The U.S. economy churns out low-wage jobs — burger flippers, shelf-stockers, in-home caregivers — at an impressive clip.
Three of every five U.S. jobs created since the end of the Great Recession are low-wage. Nearly 150,000 Georgians earn the minimum wage of $7.25 an hour or less. Their numbers are growing. So is their anger.
“You work so hard for so little money that, by the time you pay your bills, you can’t afford what you need or want in life,” said Zita Malaykhan, who earns $7.50 an hour at an Arby’s restaurant in downtown Atlanta. “It’s stressful. And really aggravating.”
Malaykhan joined tens of thousands of workers across the country Thursday who walked off jobs in protest of low wages. In Atlanta, an estimated a few dozen fast-food workers temporarily left their fryers and cash registers to demand higher wages, as much as $15 an hour.
Many small business owners oppose an increase in the minimum wage citing thin profit margins that could force some out of business. Higher-wage proponents point out, though, that it’s not just low-wage earners affected by low wages.
“If you’re not paying somebody enough to make ends meet, then the taxpayer has to make up the difference,” said Heidi Shierholz, an economist with the liberal Economic Policy Institute in Washington.
Food stamps, for example, supplement paychecks. And, without insurance, health care comes via Medicaid and the emergency room.
A living wage
Frederick Hambrick leaves his Jonesboro home at 5 a.m. to catch a van ($4) to downtown Atlanta, where a bus ($2.50) brings him to a Church’s Chicken on Moreland Avenue. At day’s end, Hambrick retraces his commute, arriving home at 7 p.m.
He makes $8.25 an hour as a cook without a pension or health insurance. An hour and a half is spent each day in front of a chicken fryer just to cover his daily travels.
Hambrick, despite a desire for more hours, works 35 hours per week. His wife works the same number of hours at a McDonald’s in Morrow. Combined, they bring home about $600 a week, which they spend on food, rent, utilities and their two children.
The Massachusetts Institute of Technology calculates a “living wage” – the minimum amount a family of four in Clayton County needs for basic economic survival – at $40,612 a year.
Hambrick and his wife earn about $30,000. Food stamps kick in another $3,600.
“If we didn’t get them, the way food prices keep going up, we’d really be in trouble,” said Hambrick, whose lack of a college education makes it hard to escape low-wage work. “We wouldn’t have enough money to pay the bills. Shoot, we couldn’t make it.”
Hambrick walked off his job for xx minutes Thursday to protest his salary, which has risen 25 cents an hour in four years. He was joined by a few of his co-workers, and a few dozen others at fast-food joints across metro Atlanta. Later that day, at Five Points downtown, 200 restaurant workers, union organizers and community leaders rallied for a $15 an hour paycheck.
The protests, in concert with the Service Employees International Union and community groups, seek to pressure employers to raise the minimum wage and grant employees the right to join unions.
The federally mandated minimum wage is $7.25 an hour, though some states require better pay. President Obama is pushing $9 an hour. More than 170 U.S. House and Senate members seek $10.10 an hour by 2015.
“We think that the labor market ought to dictate what a fair wage is (and) not the federal or state government,” said Kyle Jackson, director of the Georgia branch of the National Federation of Independent Business. “The minimum wage is such a red herring. It’s a fishing expedition by organized labor trying to recruit more members.”
“Wages are competitive”
Hourly workers, who typically earn less and receive fewer benefits and job security, comprise 60 percent of the nation’s 144 million jobs. Retail sales people, cashiers, office clerks and food preparation workers account for one of every eight U.S. jobs.
These “occupations are crucial to the support and growth of major industries across the country, but many of these workers do not earn enough to adequately support their families, even at a subsistence level,” the San Francisco Federal Reserve Bank reported.
In right-to-work state like Georgia, which has low unionization, the fast-food industry plays an out-sized role in the economy. More than 8 percent of all workers – 200,000 in Atlanta alone — work in restaurants and bars, according to the Bureau of Labor Statistics (BLS).
Nationwide, 4.7 percent of all workers earn minimum wage or less. In Georgia, 6.4 percent do, the BLS reports.
At $7.25 an hour, a full-time Atlanta fast food worker would make $15,080 a year. But most hourly workers don’t get 40 hours a week. Malaykhan, who has worked three years for Arby’s, gets no more than 20 hours a week.
“I’m a hard worker, and I do my job, so I really don’t understand why my hours are so low,” she said. “Nobody gets more more than 30 hours a week here.”
Labor economists and others say employers purposefully keep workers below 40 hours to avoid paying benefits.
Arby’s, headquartered in Atlanta, wouldn’t respond to specific questions. In a statement, the 3,400-store fast food giant said: “We greatly value our employees at Arby’s, and we work hard at making Arby’s a great place to work. We make sure our wages are competitive in our markets.”
Jackson, with Georgia’s small business association, said the advent of the Affordable Care Act, which will require any business with more than 50 full-time employees to provide health insurance, keeps the service industry from adding workers.
“Frankly, a lot of these jobs are geared toward first-time entry into the labor market, young people looking to get a job, build skills and resumes,” he added. “Most jobs, like fry cook or burger guy, are not career-type jobs and not designed to support a family.”
Malaykhan, 36, has spent a decade in fast food unable to afford a college education that would boost her employment potential. Hambrick, 51, has worked 15 years at Church’s. The Economic Policy Institute reports that 88 percent of minimum-wage workers are at least 20 years old and that 28 percent have children.
Haves vs. have-nots
Georgia, with an unemployment rate of 8.8 percent, typifies the explosion of low-wage work. A decade ago, only 3 percent of working Georgians earned the minimum wage or less. Last year, more than 6 percent did, according to the BLS.
“If your boss knows you don’t have any outside options, they do not have to offer wage increases to keep you,” said economist Shierholz. “High unemployment just crushes wage growth.”
Wage erosion hit U.S. workers in the 1970s as manufacturing shifted overseas, unions lost clout and corporations made war on production and labor costs. Salaried workers gave way to hourly workers. Recessions eroded middle-wage jobs, too, adding more workers onto the low-wage pile.
Lower wages typically benefit consumers via lower prices. Various studies predict that a $15 an hour McDonald’s wage could add as much as 68 cents to the price of a Big Mac.
Such increases “may not sound like a whole lot of money, but it is for some people working low- and minimum-wage jobs and trying to support a family,” Jackson said.
A continued weak economy and high unemployment will likely lead to more hourly, low-wage jobs, economists say. Fifteen bucks an hour, in this economy, seems unrealistic in Georgia.
Malaykhan would be happy with $10 an hour.
“Low wages put a dividing line between the haves and the have-nots,” said Malaykhan, who shares a one-bedroom apartment in Marietta with two cousins. “It cause so many types of problems in peoples’ personal lives.”