Tag Archives: minimum wage

McDonald’s, In-N-Out, and Chipotle are spending millions to block raises for their workers


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California voters will decide next year on a referendum that could overturn a landmark new state law setting worker conditions and minimum wages up to $22 an hour for fast-food employees in the nation’s largest state.

Chipotle, Starbucks, Chick-fil-A, McDonald’s, In-N-Out Burger and KFC-owner Yum! Brands each donated $1 million to Save Local Restaurants, a coalition opposing the law. Other top fast-food companies, business groups, franchise owners, and many small restaurants also have criticized the legislation and spent millions of dollars opposing it.

The measure, known as the FAST Act, was signed last year by California Gov. Gavin Newsom and was set to go into effect on January 1. On Tuesday, California’s secretary of state announced that a petition to stop the law’s implementation had gathered enough signatures to quality for a vote on the state’s 2024 general election ballot.

The closely-watched initiative could transform the fast-food industry in California and serve as a bellwether for similar policies in other parts of the country, proponents and critics of the measure argued.

The law is the first of its kind in the United States, and authorized the formation of a 10-member Fast Food Council comprised of labor, employer and government representatives to oversee standards for workers in the state’s fast-food industry.

The council had the authority to set sector-wide minimum standards for wages, health and safety protections, time-off policies, and worker retaliation remedies at fast-food restaurants with more than 100 locations nationally.

The council could raise the fast-food industry minimum wage as high as $22 an hour, versus a $15.50 minimum for the rest of the state. From there, that minimum would rise annually based on inflation.

California’s fast-food industry has more than 550,000 workers. Nearly 80% are people of color and around 65% are women, according to the Service Employees International Union, which has backed the law and the Fight for $15 movement.

Advocates of the law, including unions and labor groups, see this as a breakthrough model to improve pay and conditions for fast-food workers and overcome obstacles unionizing workers in the industry. They argue that success in California may lead other labor-friendly cities and states to adopt similar councils regulating fast-food and other service industries. Less than 4% of restaurant workers nationwide are unionized.

Labor law in the United States is structured around unions that organize and bargain at an individual store or plant. This makes it nearly impossible to organize workers at fast-food and retail chains with thousands of stores.

California’s law would bring the state closer to sectoral bargaining, a form of collective bargaining where labor and employers negotiate wages and standards across an entire industry.

Opponents of the law say it’s a radical measure that would have damaging effects. They argue it unfairly targets the fast-food industry and will increase prices and force businesses to lay off workers, citing an analysis by economists at UC Riverside which found that if restaurant worker compensation increases by 20%, restaurant prices would increase by approximately 7%. If restaurant worker compensation increased by 60%, limited-service restaurant prices would jump by up to 22%, the study also found.

“This law creates a food tax on consumers, kills jobs, and pushes restaurants out of local communities,” said the Save Local Restaurants coalition.

On Wednesday, McDonald’s US President Joe Erlinger blasted the law as one driven by struggling unions that would lead to “an unelected council of political insiders, not local business owners and their teams,” making key business decisions.

Opponents have turned to a similar strategy used by Uber, Lyft and gig companies that sought to overturn a 2020 California law that would have required them to reclassify drivers as employees, and not “independent contractors,” which would provide them with benefits such as a minimum wage, overtime, and paid sick leave.

In 2020, Uber, Lyft, DoorDash, Instacart and others spent more than $200 million to successfully persuade California voters to pass Proposition 22, a ballot measure that exempted the companies from reclassifying their workers as employees.

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These 8 money moves can help you make up for lost income

kate_sept2004 | E+ | Getty Images

The recovery from the Covid-19 pandemic has been slower than a lot of people expected.

For many Americans, that means their incomes are not yet back on track or may have suffered again during the onset of the delta variant.

Data shows that hiring is still slow. Weekly initial jobless claims were up more than expected last week. Continuing unemployment claims were also higher.

While many unfilled positions are available in certain industries, other workers may struggle to find a fit that matches their experience.

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Regardless of whether a financial setback has just hit you or you have been unemployed for months, revamping your strategy to find a new job or more income can help increase your chances of success, according to Winnie Sun, a financial advisor and managing director at Sun Group Wealth Partners in Irvine, California.

These are the tips that Sun said she has been giving clients who are in this situation.

1. Search for Covid-19 assistance

Federal, state and local programs have been put in place to help individuals and families cope with the pandemic.

