How to quantify dignified and essential work? For food retail and hospitality workers in the era of Covid-19 and rising food prices, this descriptor does not translate to better wages. A new report of the Institute of Economic Policy and The change project from Harvard University details low wages at dozens of companies in the industry and distorts the idea that profit-driven price inflation is driven by workers’ wage demands.
Low wages are Standard in the service sector. The industry accounts for 20% of the U.S. workforce, including 7 out of 10 of lowest paid jobs. This includes food, medicine, discount and mass retail, catering and hospitality, and logistics/delivery. Data from the PPE/Shift Project is based on extensive surveys of nearly 21,000 hourly service industry workers at 66 companies across the United States. At least 100 respondents from each company were interviewed, for an average of 317 per company.
More than 56% of all workers in the service sector earned less than $15 an hour, a data point highlighted by decades but still incomplete Fight for $15 campaign, which has yet to translate into national politics despite some recent victories in cities across the country. More than 25% of workers in the service sector earned less than $12 an hour in more than 60 large companies. At the bottom of the scale are hotels and fast food restaurants, with 73% of workers earning less than $15 an hour.
According to the survey, more than 60% of retail workers earned less than $15 an hour, represented by some of the largest private sector employers, including Walmart. Nearly 5% of retail workers earned less than $10 an hour, led by wholesale discount workers such as Dollar General at 22% and conventional chains such as Food Lion at 15%.
There are a few stars who defy these standards. Only 1% of workers at Whole Foods earned less than $15 an hour, while Target and Costco have less than 3% of workers earning that little. No Amazon worker surveyed earned less than $15 an hour, despite the best injury rates in the industryhigh turnover and high profile union victory At New York.
About 36% of Safeway, Aldi and Albertson workers and 32% of CVS workers earned less than $15 an hour. 92% of workers at Dollar General, 77% at Food Lion (Ahold) and Meijer, 60% of workers at Publix, 68% at Rite Aid, 84% at Speedway, 56% at Stop & Shop (Ahold) and HEB, 51 % at Walgreens, 50% at Wegmans, 48% at Kroger/QFC earned less than $15 an hour. Full time is barely $30,000 a year for tens of thousands of grocery clerks and cashiers.
At the other end of the spectrum, 53% of Costco workers, 13% of Amazon, 24% of Whole Foods, 63% of highly unionized UPS, 22% of Stop & Shop, 24% of Safeway, 21% of Albertsons , 15% Hannaford, 12% Wegman’s, 4% Target, 9% Kroger/QFC, 6% HEB, 21% Aldi, 3% Food Lion and only 1% of Dollar General workers earned more $20 per hour. The vast majority of retail grocery workers in the survey earned between $12 and $18 an hour at their jobs, or between $25,000 and $37,000 a year, unloading pallets, filling shelves, calling customers, packing groceries, applying mask mandates, wiping down and sanitizing carts, preparing sandwiches and helping customers buy food for their families. How do you quantify essential work in the US grocery industry? This does not translate into living wages.
Yet for hundreds of thousands of service workers, groceries would be a welcome departure from restaurants, where popular national chains pay even more. 23% of workers at McDonald’s, 24% at Waffle House, 14% at Taco Bell, 17% at Wendy’s (which has been criticized for its tomato supply by the ever-vigilant Fair Food Program), 23% of Subway, 22% of Sonic, 25% of Pizza Hut, 17% of Burger King and 14% of workers at Arby’s still earned less than $10 an hour. Full time is less than $20,000 per year. And 63% of workers in the Quickly Syndicate Starbucks makes less than $15 an hour, underscoring the sense of urgency felt by hundreds of baristas.
On the slightly more positive side, 24% of Applebees, 15% of IHOPs, 14% of In-N-Outs, 33% of Olive Garden, 31% of Red Lobsters and the admirable 48% of LongHorn Steakhouse employees earned over $20 an hour. . In contrast, this is true for only 2% of Burger King and Wendy’s workers and 1% of McDonald’s workers. Fast food is a fat sweatshop, and few of the recent the price inflation of these cheeseburgers hit the pay stubs of cashiers, burger flippers and fries dunkers to feed the workers every day.
Without surprise, the retail trade achieved 6.1% of turnover in February 2022, that’s more than 950,000 separations, a 28% jump from February 2021, when those numbers were starting to hit the headlines. These days, it seems taken for granted that there is so much turnover in the industry. Similarly, turnover in catering increased to 919,000, or 7% of the workforce and a jump of 20% compared to 2021.
Despite media hysteria trying to link wage inflation to profit and supply chain induced price increases, the federal minimum wage remains at a dismal $7.25 an hour, a living wage nowhere. in all 50 states. And although a number of leading companies have salary increases announced and other beneficial hiring and retention benefits, the overall outlook for service-sector wages is bleak.
If wages had followed productivity since 1975, minimum wage would be $21.50 per hour; if wages had followed Wall Street bonuses, that would be $44 an hour. It amounts to more $2.5 trillion a year in lost wealth for workers, nearly twice the grocery industry’s total annual sales, or 3 times the Pentagon’s annual budget. Nor does it include the $15 billion a year in wage theftincluding overtime and minimum wage violations.
What the report fails to point out is that even companies that pay a large portion of their workers more than $15 an hour are not guaranteeing stable full-time schedules of 40 hours per week. Unless these hourly rates correspond to a full-time schedule, it is impossible to meet living wage thresholds in most metropolitan areas. In my experience, I would never have stayed in a career in retail if I hadn’t been full time with a career path, and even then we barely survived for many years with my woman working 2 part time jobs. While supporting a family of four, we were constantly in debt, even eligible for public assistance, until I was promoted to regional grocery manager. And that was 15 years ago when housing costs were still reasonable, gas wasn’t $6 a gallon and home food prices have not increased by 10%.
living wages, or the amount of income required for basic needs such as food and shelter, exceeds $45,000 a year in most states and well over $50,000 in cosmopolitan coastal cities. According to data from the EPI/Shift project, only a small minority of service sector workers earn enough from their jobs to afford to survive, let alone thrive and get the most out of life. It is no wonder that tens of thousands of retail workers need public assistance to make ends meet, some clear form of social assistance and cost outsourcing to ensure the extraction of profit. This also means that when 75% or more of a mass market retailer’s employees are food insecure and 14% have been homeless in the past year, we can assume that these numbers apply to the whole sector.
And that also means that the gargantuan profits gleaned from major food and service chains during the pandemic, as well as billion dollars in dividends, share buybacks and exorbitant CEO salaries, represent a direct transfer of wealth from the pockets of retail workers to shareholders and managers. Living wages could be paid through more reasonable executive compensation and salary caps – perhaps up to 10:1 and up to 50% bonus rates, meaning the big shots in the business could still bring in $200-300 an hour. Not too bad. And a more conservative approach to shareholder buyouts and dividends could keep more cash on the balance sheet for employee salaries, career development and training. Instead, the service sector could foster the growth of a new, deeply diverse middle class.
The service sector is ground zero for economic justice in the United States. If dignified and paid jobs are important, they should start with essential work in food retail, services and hospitality.