Wal-Mart – Chicago Newstips by Community Media Workshop http://www.newstips.org Chicago Community Stories Mon, 14 Jul 2014 17:31:05 +0000 en-US hourly 1 https://wordpress.org/?v=4.4.12 Don’t fear 15 http://www.newstips.org/2013/08/dont-fear-15/ Thu, 29 Aug 2013 23:07:21 +0000 http://www.newstips.org/?p=7652 With fast-food and retailer workers striking in 58 cities Thursday — a dramatic increase over the seven cities where similar actions took place last month — calling for a $15-an-hour wage, here’s an interesting historical note:

Fifty years ago, when Martin Luther King spoke at the March on Washington, one of the demands was a minimum wage increase from $1.15 to $2 an hour.  That would be just over $15 in today’s dollars.

In case we’re tempted to get carried away with this “dream,” the Chicago Tribune offers us University of Chicago economist Allen Sanderson’s advice: “Don’t fight for 15.”

All in all, it’s a pretty thorough demonstration of how far the dismal science can stray from any connection with reality.

First of all, he warns that if workers become too expensive, they risk being replaced by automation.  In fact, though, it’s really hard to imagine how much more automated McDonald’s could be.   Or to picture computerized checkouts at Macy’s.

He suggests higher wages would mean even higher unemployment rates for minority teens.  That might be a factor if there were a better job market for older people, but there isn’t — especially with an economy that is quickly replacing middle-class jobs with low-wage ones.

More than half of new jobs are in low-wage retail and hospitality sectors, according to the Chicago Political Economy Group.  And the number of college graduates earning minimum wage is steadily growing.

In fact the surge in youth unemployment came before the 2008 crash, while the economy was growing (not very fast), as federal funding for youth jobs was eliminated.  As we noted at the time, it was the first economic recovery in which youth unempoyment increased.  That was without a minimum wage hike, too.

Really poor?

Sanderson then looks into the “claim” that “one can’t live on $8.25 an hour and that someone working full-time would be in poverty.”  Not true at all, he says — a full-time minimum wage worker earns $16,500 a year, a generous $1,000 above the federal poverty level for a two-person household.

Of course, if the full-time worker had two kids rather than one, the family would be at about 20 percent below the poverty level.  Which is not exactly quibbling.

But the reality is that only about one-third of minimum wage workers have full-time jobs.  That’s one of the reasons fast-food workers want a union — so they can negotiate over things like scheduling.

And the poverty level is widely discredited.  It was developed in the 1960s and is based on a moderate food budget, multiplied by three.  But since then other costs — particularly housing and health care — have grown at a much higher clip.

In 2009 the Social Impact Research Center of the Heartland Alliance estimated (pdf) that in order to meet basic needs in Illinois — housing, child care, food, transportation, and health care — using tax credits but not public benefits (with no allowance for leisure, travel, or emergencies), a single parent of two children would have to earn $23 an hour.

WBEZ recently profiled a part-time Macy’s worker who earns minimum wage plus commissions.  She also works second part-time for minimum wage as a telemarketer.  She’s got four children and a partner who also works a minimum wage job.  She’s also on food stamps and Medicaid.

“At the end of the week, I still don’t have enough money to put food on the table and clothes on my children’s back,” she says.

Who pays?

A crucial question, Sanderson says, is who will end up paying for these wage increases.  Will it be stockholders with lower returns, or customers with higher prices?

We looked at this a couple weeks ago, when the Tribune asked whether customers would be willing to pay higher prices to cover higher wages — but failed to give any idea of what those prices might be.  You’d think an economist would be interested in this detail.

Economists Jeanette Wicks-Lim and Robert Pollin of the University of Massachusetts have indeed looked into this — they say a $15-an-hour wage for McDonald’s workers would raise the average  price of a Big Mac by 22 cents.  Ouch!

How about McDonald’s shareholders?  According to Paul Buchheit, the corporation’s profits average out to $18,200 per worker.  There’s certainly room to pay a little more without too much pain at the top.

But there’s another question that’s just as crucial, which never seems to get asked: who pays for the low-wage economy?  Besides Macy’s workers who can’t quite cover food and clothes, that is.

Who pays for the food stamps and Medicaid to supplement Macy’s minimum wage?  Who pays the $5,815 a year that an average Wal-Mart worker gets in public benefits?

First in line, of course, are taxpayers — which in Illinois disproportionately means individuals over corportions (the state leads in several outmoded tax loopholes for corporations, and two-thirds of corporations in the state pay no income tax), and with our regressive tax structure, it means moderate-income taxpayers bear a heavier burden.

Right after that come all the residents who don’t get the services they need — like the hundreds of thousands who’ve had their health care cut, including hundreds of medically-fragile children and many others shunted into nursing homes.  Or the thousands of Chicago schoolchildren who don’t have libraries or art teachers.

Because Macy’s and Wal-Mart need our tax assistance in order to keep their wages low.  (And please don’t ask them to pay more taxes!)  Why aren’t the deficit hawks at the Tribune screaming about that?