To find out what might be available to you, Google three words — Covid financial assistance — with your location turned on, Sun said.

Just by doing that search, you should be able to find programs that weren’t previously on your radar, including ones aimed at specific demographics or industries.

2. Seek out temporary income

If you typically work in a field where jobs are no longer available, look for other ways where you can potentially find work quickly, Sun said.

That could include making yourself available for freelance work or one-off tasks.

“The key is to bring in income,” Sun said. “You don’t have to love your source of income right now.”

3. Avoid raiding your retirement benefits

Money you have set aside in a 401(k) or individual retirement account, including Roths, should stay there, if possible.

“That should be seen as a last resort,” Sun said. “I wouldn’t touch that if you could.”

Instead, focus on ways you can bring in more income and reduce your expenses.

4. Tighten your budget

Take a look at how much you’re spending and look for ways to slash your expenses, starting with your biggest costs.

If you live in a two-car household and can survive with just one, consider selling a vehicle or even just temporarily cutting it from your insurance policy, Sun said.

Also look for ways of reducing your overall living expenses, either by moving in with a friend or family member or taking on a roommate to help share your costs.

So often, people think that you should only be talking to us when you have a lot of income and you’re able to invest, and that’s actually not true.

Winnie Sun

managing director at Sun Group Wealth Partners

Once you have tackled those big-ticket items, evaluate whether there are other monthly bills — such as phone, internet or TV streaming subscriptions — that you can reduce or even cut altogether.

Additionally, take a look at items around your house that you don’t need. Everything from old video game consoles to fitness equipment may be able to be sold online.

“Everything that you thought wasn’t worth much, I think you’ll be pleasantly surprised that it is online,” Sun said.

5. Make sure you have health insurance

If you lose your job, your employer will make it possible to extend your health insurance. But that program, known as COBRA (named for the Consolidated Omnibus Budget Reconciliation Act of 1985), is often the most expensive choice.

Instead, reach out to your primary care physician and dentist to find out what other forms of insurance they take.

“Oftentimes, they will know other low-cost options that you haven’t even thought about,” Sun said.

One client of Sun’s was able to get emergency dental work and pay 75% less on the costs after she switched to a plan her dentist recommended, she said.

6. Talk to a financial professional

Even if you’re broke, it is still a good idea to reach out to an accountant or financial advisor for help, Sun said.

They may be able to help identify government programs or tax benefits you may now qualify for, she said. Additionally, they can assess which accounts it would be best to draw from in a pinch.

“So often, people think that you should only be talking to us when you have a lot of income and you’re able to invest, and that’s actually not true,” Sun said.

7. Get active on social media

Job applicants take part in a career fair at a Los Angeles post office on Sept. 30, 2021.

Frederic J. Brown | AFP | Getty Images

Social media can help you identify sources for work beyond traditional job ads.

Groups on Facebook or LinkedIn for people in your industry or who share your interests may help you find positions listed outside of job boards or connect with professionals who are hiring.

“You might be able to find work, either temporarily or permanently, really quickly,” Sun said.

Also be sure to update your LinkedIn profile to include an avatar showing that you are looking for work. Ask people who you have previously worked with to write references that will be readily available on your profile.

8. Find a recruiter

Many companies that are looking to hire have enlisted recruiters to help them with their searches.

Reaching out to one of those professionals may help you identify opportunities you may not have considered.

Because recruiters are typically paid by hiring companies, that advice typically won’t cost you, Sun said. Plus, it can help you get an in at a company you’re really interested in working for.

“Sometimes it takes a recruiter to represent you best,” Sun said.

 

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Average Wage for Service Workers Just Climbed Above $15/Hour

Photo: Patrick T. Fallon / AFP (Getty Images)

Democrats failed to pass a $15 minimum wage earlier this year, but workers are forcing employers to raise wages on their own by essentially withholding their labor until conditions improve.

According to the Washington Post, the average pay for restaurant and grocery store workers recently topped $15 an hour for the first time ever, a rise fueled by what many have termed a “worker shortage.” But while some employers and conservative politicians may blame extended unemployment benefits and stimulus checks on Americans not returning to work, people’s reasons for staying home are more complicated.

