wrdforwrd

green and sustainable business

Employees can’t afford to eat? Happy New Year!

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Happy New Year_Amodiovalerio VerdeWelcome to the New Year, same as the old year—in much of corporate America and the Republican Party.

A recent HBR Blog item by Peter Cappelli notes it was not all that long ago that companies worried about whether their employee practices were fair. “One of the functions of human resource departments was to advocate for the interests of employees.”

That was a long time ago in galaxy gar, far away. Shareholder activism as well as court cases sympathetic to shareholder interests have meant that the vast majority of companies pay more attention to maximizing stock prices, often at the expense of their employees.

“Let’s be clear about the wage levels that are associated with not having enough to eat,” Cappelli writes. “A family of four with one breadwinner is eligible for food stamps if they earn less than $2500 per month. That is the equivalent of a $15 per hour job and a 40 hour work week.” By the way the food stamp program is one of the “safety net” programs that Republicans want to eviscerate, even as we speak.

But a $15 per hour wage is generally seen these days as a good wage. Perhaps a family can scrape by on that, but how ridiculous is that notion?

Even more ridiculous though are the jobs that pay at or about the federal minimum wage of $7.25 per hour, or $1150 per month full time. It has been at that level since 2009. Under that wage—less than $14,000 a year—a family of four that depends on a single earner is living way below the poverty line, and needs federal assistance for food, housing and healthcare—assistance that Republicans want to cut drastically or eliminate.

“One of the things that I find surprising is how many companies that pay poverty-level wages or thereabouts to their employees spend a good deal of effort to be good corporate citizens in other areas,” Cappelli says. “They try to make their operations ‘green,’ lessening their impact on the environment, some even sponsor anti-poverty programs in Africa, and so forth. They just don’t seem very interested in the poverty among their own workforces.”

Author Steve Coll also addressed this parlous situation in a recent New Yorker piece: “Earlier this year, fast-food workers nationwide went on strike for higher pay. This holiday season, activists have been excoriating Walmart because one of its stores organized a charitable food drive for its own low-paid employees. McDonald’s was taken to task for suggesting, on a company Web site, that strapped employees could raise cash for presents by selling belongings on eBay.”

In the article, Coll recounts the story of nearby Sea-Tac, WA, a city of 27,000 located near Seattle, whose major claim to fame is Seattle-Tacoma International Airport. Last year Sea-Tac residents, aided by outside labor organizers, put forward a ballot initiative — Proposition 1 — to raise the local minimum wage for some airport and hotel workers, including baggage handlers, to $15.00 an hour. That would be the highest minimum wage in the country, by about 50 percent. Business groups and labor activists spent almost $2 million dollars on television ads, mailings, and door-to-door canvasses opposing Proposition 1, spending about $300 per eventual voter. The region’s only major daily newspaper, The Seattle Times, opposed it (of course). But incredibly, the measure passed by a margin of 77 votes.

A reversal after a recount is possible. But the surprising result is encouraging nonetheless.

President Obama has endorsed a target minimum wage of $10.00. Congress, with Republicans in full-throat opposition, makes passage unlikely. This means that local campaigns to raise the minimum wage, such as in Sea-Tac and in 20 other states, are the best hope for relief.

Cappelli sums it best: “Employees have human rights that do not disappear when they enter the workplace.

“If you are a member of the board of directors of a company that pays its workers so little that they need government subsidies to survive, isn’t that a little embarrassing? Most of these companies want to refer to themselves and their employees as a kind of family, but what kind of family allows its members to go hungry? And what prevents you from doing something about it?”

And the idea that raising the minimum wage skews the “job market”—whatever that is—is lame and today overblown. See two recent blog items from Nobel Laureate and New York Times columnist Paul Krugman here and here. The idea that corporations care that job markets are threatened by a modest increase in the minimum wage is absurd. They care about profits and keeping shareholders happy.

Message to Wall Street, to corporate America and the Republican Party: there is dignity in work and someone who works full time should not be hungry or at risk of poverty.

[Image: Happy new year by Amodiovalerio Verde via Flickr cc]

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Written by William DiBenedetto

1 January, 2014 at 3:00 am

One Response

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  1. […] Welcome to the New Year, same as the old year—in much of corporate America and the Republican Party. A recent HBR Blog item by Peter Cappelli notes it was not all that long ago that companies worried about whether their employee practices were fair. “One of the functions of human resource departments was to advocate […] wrdforwrd Read Original Post […]


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