Wall Street Journal Letter to the Editor regarding the minimum wage

I had a letter to the editor published in the Wall Street Journal today regarding the connection between the minimum wage and public assistance programs:

If raising the minimum wage didn’t reduce poverty, then it wouldn’t be shown to shrink public-assistance programs. Yet economists Rachel West and Michael Reich have illustrated how a raise to $10.10 would save taxpayers $4.6 billion in food-stamp outlays. This is in sharp contrast to Mr. Neumark’s proposal to only increase the EITC, which, though an admirable program, would result in more corporate welfare—taxpayers subsidizing the poverty wages of profitable mega-corporations. In the words of conservative Ron Unz: “Doesn’t it make more sense for employers to pay their workers than the government?”

Pete Davis

Time for a Raise Campaign

Center for Study of Responsive Law

Washington, D.C.

D.C. living wage campaign spotlighted in Post

The Washington Post ran a story on the D.C. living wage movement that we at Time for a Raise are part of:

States and municipalities across the country are leading a localized push to raise the minimum wage, driven largely by Democrats, who see an opening to appeal to working-class Americans at a time of growing inequity.

Efforts in Congress to raise the national minimum wage above $7.25 an hour have stalled. But numerous local governments — including those of Montgomery and Prince George’s counties, and the District — are forging ahead, in some cases voting to dramatically increase the pay of low-wage workers.

Pete Davis, an analyst with the Center for Study of Responsive Law, a think tank headed by liberal activist Ralph Nader, said a lack of uniformity is a poor reason not to take action. “The D.C. area has one of the highest costs of living in the nation, so it makes sense that they are going to lead the charge on fighting back on inequality,” he said.

Elrich said he is also fine with pricey urban areas having different minimum wages than more rural ones, where the cost of living is lower. “What’s right for Montgomery or the D.C. region as a whole may not be what’s right for another jurisdiction,” he said.

The political ramifications of the Washington jurisdictions’ effort are likely to be clearer than the economic ones.

A local D.C. economy already under intense scrutiny for its ties to the federal government will be even more so as partisan observers try to determine whether every job lost or gained relates to some of the nation’s highest minimum-wage requirements.

And Davis said he sees the effort as the start of something bigger, especially for urban areas: “When a region like D.C., Prince George’s and Montgomery can do it, and they are successful, people are going to start to realize you can do it in New York and Chicago and Dallas and across the country.”

Speech on Walmart and Living Wages at ‘Town Hall for a D.C. Living Wage’

Yesterday, in my role as campaign director of Ralph Nader’s Time for a Raise campaign, I spoke at District of Columbia councilman Vincent Orange’s ‘Town Hall for a D.C. Living Wage.’ Here’s the recording of the speech:

Here’s the transcript of my talk:

Hello everyone, good evening! I wanted to start with a big thank you to Councilman Orange, Councilman Mendehlson and Reverend Dr. Curry for having us here today and I want to thank, most importantly, you for showing up. You are living proof of the phrase we like to say around the office: “politicians work for you, but only if you show up to remind them!”

The living wage issue is an important one here in D.C. In fact, it is so important that Steven Restivo, Wal-Mart’s PR guy, sent an email to reporters today about this very event. He begins the email with “at tonight’s labor rally” — I don’t know what that means, but we’ll take it; that’s not a pejorative to us! — “you’ll likely hear the usual urban myths about Walmart.” Again, a strange use of words from Walmart: I’ve heard about the phrase “urban legends” — alligators in the sewers, you know — but, urban myths coming out of Southeast… strange words, Steve.

This is all coming from a guy who goes around giving talks to business group about how they can replicate his success in creating spin campaigns that silence critics and morph public opinion. But, I guess, according to him, corporate PR spin campaigns aren’t urban myths.

So, in response to Steven, I’d like to take a few minutes to not talk about myths, but rather to talk about some facts — you can call them urban facts, rural facts, suburban facts, whatever you want to call them — the point is: they’re reality, they’re not rhetoric.

