Low Pay Keeps Millennials Stuck at Home

It seems that fast-food wages can't pay the rent these days, so this week fast-food workers took to the streets in protest. Then panic ensued, and Fox News immediately launched a counter-offensive by putting on a high-priced restaurant lobbyist to argue that America's most titanic and profitable corporations, as well as the largest job creators, can't afford to pay their employees a living wage. If this is true, then capitalism, as we once knew it, has come to a shuttering halt.

According to a new report by the Pew Research Center, as of last year 36% of the nation's young adults (ages 18 to 31) were living in their parent's home...the highest share in at least four decades. Pew reports that 21.6 million Millennials lived in their parent's home in 2012, up from 18.5 million before the Great Recession hit in 2007. The reasons given were declining employment, rising college enrollment and declining marriage.

In 1973, as an unskilled laborer working at the Spalding factory in Chicopee Falls Massachusetts, one could earn $7.50 an hour, more than the minimum wage is today. (Back then, the minimum wage was $1.60 a hour). And as a union member, one also had healthcare and pension benefits as well.

Today, according the Bureau of Labor Statistics' inflation calculator, that same $7.50 an hour 40 years ago would be $39.44 an hour in today's dollars, as the minimum wage is currently $7.25. Accounting for inflation, it should be at least $8.41 --- but because now, most rely on service industry jobs, as opposed to manufacturing jobs, it should be much higher. Back in 1973, a job at McDonald's wasn't a considered a "real" job, but a part-time job for those still in school. But the times, they are a changing.

Today Walmart is the largest private sector employer in the U.S. with more than 1.3 million employees. A Reuters survey of 52 stores run by the largest U.S. private employers showed that 27 of them were only hiring temporary workers --- including America's largest employer, Walmart, who calls temps "flexible associates".

Low wage workers demad a living wage

And America's second largest private sector employer is a temp agency called Kelly Services with 538,000 workers. Then there's UPS (400,600) and McDonald's (400,000). GM, Bell, Ford, GE and U.S. Steel used to be America's largest employers. The federal government is, and has always has been, America's largest job creator (Note to John Boehner: "Government creates jobs.")

The various minimum wage proposals that are currently being offered for discussion are ludicrous. President Barack Obama has proposed raising the federal minimum wage to $9 and pegging it to inflation, while congressional Democrats would like to see it set higher, at $10.10. The minimum wage in 1973 wasn't enough to live on. It might have been adequate 40 years ago for teenagers who were working summer jobs --- or for college kids, helping to subsidize their costs of tuition and books --- but nowadays, grown-ups who have families to care for and children to feed rely on these type of jobs (fast-food and retail).

The jobs that are being offered to the Millennials in 2013 (whether they're college-educated or not) are at places like McDonald's or Walmart earning $8-9 an hour. They are not earning enough to pay for rent AND a car payment, auto insurance, food, electricity, cloths, cell phone and healthcare. McDonalds had a budget for their employees, assuming they would work TWO jobs --- but there are only 3.8 million job listings for 11.8 million unemployed. Do the math (7 million are already working multiple jobs).

So rather than moving out of their parent's house to enjoy their freedom and be out on their own, the Millennials are being forced to stay at home --- stuck --- relying on their parents.

According to a new analysis from the National Employment Law Project, the biggest losses in real wages during the "economic recovery" have been concentrated in low- and middle-income job categories. In other words, any nominal raises that many workers may have received have been wiped out by inflation, essentially leaving them with less money to cover their bills.

These workers also took a sizable hit earlier this year with the expiration of the temporary payroll tax cut, which had been lowered by 2 percentage points for two years as a stimulative measure. But the CEOs, who earn millions of dollars every year off of their stock options, pay no payroll taxes at all on their capital gains --- and are only taxed for Social Security up to $113,700 on their base pay.

And the same can be said for members of Congress. House members and Senators make $174,000 a year (plus perks), with the exception of the Speaker and other top leadership positions, who earn much more from their "big government" salaries --- and whose COLAS aren't subjected to chained-CPI as is proposed for Social Security recipients. According to a Rasmussen poll, 81 percent of respondents said lawmakers should take a 25 percent pay cut until the budget is balanced.

Occupations that have been socked by inflation include restaurant cooks (-7.1 percent) and food preparation workers (-5.2). Many retail and food workers have seen their inflation-adjusted incomes fall even though their industries are actually adding jobs. Bargaining power is disproportionately weaker among workers in low-pay
industries. As research from the Economic Policy Institute shows, even in an improving job market, wages tend to increase at a slower rate among low-wage workers than among middle- and high-wage workers.

But recently low wage fast-food and retail workers have been fighting back, staging their biggest strikes yet, with hundreds of workers walking off the job in seven cities across the country. Chief among their demands was a raise to a "livable" wage of $15 an hour. Currently, the median hourly wage for cooks, cashiers and servers who deliver your meals is $8.94 an hour. That is hardly enough to get by on in most cities. And while $15 might sound like a big jump (almost double), it's still not enough to meet living wage standards in many areas. It seems no matter where one lives, every month or so either the cost of food, gas or electricity is always getting higher.