Indeed, unemployment checks and savings are making some workers more selective about what jobs they’ll take—or if they’ll apply to any at all. This is only a problem for those who consider work to be a moral requirement, as well as an economic one. (It’s also worth nothing that states that have cut unemployment benefits aren’t necessarily seeing more people return to work either.) Other workers, however, are hesitant about rejoining the labor market because of childcare costs, or uneasiness about exposure to covid. And then there are those who are finding that frustrated employers are often unwilling to do the one thing that would make the jobs they’re offering more appealing: raise wages.

It seems some companies have finally begun to give in. The Post reports that some 80 percent of American workers are now paid at least $15 an hour, which represents a 60 percent increase from seven years ago. Many of the workers to see the biggest wage hikes are those those who work traditionally low-wage jobs, like those in the service industry. From the Post:

Before the pandemic, the average nonmanagerial restaurant worker earned $13.86 an hour. By June, the most recent month for which Labor Department data is available, that had skyrocketed to $15.31, a more than 10 percent increase. Supermarket workers just crossed the $15 threshold in Juntheir pay is up 7 percent since the pandemic began, to $15.04 an hour.

It’s crucial to note, as the Post does, that the average wage going up is not the same as raising the federal minimum wage—which has remained stagnant at $7.25 since 2009. A huge portion of workers are still making less than $15 an hour, and they may not see their wages go up until the federal government takes action.

Still, it’s a testament to workers that the average wage has risen at all. Their refusal to accept the same wages and shitty work conditions is a radical act since it dares question why we work at all. Workers may have to return to work even as they contemplate such an enormous existential question, but at least they’ll be making slightly higher wages when they do.

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U.S experiments with guaranteed income

New York City housing advocates and tenants march to demand Gov. Andrew Cuomo cancel rent amid the pandemic on Oct. 10, 2020.

Andrew Lichtenstein | Corbis News | Getty Images

The new federal coronavirus relief bill that’s poised to be approved on Capitol Hill could put unprecedented sums of money into the hands of American families.

That includes new stimulus checks of up to $1,400 for adults and their dependents, as well as up to $300 per month per child through an enhanced child tax credit.

This week, some Democratic senators upped the ante, and called for recurring stimulus checks and indefinite expansion of unemployment benefits for the duration of the pandemic.

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To some experts, the move shows the idea of guaranteed income, where a certain floor of money is provided to a targeted set of people, could be gaining momentum in the U.S.

The idea of direct checks to Americans has become more popular. Former Democratic presidential candidate Andrew Yang brought national attention to the concept when he proposed direct payments to individuals on the debate stage in 2019.

Around that time, cities like Jackson, Mississippi, and Stockton, California, started running tests to see exactly how these kinds of programs could work.

Now, even more places are embracing the concept, with 42 cities having signed on to Mayors for a Guaranteed Income, a program that helps them to follow Stockton’s lead and run their own pilots.

Those developments come as the coronavirus has further exposed the economy’s flaws, particularly with regard to income inequality, according to Amy Castro Baker, assistant professor at the University of Pennsylvania’s School of Social Policy and Practice. She is also working as a co-principal investigator of the Stockton Economic Empowerment Demonstration, or SEED.

“It has pulled the curtain back on the fact that most communities and most households, especially working-class households, have not recovered from the wealth loss of the Great Recession,” Baker said.

Now, the pandemic has exacerbated that situation for a lot of individuals and families. The Pew Research Center recently found that 1 in 10 Americans say they will never recover from the current crisis.

“Something is broken,” Baker said.

‘Give families the support that they need’

Aisha Nyandoro, founder of Magnolia Mother’s Trust

D’Artagnan Winford

Springboard to Opportunities, a Jackson, Mississippi-based organization that helps connect families who live in affordable housing to resources to help improve their lives, has witnessed the devastation Covid-19 has brought on the community.

“It’s going to take years, if not a generation, for families to get back to that foothold that they had,” said Aisha Nyandoro, CEO of Springboard.

Nyandoro is also the founder of Magnolia’s Mother’s Trust, a program that provides African-American mothers who are living in extreme poverty in the city with $1,000 per month for a year.

In 2018, the trust ran its first one-year program with 20 mothers. Magnolia finished its second round of $1,000 payments to 110 mothers last month. Now, the program is preparing to launch a third program for about 100 mothers.

Preliminary research shows the program has helped 40% of participants to avoid borrowing money. Meanwhile, 27% were more likely to go a doctor when necessary and 20% were more likely to have children performing above their grade levels in school.

