Retailers Finally Addressing Income Inequality

As politicians in Washington and state capitals debate raising the minimum wage, a new report from the Center for American Progress gathers new evidence showing that the United States’ top retailers are deeply concerned that stagnant wage growth and middle-class weakness are holding the economy back.

photo by pix.plz Flickr/creative commons

photo by pix.plz
Flickr/creative commons

We have written frequently about the scourge of income equality, from fast food workers‘ demanding a living wage and Wall Street’s response to connecting you to organizations on the forefront of this struggle, summing it all up this past Labor Day. Now this new report, “Retailer Revelations: Why America’s Struggling Middle Class Has Businesses Scared,” drills down further, showing us how flat wages has weakened consumer spending and put their stock prices at risk because of low demand for goods and services and high unemployment.

Retailers could improve their profits by embracing a middle-class-growth-oriented agenda instead of spending their political energy on preventing policies that increase wages. Policies such as a minimum-wage increase could provide the perfect mechanism for coordinating wage growth that could benefit the entire retail sector by fueling more consumer spending.

While banks have been rescued by our government and economic indicators in some sectors have been revived since the 2008 financial crisis, “median household income in 2013 stood 8 percentage points below its 2007 pre-recession level” while the cost of everything else, from health care to college tuition has risen.

The evidence assembled in this report directly repudiates “trickle-down economics”—the idea that the only way to produce economic growth is to redistribute money to the rich, who will create jobs for everyone else. Conservative politicians, lobbyists, and commentators may still be stuck in the trickle-down mindset of the 1980s, but corporate America and the Wall Street analysts who closely follow it know better.

In fighting income equality we have to aim our civil actions squarely on the proponents of trickle-down economics and those working actively against living wages, including lobbyists such as the U.S. Chamber of Commerce, until they get it. Congress is complicit in keeping the minimum wage low despite all the evidence pouring in from municipalities that have raised the minimum wage to $15/hour and actually created economic growth, including more jobs. These are the people and entities who are responsible. Educate yourself and organize accordingly.




Support Tomorrow’s WalkOuts To Raise Wages

Photo by  Steve Rhodes Flickr/creative commons

Photo by
Steve Rhodes
Flickr/creative commons

Home healthcare workers are joining fast food workers, tomorrow, for walkouts in over 100 cities across America. You can help by coming out to support these actions against mega corporations such as McDonalds and Walmart who enslave workers with poverty wages and stolen wages.

Fast-food workers often have to rely on food stamps to feed their families. This means that the corporations they work for freely rely on your tax dollars to pick up the slack.

These companies also notoriously steal workers’ wages by such practices as making workers wait around before starting their shifts to maintain efficiency ratios and/or routinely requiring extra unpaid hours by workers to clean at the conclusion of their shift.

Conservatives argue that the market should determine wages based on productivity but fail to understand that if that were so the minimum wage would actually be $22/hour in 2014.

Income inequality hurts both the rich and the poor and it is time for everyone to pay more attention to these issues.

Join a walkout tomorrow. You will be glad you did.


For Labor Day: Income Inequality Dampens Economic Growth for Rich and Poor Alike

In tribute to American workers, over half of whom earn less than $15 per hour but deserve so much more, we are reprinting our coverage on income equality. Where the minimum wage is $15 the local economy is boosted, reason alone to join the movement to rectify income equality.

See also: The Wealthy and Powerful Aid Social and Powerful Social and Economic Justice Activists and List of Organizations Working on Income Equality


The non-partisan Congressional Budget Office showed that after-tax average income ballooned 15.1% fro the top 1% of earners, but grew by less than 1% for the bottom 90% of earners. (TIME magazine, August 5, 2014)

reway2007 Flickr/creative commons

Flickr/creative commons

Correcting income inequality is not just a social and economic justice issue. When we talk about income inequality we have to be careful to distinguish it from income equality. Angry right-wing pundits seize on the term, income equality, to scare people with images of anarchy and culture wars.

Rather we are talking about righting a wrong, income inequality, by demanding equal opportunity, especially educational opportunity.

The dollar ratio between managers and workers compensation has increased ten-fold in favor of a few upon the backs of the many (more than 2-:1, two decades ago, to over 200:1, today). That gap in earnings has more and more been based on a widening education gap, which in turn further fuels the economic decline of the middle class and those already in poverty.

How many private homes, yachts, planes, cars, and vacation can you buy, after all? The very rich tend to stockpile their money as just another expensive commodity they can look at in self-admiration, just like Scrooge McDuck.

