In concerted action that cut across industry sectors and countries, April 2015 saw thousands of people come together to protest their low wages and demand $15 per hour wages, under the ‘Fight for $15’ movement. The movement primarily included workers from the retail and food service industries, child care and adjunct professors. Started two years ago, the movement spread to 35 countries around the world, defying the usual reasons offered against increasing wages.
These arguments have been around for a while! Increased wages cut into the revenues of companies, hurt their ability to post profits, and require employers to downsize the number of workers and/or increase prices. Higher prices would drive customers away, forcing the company into further losses.
The counter argument offered by the members of the Fight for $15 movement is that the workers are being paid low wages and the profits of companies on the one side are creating poverty on the other. By restricting their ability to purchase goods and services, the economy suffers.
The movement has motivated at least four states to raise the minimum wage, along with corporate heavyweights like Walmart and McDonald’s, and also inspired thousands of workers to join the struggle by striking work and taking to the roads holding placards clearly demanding better wages. After all, a $15 per hour wage would translate to merely $31K (15*40*52) annually, if we assume that the worker was working 40 hours per week.
Will the movement actually help to mitigate income inequality and not push workers further down the threatened bleak path where they are replaced by machines, which can do the same job for less? With the leadership at the helm set to change in 2016, we have political responses which definitely acknowledge the movement and actually promise to do something about it. As new players announce their presidential candidacy each week, we constantly hear that this issue is a key element of their political platform (pro and con). Of course, specific action is not possible unless and until the person/party gets elected to power. The real question is whether they are committed to driving higher wages and if yes, how quickly they propose to achieve it. The time frame matters, as the movement becomes aggressive in its approach.
While a national response may not be decided until after the election, local municipalities are taking local actions to mandate higher wages. Within the past two weeks, Los Angeles, San Francisco and Seattle have signed into law ordinances that will gradually raise the minimum wage to $15 per hour. Chicago passed legislation last year that would phase in an increase to $13 per hour. California, the state that often leads the nation in legislation aimed at promoting workers’ rights, is also taking action. Its senate voted to raise the minimum wage to $13 in 2017, then adjust each subsequent year for inflation.
According to data taken from the Current Population Survey conducted by the U.S. Census Bureau, we have 3 million workers who are paid at or below the federal minimum wages. The most affected demographic among them consist of women and teenagers. While teenagers may be earning pocket money, many of the women would be mothers, single or married, responsible for the welfare of their children.
At a pay rate of $15 per hour, guidelines issued in January 2015 by the Census Bureau places a family of six below the poverty level. However, to get an accurate indication of this wage level, we must factor into the equation the average number of hours worked per week, which – in the industries mentioned above – are typically significantly less than 40. There is no doubt that a revision in minimum wages will benefit people who work two jobs, but still find it hard to make ends meet. Many of these are women as the chart below unequivocally demonstrates.
The movement may also revive the culture of labor unions, which have long championed the cause of the working class and helped them achieve higher wages and better working conditions. It has definitely brought down the opposition to the idea of increasing minimum wages. Finding machines which navigate between tables and serve coffee with a friendly smile must prove a lot costlier.
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