- Paul Constant is a writer at Civic Ventures and the cohost of the "Pitchfork Economics" podcast.
- He says a wage tracker of hourly pay at major chains reveals why so many workers are unionizing.
- When CEOs make tens of millions more than their employees, workers will fight back through unions.
- This is an opinion column. The opinions expressed are those of the author.
The Economic Policy Institute and The Shift Project jointly released a company wage tracker this week to reveal how major chains are paying their employees. Using data collected from a 2021 social-media survey of workers, this tool allows users to dive into the numbers behind 66 of the biggest employers in the United States today, including name brands like Lowe's, Pizza Hut, and Safeway.
It's not hard to look at those numbers and see why workers have been motivated to unionize and demand a bigger cut of the profits. Since the federal minimum wage fails to support the real-life expenses of many Americans, workers are having to take up the fight on their own.
Consider Starbucks: The tracker tells us that 63% of Starbucks' 225,529 workers earn less than $15 per hour. It's shocking to see how many of the businesses — including Big Lots, Arby's, Dollar General, Marshalls, McDonald's, Taco Bell, and more — pay 80% or more of their workforce less than $15 per hour.
Most of the listings also include the most recent CEO salaries for each of the companies and their annual revenue, further illustrating the wage gap between employees and leadership. For example, Starbucks raked in $23.5 billion in revenue last year and its CEO made just over $5 million. Some 92% of all Dollar General employees make less than $15 per hour, but the chain brought in $33.75 billion in revenue and its CEO earned $58 million in a single year.
Experts differ on what the optimum federal minimum wage would be. Economist Dean Baker reports that had the federal minimum wage kept up with worker productivity, it would now be over $20 per hour. And contrary to trickle-down conventional wisdom, exploitative low wages aren't essential to keeping prices low — McDonald's workers in Denmark make more than $20 per hour and receive six weeks' vacation per year, and the Economist reports that as of December 2021, somehow Big Macs in Denmark cost nearly $1.20 less than we pay for them in American McDonald's.
With stagnant wages, enthusiasm for unions has snowballed among low-wage workers, with successful union elections at an Amazon warehouse on Staten Island and a pair of Verizon stores in Washington state. Earlier this week, five Starbucks locations in Richmond, Virginia, all overwhelmingly voted to unionize.
Workers at a flagship Apple Store in New York have also begun collecting signatures to hold a union election, calling the tech giant to offer expanded benefits and a minimum starting pay of $30 per hour.
Part of the reason workers are advocating collectively right now — and winning elections — is because the job market has been in their favor since pandemic-era lockdowns began to lift and consumer demand started to return to normal. But another motivation for workers is the fact that this summer, the federal minimum wage will have remained frozen at $7.25 for 13 years — the longest period without an increase since the federal minimum wage was adopted in 1938.
Without any serious intervention from Congress or the White House in over a decade, American workers have realized that their leaders aren't going to save the day — it's up to them to fight for the pay and benefits they deserve.
As the federal minimum wage has lagged behind price increases over the last 13 years and lost about 21% of its value, income inequality has soared. Now more than 50 million American workers are struggling to get by on less than $32,000 per year, and that's not just bad for those workers — it's terrible for the economy.
When a third of the workforce has to devote the entirety of their paychecks on rock-bottom essentials like rent, transportation, and just enough groceries to survive, those workers are largely removed from the economy. As we saw during the pandemic, the economy suffers when a large number of people stop spending on so-called nonessential services as it drains local businesses of consumer demand. And millions of low-wage workers simply don't earn enough to make ends meet, much less splurge on extras, and instead rely on public assistance programs to fill the gap.
With each passing day, the $7.25 federal minimum wage becomes further detached from the day-to-day reality of American workers. That lack of regulatory pressure has allowed exploitative employers to suppress wages across entire sectors of the economy for more than a decade, and in response workers feel that advocating for themselves collectively is the only recourse left available to them.
In retrospect, once this historic union push has taken hold around the country, some of the nation's largest employers now throwing millions of dollars into expensive (and seemingly ineffectual) union-busting campaigns might consider a $15 minimum wage to be a bargain.