We’ve been working on raising the federal minimum wage for the past year at our office in the Time for a Raise Campaign. We’ve discovered some things along the way that apply to this fight in D.C. and I’d like our discoveries with you. Here’s four facts:

Fact #1: Walmart’s top executives penny pinch on every wage but their own. Walmart CEO Mike Duke makes $11,000 an hour plus great benefits and perks. That means that, during the length of this meeting, he will make more than most Walmart workers make working a full year. Walmart likes to say “Save Money, Live Better” but it seems like the Walmart top brass save money on the backs of low-wage workers, so that they can Live Better. Given these facts, I got a question: Is it fair for Walmart to say it cannot afford to pay workers in D.C. $12.50 an hour minus benefits?

Fact #2: Companies like Wal-Mart are profitable while paying their workers respectable wages. Take Costco, for example: it starts its workers at $11.50 an hour plus benefits and they’re more profitable than ever. The Wal-Mart PR rep in this audience today likely — hiding in a corner, scratching out notes about what we’re saying, taking names — is probably writing down: “Oh we got ‘em! Costco has a different revenue model than Walmart, because you buy in bulk and have a $25 membership card.”

But wait: you know what doesn’t have a different revenue structure than Walmart? Walmart Canada, which starts its workers at $10.25 in Ontario. But they must notice it’s not profitable there in ontario so they don’t build there! But Ontario has 110 stores! And they say they can’t open up stores in D.C. because of a high minimum wage, but they’re opening up new superstores in Manitoba (at $10.25) and Quebec (at a $10.15).

Okay, the PR rep in the corner now saying, “Wait! Canada has all these government benefits and the conversion rate isn’t exactly one-to-one…there they go, labor rallyers spreading your urban myths! But wait, we have a city in America that stood up to poverty wages — Santa Fe, NM. Their minimum wage is $10.50 and it goes up every time inflation goes up. And, lo and behold, at 3251 Cerrillos Rd in Santa Fe there is a Wal-Mart!

“But, a ha!” says the PR rep. “More urban myths!” That might have been there already before they passed it. We’ll never go there again because it’s not profitable anymore. So, I was worried about that, so I called up that Wal-Mart earlier today and this kind lady picked up — New Mexico, Santa Fe charm, you know — and I asked, “Hey, any new Walmarts in Santa Fe?” and she responded, “Oh yah, they just built one on Herrera Drive two years ago”…after the wage bill was passed.

So given these facts — that Costco and Wal-mart Canada are profitable with higher wages, and that Walmart is so confident in the profitability of Wal-marts at a higher wage that they built one two years ago in the city with the highest minimum wage — I have a question: What is stopping Walmart from treating Walmart workers in the District of Columbia with the same level of respect?

Fact #3: Wal-mart can raise their wage without drastic changes to their customers’ experience. A study from UC Berkeley’s Center for Labor Research and Education has shown that raising a Walmart wage floor to $12 per hour would add to every trip — if all of the costs were passed on to customers — just 46 cents.

And this is the highest estimate, presuming that all the wage increases are reflected in the price, because they have a choice: they could put it into the price or they could in their profits. See Walmart tell you, “Well, shucks, we may be a big corporation, but we have razor thin margins every year.” But remind them of this: Walmart has had $51 billion in stock buybacks over the past five years. And since over 50% of the company stock is owned by the Walton family, the result of this is simply just billions of dollars transferring from the Walmart bank account to the bank account of the richest family in America. It’s ridiculous! So, another question: Why does Walmart have $51 billion lying around to buy stock but empty pockets when it comes to paying $12.50 an hour minus benefits to D.C. Workers?

Fact #4: Low wages cost taxpayers and the economy. As low-wage workers fall further into poverty, they become more reliant on public programs like food stamps, Medicaid, and welfare to get by. And we’re to provide it, but in this sense, taxpayers and small businesses foot the bill for the low wages paid by Walmart. According to a recent report, a single 300-employee Wal-Mart Supercenter may cost taxpayers about a million dollars a year because of their low wages.

And, on the other end, higher wages serve as an economic stimulus. The Chicago Federal Reserve estimated in 2011 that every dollar increase in the hourly pay for a minimum wage worker is $2,800 in new consumer spending from that worker’s household over the year. We know it to be true, it’s common sense: a dollar in the hands of low wage worker is better for the D.C. economy than it being another blip in a corporate bank account.

So there’s some facts. Now, the spin machine is going to try to mask these facts with some misinformation.