Beyond that, everyone who’s waiting for the economic tide to rise — all the unemployed, underemployed, and discouraged workers, all the small businesses that are barely hanging on — would be helped by the immediate boost to our economy of higher wages for a major sector of the workforce.  Workers with a little extra money will spend it, and that’s good for everyone.  The Center for Tax and Budget Accountability has estimated that a $2 boost to our minimum wage would inject $2.5 billion into the state economy and generate 20,000 jobs.

That could even help get more people shopping at places like McDonald’s, or at Macy’s and Wal-Mart — all reporting declining sales, all citing slack consumer demand.

Instead, our political and opinion leaders are forcing us into a downward spiral of growing low-wage work, anemic job creation, and increasing austerity in public services.

The members of the Workers Organizing Committee are displaying remarkable courage, standing up for themselves and their families in a threatening economic environment, with little besides their own solidarity and nerve to sustain them. In fact they are standing for a better economy for all of us.

Meanwhile the defenders of the status quo deploy every scare tactic they can to get them to back down.

My guess is that’s not going to work.

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The invaluable Dirt Diggers Digest gives an overview of McDonald’s history in light of Thursday’s strike –including union resistance when the company initially tried to move into San Francisco and Detroit in the 1970s, McDonald’s role pushing for a lower minimum wage for teenagers, and its resistance to efforts to ensure that farmworkers picking its tomatoes are paid decently.

“More than any other restaurant operator, [McDonald’s] has worked to suppress pay rates, enforce harsh work procedures and prevent unionization. In other words, it epitomizes everything that the current strikes are trying to change.”

But “McDonald’s response to the farmworker campaign shows that, when put under enough pressure, it will make concessions.”

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Int’l Women’s Day: spotlight on low wages, sexual harassment http://www.newstips.org/2012/03/intl-womens-day-spotlight-on-low-wages-sexual-harassment/ Wed, 07 Mar 2012 23:08:43 +0000 http://www.newstips.org/?p=5989 Two events will highlight the concerns of women workers on International Women’s Day:  a rally at the Chicago Board of Trade highlighting low wages for women janitors paid by the highly profitable and tax-favored CME Group; and a hearing in Joliet focused on retaliation against women warehouse workers complaining of sexual harassment, including a case where a complainant was herself arrested.

Janitors represented by SEIU Local 1 will rally at the Board of Trade on Thursday, March 8 at 3:30 p.m. and march from there to the Willis Tower. Contract negotiations are starting for 13,000 area janitors, including 4,000 at downtown office buildings, whose contract expires April 8.

With annual pay ranging from $24,000 to $31,000, area janitors are classified “very low income” under HUD’s standards, and earn $20,000 or more below the Economic Policy Institute’s estimate of the cost of living for a family of four, according to Nell McNamara of Local 1.

The union is casting the issue as one of income inequality, noting soaring salaries and bonuses for CEOs while Chicago has the third highest poverty rate and the highest racial income disparity of any major U.S. city.

Janitors are calling on wealthy corporations “to do their part,” said McNamara.  “When hard-working people have good jobs with benefits, we’ll begin to restore balance to our economy and vitality to our neighborhoods.”

In December the state passed an income tax break worth $85 million a year to CME after the corporation threatened to leave town.  In 2009, Willis Tower benefited when United Airlines got a $31 million TIF subsidy to move its corporate headquarters into the building.

Arrested for complaining

In Joliet, in response to an increasing number of complaints of sexual harassment by women workers at warehouses in the area, Warehouse Workers for Justice is holding a hearing on Thursday at 7 p.m. at Mt. Carmel Church, 205 E. Jackson.

A panel including a Will County Board commissioner and a Joliet City Council member will hear testimony from warehouse workers and from experts.

WWJ started hearing complaints after taking on the case of a woman working at Partners Warehouse in Elwood.  When she and her mother went to police to file charges of sexual assault against a supervisor, they were arrested and charged with filing a false report, said Mark Meinster of WWJ.  Police have not investigated the woman’s charge, he said.

The woman and her mother were subsequently fired, and they’ve filed a civil case charging retaliation, Meinster said.

Among other warehouse workers expected to testify Thursday are employees at Wal-Mart’s Elwood warehouse, he said.

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What corporate tax loopholes cost Illinois http://www.newstips.org/2012/02/what-corporate-tax-loopholes-cost-illinois/ http://www.newstips.org/2012/02/what-corporate-tax-loopholes-cost-illinois/#comments Tue, 21 Feb 2012 23:18:41 +0000 http://www.newstips.org/?p=5690 With Governor Quinn set to call for major Medicaid cuts Wednesday, a new report says Illinois is losing hundreds of millions of dollars a year through corporate tax loopholes that other states have closed.

Indeed, Illinois leads the nation in revenue lost through several of the tax breaks, according to a report from Good Jobs First and Make Wall Street Pay Illinois.

The biggest loophole is the accelerated depreciation deduction, which costs the state more than $1 billion over three years – far more than any other state, according to the report.

