New fronts in US activists’ fight to raise poverty pay

http://www.theguardian.com/society/2015/mar/24/us-activists-fight-raise-poverty-pay

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Every now and then a report comes along that hits some very important nails right on the head, at just the right time. Such was the case this month with Off the Deep End: The Wall Street Bonus Pool and Low Wage-Workers from the Institute for Policy Studies (IPS) in Washington DC. Drawing on the latest figures from the New York state comptroller, the report revealed that in 2014 Wall Street bonuses were nearly double the combined annual earnings of more than a million full-time, minimum-wage workers.

Think about this: 167,800 employees of these banks shared bonuses worth $28.5bn (£19.2bn), a 3% rise on 2013 (despite a 4.5% fall in profits year-on-year) while 1,007,000 low-wage workers were struggling to make ends meet on a federal minimum wage of $7.25 per hour (£4.88). Even more incredibly, the report points out: “The size of the bonus pool in 2014 was 27% higher than 2009, the last time Congress increased the minimum wage.”

These staggering earning gaps between the rich, including bankers, and everyone else (never mind the lowest paid) shed light on rising inequalities while niftily engendering discussions about fairness, especially in the light of who caused the crisis and who has ended up paying for it. But with the UK government confirming that the statutory minimum wage will go up by 3% to £6.70 an hour in the autumn, while others, including the Green party, are calling for it to rise to £10 – and as US workers’ battles to increase the minimum wage are spreading rapidly across the US – the issue of paltry pay levels for the working poor is especially salient.

If a recovery is really under way, why do so many people still feel poor and why are so many in minimum-wage jobs?

In the US, following what can only be described as truly impressive grassroots activism, plus a healthy dose of political leadership in the case of several local politicians, some US cities have already introduced increases to the minimum wage well above the federal threshold (to $15 in the case of San Francisco and Seattle). Marches, protests and calls for reform of the financial sector have helped to keep the issue on the national agenda. Next month, on 15 April, the latest front in the fight to improve the lot of millions of US workers on poverty pay will start with a series of public actions organised by Fight for $15, a collective of workers’ organisations. The group sums up what’s at stake this way: “Millions of underpaid workers can’t support their families or make ends meet on hourly wages that haven’t kept pace with the bills – or their employers’ profits. On 15 April fast food cashiers and cooks, retail employees, homecare providers, airport workers and all of us who believe they deserve better are showing up in cities across the country to say, ‘Enough’.” It’s an inspirational call to action.

Workers in the US – and the UK as the election looms – are asking themselves the same questions: if an economic recovery is really under way, why do so many people still feel poor and why are so many grafting away at minimum, and even below minimum-wage, jobs? And, with soaring executive pay once again in the headlines, who exactly is the recovery for? Off the Deep End’s author, Sarah Anderson, homes in on one of the most crucial issues when it comes to discussions around fair pay: that people on lower incomes (unlike the well-off) tend to spend what they earn right away “to meet basic needs”, thereby instantly stimulating demand and the economy.

Anderson’s research underscores the need for financial reforms to rein in runaway bonuses while improving wages for the most poorly paid. She says one of her main hopes is that her research can be a tool for the activists fighting for better pay so that the next time they hear: “We can’t possibly afford to raise the minimum wage,” they have robust data to respond with. In reality, the minimum wage should be much higher than £6.70 in the UK and $15 in the US and, as Anderson writes in her report, “The size of the Wall Street bonus pool puts these figures in perspective.”