Fast-food workers' push for higher wages faces opposition

Julia Vasquez with here daughter Samantha Vasquez 2,

Julia Vasquez with here daughter Samantha Vasquez 2, both live with Julia's mother in Port Washington on Tuesday, July 1, 2014. Vasquez who earns minimum wage at a fast food business can't afford to live in her own place. (Credit: Uli Seit)

Julia Vasquez of Port Washington knows exactly where she will be each weekday, 52 weeks a year.

She rises early, puts on her white shirt and jeans, and by 6:30 a.m. Vasquez is standing behind the counter of a fast-food restaurant in Suffolk County working an eight-hour shift.

Her weekly take-home pay for 40 hours: about $300.


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Vasquez, 34, is employed in one of the fastest-growing job categories on Long Island, with among the lowest wages. Her $10-an-hour pay is higher than what many make in similar jobs.

"It's very hard to manage, to provide for my daughter and pay my rent," said Vasquez, who has no benefits, paid sick days or vacations. "It's not easy."

Now there's a movement nationally and across New York pushing for higher hourly pay for fast-food and other low-wage workers. The effort faces fierce opposition from business associations and small-business owners who say that higher wages could force them to raise prices, cut jobs or even close down.

"Honestly, it's very tough to give them any kind of wage increase," said Jeff Iqubal, owner of Dante's Pizzeria of Hicksville.

Last weekend, about 1,200 fast-food workers gathered from all over the country at an expo center outside Chicago to strategize on furthering their campaign for $15-an-hour wages, focusing on franchises and chains like McDonald's and Burger King. The Service Employees International Union, with 2 million members, helped underwrite the two-day convention, where there was unanimous support for nonviolent actions of civil disobedience.

In June in Albany, about 1,000 workers demonstrated at the state Capitol in favor of a bill to allow localities to set minimum wages higher than the state minimum of $8 an hour (already slated to rise to $9 by the end of 2015.)

Fast-food workers, led by unions, especially the SEIU, and other advocacy groups, also have staged one-day strikes and demonstrations, beginning in New York City in November 2012. On May 15, coordinated demonstrations took place in 130 U.S. and 20 foreign cities -- although none on Long Island. Federal legislation in the Senate proposes to raise the $7.25 federal minimum wage to $10.10, but activists support wages as high as $15 an hour, a figure backed by New York City Mayor Bill de Blasio and recently enacted in Seattle, to be phased in by 2021.

Fast-food outlets have been difficult to unionize because most are run by individual franchise holders operating under a franchiser corporation's rules. However, on Tuesday, labor won a potentially big victory when the National Labor Relations Board determined that McDonald's, USA, LLC could be named a joint employer of workers in its more than 14,000 U.S. restaurants, the great majority operated by franchisees. The board's Office of the General Counsel found merit in 43 cases so far, alleging labor law violations against workers, including charges they were punished for pro-union activities, and said suits could be filed against McDonald's if the cases aren't settled first.

The decision to name McDonald's a joint employer opens the way for a unionization campaign targeting the corporation directly rather than its more than 3,000 individual owner-operators. A McDonald's representative said the company would contest the labor board decision, and said it wasn't responsible for hiring, termination, wages and employee hours at franchised locations, according to The Associated Press.

Many support children

Minimum-wage workers are typically depicted as young and entry-level, yet federal data reveal that more than 40 percent are 25 and older. About a third of those 20 or older -- such as Vasquez -- support children.

To get by, Vasquez, who said she gets no financial help from her child's father, lives with her mother, paying $600 a month in rent, and relies on food stamps and county help to pay for day care for her 2-year-old daughter, Samantha. Still, Vasquez never takes a week off.

"I don't have the luxury of taking vacations," she said. "My daughter needs her clothes, her shoes. It's a very tight budget."