The strikers have a long list of grievances, not the least of which are poverty wages that forces many (if not most) of these workers to choose between eating three square meals a day or keeping a roof over their head...or living at home with their parents.

According to a recent report from the Employment Policies Institute (a research organization whose work is often cited by those who argue against increasing the minimum wage), if McDonald's had doubled their employees' wages, the price of a Big Mac would go up by $1.28 --- not, they argue, 68 cents as the Huffington Post had previously reported. But even still, Dean Baker, co-director of the Center for Economic and Policy Research, says that there's no way "that it'd put McDonald's out of business."

The only problem is, if the fast-food (and retail) workers were given a fair wage, many poor people who rely on fast-food for their nutritional needs could suffer an economic hardship if the price of a Big Mac went up a $1.28. But then again, if those poor people were McDonald's or Walmart employees, maybe they would buy two Big Macs instead of one. (Add maybe these same employees wouldn't need food stamps either, saving the taxpayers a fortune. After all, aren't these "government entitlements" really "wage subsidies"? And fair wages would also help keep taxpayers from having to subsidize profits for large corporations. (15% of America is currently relying on food stamps.) And think of all the tax revenues the nation could generate with all the increased wages. (Another note to John Boehner: "We have a revenue problem.")

These low wage workers were also protesting against their employers for skimming money from their already meager paychecks, like pre-paid debit cards that forces people to pay to access the money they've already earned. Ever since the news of the fee-laden debit cards broke, McDonald's has been on the defensive. Now, with strikes spreading all over the country this week, McDonald's executives are paying close attention to how customers and potential customers are reacting to the workers' concerns.

Workers who hadn't initially planned on participating in the walk-outs, suddenly decided to join their co-workers. It was also reported that replacement workers that were brought in ("scabs") have been refusing to cross picket lines.

The restaurant industry is so concerned that one of its trade associations took out a full-page ad in USA Today to try and convince the public that these massively profitable fast-food chains can't possibly pay a living wage. Here's the ad from the Employment Policies Institute (not to be confused with the Economic Policy Institute). In part, the ad says:

"Today, union-supported activist groups are staging walk-outs at restaurants in seven major cities, demanding a $15 hourly wage. This would have negative consequences for employees. Restaurants keep just a few cents in profit from each sales dollar, and won't be able to afford current staffing levels when faced with a $15 minimum wage. Instead, they will be forced to replace employees with less-costly, automated alternatives like touch-screen ordering and payment devices.

Recently on July 29th, on the Fox News business channel, host Stuart Varney interviewed Richard Berman of the Employment Policies Institute to provide a "critical analysis" of the walk outs. Berman dismissed the idea of raising fast food employee wages, claiming that a hike in pay would result in lower employment:

"The business model just does not support those kind of wages. If people are feeling that they are not being paid adequately, then they have got to find a job someplace else."

Berman, a corporate lobbyist, did not disclose his organization's ties to the fast food industry. According to Citizens for Responsibility and Ethics in Washington, the Employment Policies Institute is one of many front groups associated with Berman which provides political cover for clients in the restaurant, hospitality, alcohol, and tobacco industries. Berman specializes in a so-called "aggressive media outreach" approach intended to "change the debate" in favor of major clients.

Berman, who says the fast-food industry can't support paying $15 an hour, is trying to convince the general public that this raises the incentive for fast-food businesses to replace workers with some automated method of preparing, serving and selling fast-food via an iPad. According to the Employment Policies Institute's 2011 990 form, Berman is paid $1.16 million to use scare tactics to convince others that they aren't worth $15 an hour.

If all these workers had all been in a labor union, they'd have people representing them against corporate shills like Berman. But according to the Bureau of Labor Statistics, union density dropped to new lows last year, with just 6.6 percent of private-sector workers being union members. Labor leaders have long argued that labor law is tilted in the favor of employers, making it difficult to unionize workers. Many of the jobs the economy has added in the recovery are in low-wage service-sector industries, such as retail and food, where unionization rates tend to be miniscule.

The Republicans have been on a rampage for the past 40 years to kill the unions, who fund Democrats in elections. Whereas the Republicans are primarily financed by the big banks and corporations. GOP controlled state legislators have also passed various anti-union/worker laws, such as "right to work". And the GOP in Congress has also battled to weaken or eliminate many other worker organizations, such as the National Labor Relations Board, the Equal Employment Opportunity Commission and the Occupational Safety and Health Administration (OSHA) ---  just to name a few.

If the Republicans could, they'd also do away with the minimum wage completely --- as well as unemployment benefits for laid off workers, disability if one became ill or injured at work, and Medicare and Social Security when one becomes too old to work. That's why, despite all the conniving that the Democrats are capable of, the Republicans give us many more reasons why friends shouldn't let friends vote Republican --- unless of course, they're a multi-millionaire like Bill O'Reilly, Darrell Issa, Sean Hannity, Herman Cain, Rush Limbaugh, Mitt Romney or Glenn Beck.