The Illinois deduction is based on a tax break granted by the federal government, designed to encourage capital investment by allowing companies to write off new equipment immediately rather than over its expected lifespan.  Most states have “decoupled” from the federal measure.

“Forgoing revenue in the short term to help stimulate the economy is possible for the federal government because it is allowed to run a deficit,” according to the report.  “But for the states, with their balanced-budget requirements, such revenue loss during a recession would only force deeper budget cuts.”

Small businesses are covered by a separate deduction and wouldn’t be affected by decoupling, the groups say.  Decoupling from the accelerated depreciation deduction has been advocated by the Center for Tax and Budget Accountability (see Newstips from 2008 and 2011).

A break for Wal-Mart

Illinois could bring in $115 million a year by eliminating the sales tax “vendor discount,” a relic of the pre-computer age that gives retailers a portion of sales tax revenues to cover handling costs.  The groups estimate that Wal-Mart took in nearly $10 million from sales taxes paid by Illinois shoppers last year.

The state loses at least $63 million a year by using the single sales factor, which eliminates corporations’ taxable property and payroll share as factors in figuring income tax bills, instead using only their in-state sales.  Large manufacturers lobbied for the loophole, arguing it would create manufacturing jobs.  It hasn’t.

The formula can reduce the tax rate of Illinois-based corporations with significant production, payrolls, and property holdings here  but mostly out-of-state sales by 80 or 90 percent.

“We expect that the governor and general assembly will adopt a budget that protects revenue sources and provides for the educational, health care and infrastructure needs of the people of Illinois,” said Rev. Maggie Pagan-Banks of A Just Harvest, part of Make Wall Street Pay. “While the state is struggling to meet critical obligations to its citizens, it cannot afford to simultaneously subsidize corporate profits.”

At Clawback,Greg LeRoy of Good Jobs First, the report’s co-author, highlights recent layoffs at Sears’ Hoffman Estate headquarters – announced weeks after a $275 million property and income tax break designed to keep Sears here – calling it “the latest evidence that unaccountable tax breaks fail to promote investment for job creation.”

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Warehouse workers say Wal-Mart has to pay up http://www.newstips.org/2012/02/warehouse-workers-say-wal-mart-has-to-pay-up/ Wed, 15 Feb 2012 21:51:46 +0000 http://www.newstips.org/?p=5663 Workers fired from a Wal-Mart warehouse near Joliet after they filed a lawsuit charging wage theft say the company  has to stop hiding behind subcontractors and take responsibility for correcting legal violations.

Backed by Warehouse Workers for Justice  and joined by community supporters, they’ll deliver a complaint to Wal-Mart representatives at the new Wal-Mart Express store in Presidential Towers tomorrow (Thursday, February 16, 12 noon, Monroe and Jefferson).

In November, workers hired by Eclipse Advantage to staff the Wal-Mart warehouse filed suit charging they were paid below minimum wage and shorted on hours.  On December 29, 65 warehouse workers were informed that Eclipse was being replaced and they were out of a job.

On February 1 they filed a federal class-action lawsuit charging Eclipse had violated the federal WARN Act which requires 60 days notice for a mass layoff.   Their lawyers argue that while they were hired by a temporary agency, they were long-term employees (or “permatemps”). They also amended the original lawsuit, charging that they had been fired in retaliation for complaining about wage theft, in violation of state law.

They’re now filing a formal complaint with Wal-Mart charging that its subcontractor violated the company’s code of conduct for suppliers and demanding that workers be hired back and paid the wages they’re owed.

Corrective actions

Earlier, Wal-Mart seemed to suggest that Eclipse was replaced in response to workers’  allegations.

“We hold all of our vendors to high standards, and our expectation is they comply with all applicable laws,” spokesperson Greg Rossiter told WBEZ. “Our vendors, such as Schneider, may take whatever corrective actions may be necessary.”  Schneider manages Wal-Mart’s warehouse and contracted with Eclipse for personnel services.

Warehouse workers aren’t buying that.

“Somebody has to pay these workers the money they are owed,” said Mark Meinster of WWJ.  “If the firing was retaliatory, Wal-Mart has to correct the situation. Just putting these people out on the street is not a solution.”

Schneider manages other Wal-Mart warehouses, and in January a federal judge blocked the firing of 100 workers who had complained about wage violations at a California warehouse managed by Schneider.  California labor inspectors had previously fined a staffing firm hired by Schneider for failing to provide itemized wage statements and shorting workers’ paychecks.

In Chicago tomorrow, workers will be backed by members of Chicago Neighborhoods First, a new coalition of business, labor, environmental and community groups that promotes “community-driven economic development” and corporate accountability.

The group includes community organizations in Austin, Chatham, and Pullman, all neighborhoods where Wal-Mart has built or is building new stores.

“If Wal-Mart wants to be part of Chicago, then Wal-Mart must ensure workers are paid what they are owed and that no retaliation takes place,” said Elce Redmond of the South Austin Coalition.

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