Last year, 23,532 people worked in Long Island's 2,317 limited-service restaurants, which includes fast-food outlets as well as delis, takeout pizzerias and sandwich shops. That was up from 17,151 employees in 1,675 establishments 10 years earlier, according to the U.S. Bureau of Labor Statistics.

Business groups, including the National Restaurant Association, have come out strongly against raising the minimum wage, especially as high as $15, arguing it would force business owners to cut jobs and hours and result in a loss of entry-level jobs for young workers.

And, critics of raising the minimum wage point out, family incomes may be considerably higher than the earnings of individual fast-food workers, especially for teenagers or young people living with their families, or for married employees.

Matthew Haller, spokesman for the Washington, D.C.-based International Franchise Association, which represents about 30,000 individual franchisees with businesses ranging from fast food to print centers and flower shops, said raising the federal minimum wage would force business owners to raise prices -- or eliminate jobs.

"A minimum wage was never meant to be a living wage," he said, noting such jobs were traditionally held by young workers or those seeking flexibility, who, in a better job market, could then move on to higher-paying employment.

"Part of the reason we're having this conversation" about raising minimum wages, he said, "is because of the lack of job creation in other sectors of the economy."

"Fast-food restaurants typically operate on thin profit margins," he said. "A lot of restaurants choose to pay wages that are competitive in the market in which they operate, but raising wages to extreme levels like $15 is unsustainable. At a certain point if you can't turn a profit in a business, you have to go out of business or raise prices, or you eliminate workers, and that impacts consumers."

Yet the economic implications are more complicated, suggested John Rizzo, economist at the Long Island Association, a business group based in Melville. He noted that while rapidly rising wages could motivate businesses to raise prices, cut workers' hours and spur automation, there were benefits from raising low incomes as well. Low-wage workers spend their income, and with more money in hand their spending could help boost local economies. "It's a trade-off," he said.

While advocates say profitable businesses could pay higher wages, many small-businessmen such as Jeff Iqubal say they cannot. He'd have to cut his two main employees' hours, he said, if wages rose above the $10 an hour he pays now. They each work about 36 hours and hold second jobs elsewhere.

In addition, "There's a lot of competition here," said Iqubal, who works 72 hours a week in the strip mall pizzeria he's owned for nine years. "With [owning only] one place, you can't live."

Gary Gulla, 57, another independent small-businessman, has owned Bellagio Pizzeria in Farmingdale for the past 14 years. He, his wife and three children run it, with about 33 full- and part-time employees, who make from $8-an-hour minimum wage to as much as $18 an hour for cooks and pizza makers.

In a competitive business climate, he said, rising costs, including salaries, mean higher prices for consumers, which could jeopardize jobs and businesses if prices get too high for consumers to accept.

"Many business owners are just barely bringing home a paycheck, and raising salaries and prices would put them out of business -- which would raise unemployment," said Richard Albano, 53, owner of Richie's Pizza in Deer Park.

His own employees start out at $9 an hour, with good performers moving up to $12 or $13 an hour after two months. A higher minimum wage "won't affect me because we're doing good," he said. Most affected would be franchises with a business model of low wages and thin profit margins, and an owner "who isn't doing that well in a small business," he said.

Struggle on Long Island

But while business owners must meet their expenses, so too must low-wage workers. And meeting expenses can be especially difficult for low-wage families on high-cost Long Island.

A 41-year-old Suffolk County woman whose husband holds a low-wage factory job said her income at a fast-food hamburger franchise helped pay for food and clothing for their three sons. After seven years on the job, she takes home only about $100 for a 15-hour week.

"I want to work 40 hours a week here, but the boss says no," said the woman, who asked that her name be withheld. She recently began a second job working three days a week at a clothing store, for about $150 more in take-home pay.

"I'm not happy, but God helps me," she said.

Ana Davis, 22, a Hofstra University senior from Connecticut, better fits the depiction of a low-wage worker as young and entry-level. Yet, she supports herself on her wages without help from her working mom, and takes out college loans.