The overall economy worsens daily, as 90% of us spend, are often forced to spend, most of our income, thereby seeding the economy, while the top 1-9% sits on their excess wealth, again,  earned from the sweat of others. How many private homes, yachts, planes, cars, and vacation can you buy, after all?

There is a report out this week from Standard & Poor’s (S&P) that newly re-arms social and economic justice advocates. S&P is a respected Wall Street ratings entity that helps investors and top earners to become more wealthy through non-partisan presentations of financial facts and predictions. Now it has delivered a hard truth: unequal wealth distribution hurts the overall economy, actually creating recessions, inhibiting investments, and keeping us in harmful boom-and-bust scenarios.

The report cites the education gap as “a main reason for the growing income divide.”

With wages of a college graduate double that of a high school graduate, increasing educational attainment is an effective way to bring income inequality back to healthy levels.”

If we added another year of education to the American workforce from 2014 to 2019, in line with education levels increasing at the rate of educational achievement seen from 1960 to 1965, U.S. potential GDP would likely be $525 billion, or 2.4% higher in five years, than in the baseline. If education levels were increasing at the rate they were 15 years ago, the level of potential GDP would be 1%, or $185 billion higher in five years.

This education gap is a main reason for the growing income divide, and it affects both wages and net worth. From a wage perspective, occupations that typically require postsecondary education generally paid much higher median wages ($57,770 in 2012)–more than double those occupations that typically require a high school diploma or less ($27,670 in 2012).

But you first must have the opportunity to pay for higher education and that’s harder and harder to do as you go down the economic scale. If you care about social and economic justice or just care about a thriving economy or if you are a human capable of logical thinking, you know that major changes that increase access to a college education, without saddling people with decades of student debt, should be a matter of immediate importance.  


Check back tomorrow for a starting list of wealthy and/or powerful people who already understand the problem, and can be tapped to help activists bring this movement further into the mainstream.

Also see: United for a Fair Economy (UFE)  2011 Annual Report 

And, for those who like your info on video, here is Lawrence O’Donnell on MSNBC’s The Last Word, summing up many of S&P’s conclusions . . .



McDonald’s Corporation on the hook

McDonald’s NLRB joint employer ruling

Yesterday’s ruling gives litigants and activists alike a bigger target, and a big boost for fast-food workers’ rights everywhere. 

We like to catalog progress when we see it.

Flickr/creative commons

Flickr/creative commons

The National Labor Relations Board (NLRB) finally came to its senses by ruling that McDonald’s Corporation could no longer avoid complaints from its workers by asserting that they were not responsible for what goes on in their franchised stores, the vast majority of its 14,000 restaurants. This single ruling gives renewed hope and power to dozens of court cases to end unfair labor practices, and to fast-food workers everywhere demanding higher hourly wages.

[C]ompanies have sought to distance themselves from the pay protests by saying they don’t determine wages at its franchised locations.

Besides low wages, McDonald’s employees are imposed on in so many inhumane ways, such as showing up on time only to be asked to wait around on site before clocking in (and being paid) so the restaurant can maintain the company’s closely monitored ratio of labor costs as a percentage of sales.

Activists and labor organizers have always believed that these companies must be accountable because it controls every aspect of how the restaurants are run and how their employees are trained. Now the NLRB agrees with the workers. From now on McDonald’s and other fast-food companies with franchises, such as KFC, Burger King, Taco Bell, and Pizza Hut, will be fully liable for all of its management practices.  

Heather Smedstad, senior vice president of human resources for McDonald’s USA, said in a phone interview that the company has never been determined to be a joint employer in the past and that it would fight the decision by the labor board.

“This is such a radical departure that it should be a concern to business men and women across the country,” she said.


The International Franchise Association also opposes the NLRB ruling, focusing on municipalities that go ahead and enact higher minimum wages (for example, Seattle’s $15.15/hour) and how this hurts these “small businesses.”

Conservative lawmakers, who haven’t allowed a rise in the minimum wage for 5 years, still contend that the market should decide wages and link them to productivity. They have a right to this opinion but not the facts: if wages had been linked to productivity for the last 20 years, the minimum wage would be not $8, not $10, not $15, but $22/hour. Productivity has steadily risen, as have corporate profits, but workers haven’t benefited.

Taxpayers have been bearing the burden of these sub-standard wages because those at the bottom of the pay scale use more government resources, like food stamps, to make ends meet. That means that taxpayers like you and me are subsidizing big companies and complicit in keeping these wages so low.

Not so ironically, minimum wage hikes actually raise the number of jobs created throughout the community because higher wages are spent immediately on necessities and stimulate the entire local economy.

Minimum wage workers rights throughout the country deserve this ruling from the NLRB which protects them from draconian labor practices and assures every worker is getting a living wage.