, freezer, a couple of preparation tables, and a hand-washing sink. Regulation white walls, a double door to the warehouse, and a single swinging door to the customer area completed the twenty-fivesquare foot concrete-floored room.

She and two other women who worked together at the deli were getting ready for the day, taking food out of the freezer, opening packages of meat, and putting together food trays. A young man about eighteen years old, a new hire, walked through the double swinging doors from the warehouse muttering complaints under his breath. Diane recalls, “He was saying, ‘They want me to do this, and they want me to do that, all for this small amount of money. And then he said his pay.’ We were all like, ‘What! That’s how much they hired you at!?’ ” His pay was much higher than theirs.

When hired, all the women were told it was store policy to start everyone at the same wage of $6.50 per hour. And the women knew for a fact that another recent hire in their department, a woman with eleven years experience, was hired at that rate (as were they). When they accidentally found out the young man was hired for quite a bit more, the women were upset.

Like Diane, they were all mothers who dearly needed their wages to support their children and families. They were more than upset; they were outraged.

Gender inequality in the workplace is far from a thing of the past.

Despite the data that shows wage gaps, some question whether or not wage inequalities between men and women still exist. Societal trends are easier to see when large numbers of workers’ wages are considered at the same time. So let’s look at the company where Diane works, Wal-Mart, which is our nation’s largest private employer. Wal-Mart has more than 3,000 stores around the country, and as many as 1.6 million women have worked for Wal-Mart since 1998.

In 2001, six current and former female Wal-Mart employees filed a national sex-discrimination class-action lawsuit, alleging widespread gender bias against women with regard to pay, job assignments, and promotions. This lawsuit, Dukes v. Wal-Mart Stores, Inc., is ongoing and active. According to a statistical report prepared by Dr. Richard Drogin, the plaintiffs’ expert in the Wal-Mart case, “Women employees at Wal-Mart are concentrated in the lower paying jobs, are paid less than men in the same jobs and are less likely to advance to management positions than men. These gender patterns persist even though women have more seniority, have lower turnover rates, and have higher performance ratings in most jobs.”

Diane and her co-workers aren’t part of that lawsuit. For many Wal-Mart workers, lawsuits seem remote, and they don’t want to complicate their lives, which are already too demanding. What they did do after accidentally uncovering wage inequality was ask for a meeting with the store manager.

On the day they asked for the meeting they searched all over the store for the manager and couldn’t find him. Finally, towards the end of the day, they were called into the manager’s office. He was absent, but in his place were four men from the main management division. There was only one other woman invited to the meeting, and she was from the personnel office.

The division managers were all sitting around a conference room table on cold metal chairs when Diane and her co-workers walked in. There was an empty desk at the end of the room, and for some odd reason the main decorative feature of the office was a life-size cutout of a racecar driver. The women sat down and were “yelled at” by the managers: “We were told if we were ever caught discussing our pay again it was grounds for termination. They were very agitated and weren’t sympathetic at all. It was like we did something wrong. But we never even asked about pay, he just came out and said it. All we ever wanted to do was talk to the store manager and we never got to,” recalls Diane.

Diane later found out that under Florida law, discussing pay is not grounds for termination, as it is in many states. In a recent phone conversation, Amy Caiazza, from The Institute for Women’s Policy Research, shared her thoughts from a national perspective: “Right now, in many instances, you can be fired for disclosing your salary. That means most people don’t know what their co-workers are making. It’s generally very difficult to know whether you are being discriminated against.”

Caiazza offers a solution to the problem. “There is a bill on Capital Hill that would protect people so they won’t be fired for talking about how much money they make. The bill also requires companies to analyze their salaries and wages and to disclose that data so potential patterns of discrimination can be seen. This is a very simple thing to do.”

It’s often difficult for individuals to see gendered wage inequality. Generally, people don’t compare their paychecks at the water fountain, and questioning why one person makes more than another is far from common. That’s why comparing wages in large corporations like Wal-Mart is so very revealing about our current status.