“You can trust Black moms to do what is they need for their families,” Nyandoro said of the results. “We don’t have to have all of these layers of bureaucracy in order to just give families the support that they need.”

$500 per month as a ‘financial vaccine’

Michael Tubbs, former mayor of Stockton, California.

Nick Otto | AFP | Getty Images

This week, Stockton’s SEED program also released the preliminary results from its program, which started in 2019. It gave 125 of the city’s residents $500 per month for 24 months.

The results showed that program participants were twice as likely to find full-time work compared to people who were not part of it. Furthermore, participants also said they were better able to handle emergency expenses and saw improvements in their physical and mental health.

The money was mostly used for food, sales and merchandise such as home goods or clothes, utilities and car costs, according to the data. Alcohol and tobacco represented less than 1% of the spending.

“What stuck out to me was how right we were when we talked about how no $500 would replace work, but allow people who choose to do so to work more stable jobs,” said Michael Tubbs, founder of Mayors for a Guaranteed Income and former mayor of Stockton.

The data released this week show the effects of the first year of the program. Full results due in 2022 will show how the program impacted participants during the pandemic.

“We know that the $500 acted as a financial vaccine for folks who received it,” Tubbs said.

“I’m sure their outcomes during Covid-19 will be far better, sadly, than folks who weren’t able to be part of the program.”

Guaranteed income vs. universal basic income

A sign supporting Democratic presidential candidate Andrew Yang’s plan for a $1,000 monthly universal basic income at a May 14, 2019, rally in New York.

Drew Angerer | Getty Images

Both Nyandoro and Tubbs hope to see the concept of guaranteed income embraced on a federal level.

To be sure, these kinds of policies have attracted fierce criticism as well as support.

Baker remembers how people told her she was crazy when she first started working with the Stockton project.

“I was told I was risking my career as a researcher,” Baker said. “The amount of pushback we got was unlike anything I’ve ever experienced in my career.”

Now, the pandemic has only shed light on the urgent need for these kinds of programs, Baker said.

Mayors are acting first because they don’t have the luxury of time, she said. But there could be bipartisan interest in providing more aid to families on the federal level.

Yet it’s still unclear whether that would be in the form of guaranteed income or universal basic income, according to Baker.

Universal basic income, whereby everyone receives a certain amount of money, has its share of critics.

One of the problems is that the support based for universal basic income is divided, said Daron Acemoglu, institute professor at Massachusetts Institute of Technology’s department of economics.

Some want substantial universal basic income on top of the government aid programs that already exist. Meanwhile, others want to eliminate those benefits in favor of flat payments to everyone.

“That inconsistency, I think, is dangerous,” Acemoglu said.

To date, the experiments taking place in the U.S. are guaranteed income. The advantages of those is that they are targeted, and therefore cost less.

“The world has changed,” Acemoglu said. “We haven’t updated our safety net, fiscal policy.”

Before a national policy is adopted, more testing should be done, he said.

“I think we need a lot more knowledge about what works, what will be effective, what will help poor families most effectively, so experimentation is great,” Acemoglu said.

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Senate Democrats move immediately to “Plan B” on minimum wage

Senate Democrats are racing to finalize a new tax provision that would penalize large companies that pay low wages. The move comes after Senate Parliamentarian Elizabeth MacDonough ruled Thursday night that a $15 minimum wage hike cannot be included in the Senate COVID relief package, which is currently being pushed through the chamber through a process known as budget reconciliation. 

The plan being drafted by aides to Senate Finance Committee chair Ron Wyden of Oregon — in close consultation with Senate Budget Chair Bernie Sanders of Vermont — would impose a 5% payroll tax penalty on “very large” companies that do not pay workers a certain amount. That amount is still unclear: Wyden favors $15 an hour, but is currently seeking feedback from fellow Democrats on that figure and on exactly which companies would face the penalties. 

“Everyone in the caucus is envisioning ‘very large’ companies – think Walmart, Amazon,” a Senate Democratic aide told CBS News.

Under the proposal, which Senate Democrats hope to finish crafting by early next week, smaller businesses that raise their workers’ wages would be eligible for income tax credits equal to 25% of wages — up to $10,00 per employer to year — tax incentives to increase wages. 

“Basically we’re having the stick approach for the very big companies at the top, and the carrot approach for the smallest of small businesses to try to encourage them to raise wages on their own,” the aide said.

