What goes around comes around: A living wage and worker solidarity

By Lynne Fernandez, Errol Black Chair in Labour Issues

There have been some rumblings from south of the boarder that people under 40 may not recognize and that may be only vaguely familiar with others: the sound of workers on the rise, of a groundswell of workers who have had enough of the new economic reality they are mired in.

Earlier this month fast-food workers in 60 US cities shut down McDonald’s and Burger King and also demonstrated at other stores such as Macy’s Inc., Sears and Dollar Tree. These workers, fed up with not being able to support their families or afford healthcare coverage, have learnt a lesson that workers knew only too well during the last century and before: if you want a fair deal at your workplace, you have to form a critical mass and speak with one powerful voice. The service sector in both the US and Canada is bereft of union coverage and these workers are now connecting the dots between lack of unionization and the low-wage, precarious job they have.

A community where people are earning poverty wages is a poor community. And poor communities put more pressure on healthcare services, on food banks, on welfare, on dealing with crime; low-wage corporations are able to externalize these costs by keeping wages low and profits high. Notwithstanding the hassles created by keeping workers poor and disgruntled, low-wage employers face a dilemma; low-wage workers lack disposable income. When a region has many low-wage workers, it will inevitably have low demand for the products and services available in its economy. Seventy per cent of mature economies’ GDPs are driven by consumption.  You see the problem.

And lest you think that these minimum- wage jobs (at $7.25/hour) are reserved for teenagers, think again (and check out this article in the New Yorker). Many of these employees are parents and are only given part-time hours, making around $10,000 year.  In Washington D.C., local politicians understood only too well the implications of such miserly wages. The “Large Retailer Accountability Act of 2013” of the Council of the District of Columbia, stipulates that “Without safeguards, large retailers threaten to erode both living standards for working families in the District […]. By adopting living wage standards for large retailers, The District can ensure that economic development better meets the community’s need for family-supporting jobs.” Later on it is noted that “in other cities, the enactment of living wage laws has had no negative impact on retail employment and development,”

The idea of a Living Wage is growing across North America. A Living Wage is not the minimum wage; it is an amount at which a family can afford life’s necessities and live in dignity. These American workers want a Living Wage, and their struggle is made more urgent by lack of access to health insurance. Luckily we don’t have that problem in Canada, but the demand for a Living Wage is growing here too.

It is unlikely that we will see significant movement on the living wage issue without workers continuing to flex their muscles as they’ve started to do in the US (D.C. Mayor Gray vetoed the Bill). Despite the power of the anti-union movement, labour is poised to help organize these workers and hopefully finally break into the retail sector. Workers and unions have been taking a beating for the last 4 decades; maybe we’ve finally come full circle.

It’s our turn again. And what’s good for us is good for the whole economy.

 

1 Comment

Filed under economic well-being, economy, Employment, inequality, Labour, labour market, poverty, privilege, Prosperity

One response to “What goes around comes around: A living wage and worker solidarity

  1. Unfortunately, many of the jobs created since the recession have been low wage jobs replacing previous higher wage work in manufacturing.

    In the US: Majority of New Jobs Pay Low Wages, Study Finds
    http://www.nytimes.com/2012/08/31/business/majority-of-new-jobs-pay-low-wages-study-finds.html?_r=0

    Same story in Canada:

    “Between 2006 and 2012, there were an additional 148,000 workers in Ontario’s sales and services occupations, made up of retail sales clerks, food and accommodation servers, cooks, etc. In fact, retail trade companies with 300 and more employees increased jobs by 41,458 employees — the second largest growth sector for employers with more than 300 workers, behind large health care employers. It’s worth noting that while these sales and service jobs are with larger employers, many are precarious: they are contract, short-term, part-time, and shift work positions, and often the pay is low. Indeed, many of Ontario’s minimum wage earners work in these jobs.”

    – More Harm Than Good: Austerity’s Impact in Ontario, Trish Hennessy and Jim Stanford http://www.policyalternatives.ca/sites/default/files/uploads/publications/Ontario%20Office/2013/03/More%20Harm%20Than%20Good_0.pdf

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