So what, you might be wondering, does the wage gap between men and women have to do with motherhood? A close look at the numbers shows that the reason the wage gap is so large for all women is that the vast majority of women become mothers (82 percent).³¹ This majority of American women— mothers—are actually making less than the current average reported by the U.S. Census of 76 cents to a man’s dollar,³² since the wages of non-mothers bring up the overall average.

In fact, as we’ve noted, right now the wage gap between mothers and non-mothers is greater than between women and men—and it’s actually getting bigger. Non-mothers earn 10 percent less than their male counterparts; mothers earn 27 percent less; and single mothers earn between 34 percent and 44 percent less.³³ The wage gap, to a large degree, is therefore a direct reflection of bias against working mothers. This bias, in part, is because we don’t have family-friendly policies to support the needs of working mothers and families, like flexible work options, paid family leave, and accessible childcare.

But even if we put gender inequality aside (and that’s one heck of a big aside), there’s something terribly amiss when the nation’s largest employer has a significant number of employees needing, and qualifying for, food stamps and other government subsidies in order to support their families while working fulltime. This scenario of full-time Wal-Mart workers on public assistance is playing out in states across the nation, which means taxpayers are subsidizing Wal-Mart’s profits.

Diane’s starting wage of $6.50 per hour adds up to $13,520 per year if she doesn’t take any unpaid time off and works all fiftytwo weeks of the year at our nation’s largest employer. Very few families can live on $13,520 per year.

In blinding contrast, Wal-Mart CEO and President, H. Lee Scott Jr. made $22, 991,599 in 2004.³⁴ Yes, that’s nearly $23 million. It is clear from the CEO’s salary that Wal-Mart does not pay low wages to its regular workers because it’s struggling to make a profit, but because it’s good for investors and the top management. Taxpayers shouldn’t have to subsidize thriving businesses.

7.6 - Time For A Change

As of the writing of this book it has been almost a decade since the federal minimum wage was raised. Every year the cost of living has risen and workers at the bottom pay levels have less purchasing power. It is no coincidence that the number of working poor is growing. In fact, food stamps, subsidized housing, government sponsored healthcare programs, and other government programs for the poor are now a crucial resource for a large numbers of hardworking adults who have full-time low- wage employment. Many of these programs were originally conceived for citizens who lost their jobs, not for those with jobs.

While real wages for low and median-wage employees has remained stagnant or fallen, CEO pay has risen at an astronomical rate. In 1980, CEOs were paid about forty times as much as an ordinary employee. Now it’s not unusual for CEO pay to be 500 times as much as the pay of an ordinary employee.³⁵

The growing gap between the rich and poor is ultimately not good for our nation. In the last twentyfive years our nation has 370d in ways that should cause us concern. In 1968, GM was one of the largest employers in the U.S., paying employees an average of about $29,000 per year (amount adjusted for today’s dollars) with excellent benefits. ³⁶ Today Wal-Mart is the biggest employer in the U.S., paying the average full-time worker about $17,000 per year with very poor benefits.³⁷

America prides itself on being a land of opportunity, where hard work earns the comfort and security that is the American dream. Better still, a common American dream is to raise your children so their success exceeds your own. It is a good dream, and one we don’t want to loose. A large educated middle class makes our country strong. We don’t want to become a nation of winners and losers, rich and poor, yet the data shows us moving in this direction. Our government is an entity that has some key opportunities to level the playing field for citizens that are struggling. One of those opportunities is raising the federal minimum wage.

A full-time working mother should be able to support her family at the current minimum wage, yet even two full-time working parents often struggle. The minimum wage must be raised. We must do this not only because we value our workers and want to compensate them accordingly (and help them avoid needing subsidies and/or welfare to live), but also because we recognize that parents across America need sufficient income to raise healthy children who become productive, gainfully employed adults.

Something is clearly amiss when the federal minimum wage is completely insufficient for basic subsistence. This is an issue that affects all Americans, but it’s particularly important for women, who still earn less than men for the same work, and even more so for working mothers, who earn less than women without children. Mothers need to be paid fairly. This means equal pay for equal work, and a minimum wage that provides full-time workers with a basic livelihood.

Manifesto Point "R"

ACTION: Mothers want—

(1) A minimum wage that is a living wage.

(2) Equal pay for equal work.

Chapter Seven Notes