She pays rent for her off-campus housing in Uniondale by working up to 35 hours a week at the Westbury fast-food restaurant. She makes $9.75 an hour and takes home, after taxes, about $250 to $300 a week, she said.

Over the last school year, she said, she had worked three jobs and her grades suffered as she sometimes traded off attending class with the need to work enough to pay her bills.

"The money is getting kind of thin," said Davis, noting her pay is "better than a lot of other places, but realistically it doesn't cover everything. Honestly, this is the best job I ever had, but it would be nice to earn enough to be comfortable."

Mileny Loais, 23, who makes $8.50 an hour at a sandwich chain franchise in Mineola, lives with her parents in Uniondale. Like many young adults in a difficult job environment, she still lives in her childhood bedroom.

She has looked on Craigslist for an apartment but said with a laugh, "No, I couldn't move out. I'll have to stay with my parents for a couple more years." She'd like to save for college, she said, but barely covers her personal expenses. Wages of $10 or $12 an hour, she said, "would be a lot better. That would help me a lot."

Organizing workers

Make the Road New York is among the advocacy groups organizing low-wage workers. Its Long Island chapter, based in Brentwood, includes volunteers such as Teresa Farfan, 65, of Central Islip, who used to work at a national fast-food chain for up to 70 hours a week with no more than $400 in take-home pay. Another is a pizza deliveryman, 64, who requested anonymity.

After 12 years on the job, his 50- to 56-hour workweek at $6.75 an hour plus overtime yielded weekly take-home pay of $150 to $200, plus tips, he said. His tips — from $30 to $100 a week — go to maintain his car, which he must use for deliveries.

But for many workers, the fast-food industry, whatever its wages, offers the best job they can find.

Vasquez, the single mom from Port Washington, said since beginning work in the fast-food industry 11 years ago, she’s tried to find better-paying jobs. For two years she had a job in a warehouse, which ended when the company moved, and she returned to her fast-food employer.

“If I find something better, I leave, and if that doesn’t work out,” she said, “they always take me back.”

SURVIVING ON $16,018 A YEAR
In 2013, the average wage was $16,018 for limited-service restaurants (including fast-food restaurants, delis, limited-menu pizzerias and other similar establishments). In 2003, the average wage was $13,220. (Average wage is total wages divided by total number of employees, from higher-wage salaried managers to teenage part-timers).
Source: U.S. Bureau of Labor Statistics

The Washington, D.C., think tank Economic Policy Institute’s family budget calculator said an adequate but modest income in 2013 for a family of four on Long Island was $94,567. It posited a monthly budget of $7,881, including $2,000 for child care, $607 for transportation, $1,387 for health care, $754 for food, $1,583 for housing, taxes of $946 and $598 for other necessities.

Among workers earning between $7.25 and $11 nationally, the median age is 30 (half older, half younger) and more than a third (34.5 percent) are at least 40 years old. In New York State, low-wage workers provide on average 46.8 percent of family income.
Source: Economic Policy Institute analysis of U.S. Community Population Survey data

MINIMUM PAY IN STATES
As of June 1, 22 states and the District of Columbia have minimum wages above the federal minimum wage.
19 states, Guam, and the Virgin Islands have minimum wages the same as the federal minimum wage of $7.25.
Four states, American Samoa and Puerto Rico have minimum wages below the federal minimum wage (the federal minimum thus applies).
One state, New Hampshire, repealed its state minimum wage in 2011 but left the reference to the federal minimum wage.
Five states have not established a state minimum wage.
HIGHEST: District of Columbia, $9.50, going up to $11.50 by July 1, 2016
LOWEST: Georgia and Wyoming, $5.15
NONE: Alabama, Louisiana, Mississippi, South Carolina and Tennessee, wages not tied to federal minimum; New Hampshire has no state minimum but wages tied to federal minimum
Source: National Conference of State Legislatures

 

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