Democratic aides, anticipating an adverse ruling from the Senate parliamentarian, began quietly working on the “Plan B” proposal several weeks ago. The tax penalties would apply not only to large companies that pay their own employees low wages, but also to those that hire contractors – such as security guards – who earn low wages for work they do on premises. 

House Speaker Nancy Pelosi on Friday stressed the importance of the minimum wage hike, saying at a press conference that “we will not rest until we pass the $15 minimum wage.”

The new push comes one day after Sanders announced that he would introduce an amendment to the COVID relief package to “take tax deductions away from large, profitable corporations that don’t pay workers at least $15 an hour and to provide small businesses with the incentives they need to raise wages.”

The White House acknowledged the new effort Friday without endorsing or rejecting it. “We haven’t reviewed the measure. We are certainly aware… But we have not reviewed and we don’t have a final conclusion on that proposal,” White House Press Secretary Jen Psaki told reporters aboard Air Force One. 

House Ways and Means Chairman Richard Neal, whose House COVID relief bill does contain a $15 federal minimum wage hike, was also reluctant to weigh in. “I hesitate to, you know, to say anything until they decide on a strategy. I don’t want to be perceived as second guessing what they’re doing,” Neal said Friday. 

Jason Furman, who served as chair of President Obama’s Council of Economic Advisers, sounded a note of caution, tweeting “this is a really big, complicated, brand new proposal. It is *possible* that it works. It is also *possible* that another tax version works. But I would be extremely nervous about trying out a brand new idea like this with virtually no vetting.”

House progressives were more enthusiastic about the tax proposal, but cautioned that it was no substitution for a true minimum wage increase. “I’m very supportive of doing whatever we can, but at the end of the day we promised a $15 minimum wage, so if that $15 min wage isn’t in this package, we are going to have to figure out a way to get it through and if that means reforming the filibuster, then we should reform the filibuster,” Congresswoman Pramila Jayapal (D-WA) told reporters.

This tax measure, which would be included in the $1.9 trillion COVID relief bill, would have to win the support of two moderate Democrats – West Virginia’s Joe Manchin and Arizona’s Kyrsten Sinema – who opposed including an across-the-board $15 minimum wage in the COVID relief bill.

Republicans are likely to balk at any proposal that involves imposing new taxes, even if those penalties would only apply to the nation’s largest companies. On Friday, House Minority Leader Kevin McCarthy called the proposal “stupid,” and Senator Pat Toomey of Pennsylvania slammed it as “wealth redistribution and social engineering. It is a bad idea.”

Democratic Congresswoman Alexandria Ocasio-Cortez told reporters on Friday that the inclusion of a minimum wage hike had “smoothed over the negotiation on this process” for progressives in the House.

“I think that Senator Sanders is doing the right thing by trying to include something, last minute, because the fact of the matter is that these negotiations, the entire negotiations of this package, for a lot of people, were predicated on the $15 minimum wage,” Ocasio-Cortez said.

Ocasio-Cortez also challenged Democratic Senator Joe Manchin of West Virginia, who has expressed opposition to raising the minimum wage to $15 and has instead suggested that it be raised to $11 per hour.

“His own constituents, West Virginians, want a $15 minimum wage. So I don’t even see what kind of leg he’s standing on here where the majority of his own state doesn’t agree with him,” Ocasio-Cortez said. A February poll by the One Fair Wage Coalition, a group which supports a minimum wage hike, found that 63% of West Virginians support raising the minimum wage by 2025.

Raising the minimum wage is widely popular across the country, with a 2019 poll by the Pew Research Center showing that 67% of Americans support raising the minimum wage to $15. It even has support in some red states, as demonstrated by a ballot initiative in Florida to increase the minimum wage increase to $15 by 2026, which passed with support from more than 60% of voters in the last election. 

Some Republicans have taken note of the public support for a minimum wage hike. On Friday, Republican Senator Josh Hawley of Missouri announced a proposal to require companies with revenues of $1 billion or more to pay their employees $15 per hour.  

Under Hawley’s plan, small business employees who earn less than $15 per hour would qualify for a “Blue Collar Bonus” in the form of an automatic tax credit. “Mega-corporations can afford to pay their workers $15 an hour, and it’s long past time they do so,” Hawley said, “but this should not come at the expense of small businesses already struggling to make it.

Sarah Ewall-Wice contributed reporting.

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