Richard Trumka, the president of the AFL-CIO union federation, said, "Working women and men urgently need a voice on the job today, but the sad truth is that it has become more difficult for them to have one, as today's figures on union membership demonstrate. Our still-struggling economy, weak laws and political as well as ideological assaults have taken a toll on union membership, and in the process have also imperiled economic security and good, middle-class jobs."

In other words, it's not 1973 anymore. Most of those jobs went to Asia. Now most of the hiring that many major US companies are doing is overseas.

Three million teenagers are graduating from high school every single year --- and they will either be looking for a job, enrolling in college, or both. If they can't earn a "living wage", many more will be living at home with their parents --- and protesting in the streets. If not, they could very well be sleeping on them instead.

Fast food workers walk off the job

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Comments

Fast food strike

"The Republicans have been on a rampage for the past 40 years to kill the unions, who fund Democrats in elections. Whereas the Republicans are primarily financed by the big banks and corporations."

The democrats also get plenty of money from corporations and banks. Both those entities own both sides to a degree, (kinda like owning both horses in a two horse race), so they cant lose.
It has been a standard propaganda message by the MSM that the democrats are more for people and less for the corporations and banks.
The truth is neither side really gives a damn about the people, they do what the big money tells them to do. You are going to hear stories about the connected (corporate) people making big bucks off Obama Care in the days to come.

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Crony capitalism

You are correct --- that was a generalization, although data shows that many more smaller private donations came from a greater number of people to support the Dems. But yes, both parties are beholden to the banks and corporate interests --- both are equally guilty of crony capitalism. But it because the Dems do get so much support from the unions that, by default (whether they want to or not), they have to pass more laws supporting regular working people...otherwise the unions would withdrawl their support, the Dems would lose political power, and we'd have a one party system.

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Fast Food strike

That's true, Rich, but because the Dems are more afraid of NOT being re-elected, they try to do a pretty good pandering to their base, and there are a few sucker voters out there who haven't got a clue about how their rep actually votes, once he's in.
Republican incumbents from rich rural older white districts don't have to worry. They know a majority of their base supports them. That's how they got elected in the first place. The dissatisfied minority will never be listened to.
It's more like the Bastard Party ("Out of my way, weakling") vs. the Tell-'em-anything-but- constantly-disappoint party. (I'll address all the social issues, but don't ever ask me about money")
But to get back to the McDonald's issue...
check the disingenuous line laid down by the big business shill: that SHOULD McDonald's raise workers' wages, then the company would be forced to use that ready supply of IPods that they have waiting in a basement somewhere to replace them. Sob. Never occurs to this clown how many people would call bullshit on that.
It goes without saying that, if McDonald's had the technology to do that, they would have ALREADY replaced workers at seven-and-change. As if Mickey D is continuing to do you a favor paying you such peanuts.
He never addresses the issue of JUST HOW MUCH paying a living wage would cost the company.

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Fast Food

Let me try to keep this simple. If you are unwilling to pay the people who do the work of
serving, food, maybe you stay at home and do your own cooking. In the Footwear Industry of 150 to 100 years ago, my great grandfather made a fortune, like Henry Ford, by insisting on paying a living wage to the workers who made the shoes. He went a step
further by encouraging, not stopping unions.

So he went broke right? By WWI, he was the biggest maker of men's and women's footwear in North America. Scetching the first high heals, he made a fashion coup as the first American maker of high heals. His firm made the boots for the U.S. Army in WWI. As a Civil War Hero, it did not hurt. There is a portrait of him mustering out the Irish Brigade in the N.Y Historical Society. Lincoln and Sherman credited him with winning Antietam. This is the kind of man who builds, rather than destroys industries.

The idea is that my great grandfather, Ford, Carnegie, and so many others, were part of generation that built, rather than destroyed our economy. Destructive Capitialism is worshipped by so many today. I say that Destructive Capitalism is dead if not already dying.

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Burton Leed

IBM employment number

The IBM employment number of 426,000 is a worldwide number. In the US, IBM has been slashing jobs for years and moving work offshore. IBM US employment number is now down to 88,000. IBM India is now 130,00.

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Thanks for that distinction on IBM

IBM's 2012 annual report says they have 434,246 employees (worldwide)

IBM/wholly owned subsidiaries: 434,246
Less-than-wholly owned subsidiaries: 8,009
Complementary: 24,740

Their reports says "The company operates in over 170 countries and is continuing to shift its business to the higher value segments of enterprise computing. The company continually assesses its resource needs with the objective of balancing its workforce globally to improve the company’s global reach and competitiveness. The complementary workforce is an approximation of equivalent full-time employees hired under temporary, part-time and limited-term employment arrangements to meet specific business needs in a flexible and cost-effective manner." bla, bla, bla...

http://www.ibm.com/annualreport/2012/bin/assets/2012_ibm_annual.pdf

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surprised?? NOT!

Is anybody surprised by the strikes by fast food workers, come on? The only ones surprised are the talking heads at Faux news.

They have shipped millions of good paying jobs to china and india and left average american workers with McJobs and Walmart associate jobs which can't be shipped to china and what do the elite expect? Honestly how long do they think people will take their crap?

By the way does anybody remember the Employee Free Choice Act? Neither do I. Although I think a politician named Senator Barack Obama supported it.

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