For one, they might say raising the minimum wage will increase unemployment! But this does not hold water. Studies before the 1990’s most economists thought that a moderate minimum wage increase did raise unemployment. But in the 1990’s, there was as sea-change and most studies on the topic conclude that there was not a significant employment effect from a moderate increase in the minimum wage. These results have been reproduced throughout the next two decades.

The spinmeisters might say, “the minimum wage only affects teens working part-time.” But most of the beneficiaries of minimum wage increases are adults, female and members of low-income working families.

They might say we should be happy with just having a job… who cares if it’s a good job? For example, Fox News Host Neil Cavuto said: “Only in America today, can our politicians bemoan a livable wage, forgetting a lot of folks would be grateful for any wage, any chance, any job, anytime. All I know is as soon as I turned 16 and heard a fast food chain called Arthur Treacher’s was opening a store in my town, I stood in a line for a position — any position. I got the job… and it all started at two bucks an hour.”
But what Cavuto doesn’t get is that when he was 16 in 1974, his $2 an hour is $9.47 today, $1.22 more than D.C.’s minimum wage. So, we’d be a bit happy with that! And what we’re asking for with this bill is just $2.64 in 1974 Cavuto-dollars!
And even more, what he doesn’t get is that being 16 and living with your parents is much different than the reality of most low-wage workers here in D.C. If you work every week of the year at $8.25, all you get is $17,160 a year, which is below the poverty line for a family of three.

Opponents like to say that this is just a training job: if you want a better job you can find a better one. But the fact of the matter is, the fastest growing jobs are in low-wage industries: retail, food services, home health care. During the recession, middle-wage jobs were lost and during the recovery, low-wage jobs are being gained. If retail, food services and home health care are where the jobs are growing, then they have to be good jobs if this economy is going to work for everybody.

I want to end with this thought. Behind all this back-and-forth, these numbers, these claims, is the real reason we care about good wages in D.C. We care about good wages because good wages are about respect. It’s about affirming that in this city, an hour of a worker’s time is worth something… something more than the lowest number they can shake her down to. Her wage should be more than that. Her wage should reflect our community’s respect for her time. The decline in wages over the past decades — a decline that has dropped millions of minimum wage workers below the poverty line — is disrespectful.

We’ve been reminded about how important it is to demand respect this week by the 50th anniversary of the March on Washington. There are those who want to make Dr. King’s dream some rosy “Let’s all hold hands” vision. But, we in this room know that it was so much more than that. We know that that day was called the “March on Washington for Jobs and Freedom.” We know that Dr. King said that a living wage is right for all working Americans. We know that Dr. King’s final campaign was the Poor People’s Campaign. We know that inside the March’s handbook that was printed and handed out to the crowd that August day 50 years ago was a list of “9 goals of today’s March on Washington for Jobs and Freedom” and that the 8th goal was “An increase in the minimum wage to $2 an hour.”

What’s $2 in 1963 worth today, the number Martin Luther King was calling for? $15.27. If Dr. King thought $15.27 an hour was needed for the dream, the least we can do is $12.50. Thank you.

Washington Post Letter to the Editor on Walmart’s poverty wage regime

While working for Ralph Nader’s Time for a Raise campaign, I had a wonky letter to the editor published in the Washington Post today regarding Walmart’s poverty wage regime:

In the July 11 front-page article “Council approves ‘living wage’ bill,” The Post placed front and center the claim that the District’s Large Retailer Accountability Act requires big-box-store employers to pay “a 50 percent premium over the city’s minimum wage,” a phrasing that could have left readers wondering whether the act goes too far. It is important to note, however, that the act calls not for a $12.50 wage but rather a $12.50 wage minus benefits, stating clearly: “The prorated hourly cost of any benefits that a large retailer chooses to provide an employee may be credited toward payment of the minimum hourly compensation required under this act.”

If Wal-Mart gave its District employees the health benefits they deserve, their minimum wage under the act would amount to significantly less than a “50 percent premium” over the current wage. Within the limits of the act, Wal-Mart can pay an hourly wage less than $12.50 if it offers its District workers, as the act states, “benefits related to health care, retirement security, disability, training and education, or paid leave.”

Peter Davis, Falls Church