After turning a deaf ear to pressure for years, US businesses are digging into their pockets to improve the lot of the lowest-paid workers, but also their own images.
Faced with a mounting campaign to address a growing gap between the rich and the poor, and complaints that low wages leave workers dependent on state handouts, some of the largest US employers have announced sweeping wage increases in recent weeks.
After department store Walmart and clothing chain The Gap said they would raise worker pay, this week fast food giant McDonald’s announced a hike for 90,000 of its workers.
The wave of companies showing a greater appreciation for their workforce has even spread to the tech industry. Microsoft announced it would require its contractors to extend paid leave to thousands of people that regularly work for the company but are not Microsoft staff.
The companies have made sure the public takes note. McDonald’s took a full-page advertisement out in the New York Times heralding its generosity.
“We’re announcing a first step in rewarding the team members who work so hard for our brand every day,” it said.
Wal-Mart Stores chief executive officer Doug McMillon told workers that the world’s largest retailer would “continue to provide that ladder that any of you can climb.”
However, the moves, which sought to raise hourly wages above the official minimums — McDonald’s promised it would pay an average US$10 per hour by the end of next year — still fell short of a national campaign calling for US$15 per hour.
That raised questions about whether the moves are simply publicity efforts for the firms.
The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) — which has been fighting for higher wages for retail and food chain workers — dismissed the speculation.
“It’s not essential to figure out whether or not they did it for good reasons. The key issue here is that it rewards months of mobilization,” AFL-CIO deputy policy director Kelly Ross said.
The companies could also be responding to fundamental economics. The US economy has been growing steadily and companies have added about 3.4 million jobs in the past year alone, tightening the jobs market somewhat.
“It is a public relations move by the companies, but it comes in a macroeconomic context that is pushing up low wages,” University of Chicago labor rights expert Ioana Marinescu said.
American Enterprise Institute Washington-based analyst Michael Strain agreed.
“As the labor market becomes more competitive, the firms have to increase wages to attract the workers they want,” he said.
At the same time, a debate has mounted over why only the wealthiest US citizens have seen income gains while wages and salaries for the poorest 80 percent have stagnated or declined.
Worker groups want the government to address it by forcing up the official minimum wage.
However, the political gridlock in Washington leaves the focus on companies. For several years US President Barack Obama has pressed Congress without success to increase the federal minimum wage — stuck at US$7.25 an hour since 2009.
Nor has he been able to get enough Congressional support for other benefits common elsewhere, like a minimum paid maternity leave.
“Congress is clearly broken and won’t change anything with respect to the labor market,” Peterson Institute for International Economics researcher Jacob Kirkegaard said.
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