Pennsylvania Governor Moving Toward Living Wage

On the eve of the 221st celebration of Labor Day in the United States it is only appropriate to talk about one of the largest issues facing American laborers, the lack of a living wage. I would argue that the modern day incarnation of Upton Sinclair’s meat-packing industry represented in his book The Jungle will likely come out of the service industry. I am not suggesting that working conditions in any way resemble the horrible and dangerous conditions of the turn of the 20th century, but the greed and inequality present during that era are best exemplified today by the huge multinational service corporation and it’s under-employed workforce.

When President Teddy Roosevelt read The Jungle he was quoted as saying, “radical action must be taken to do away with the efforts of arrogant and selfish greed on the part of the capitalist.” In the modern world where better to see that greed than in the service industry where corporations like McDonalds which recorded $19.1 billion in revenue during fiscal 2004 and whose CEO Jim Skinner pulled in a whopping $3,098,344, is represented by a workforce that is struggling to live above the poverty line. And this is actually one of the better companies when it comes to paying their employees.

In McDonalds own annual report they describe one of their top three weaknesses as “relatively low employee productivity.”

McDonald’s had revenue per employee of $44,447 and a net income per employee of $5696 for the year ended December 2004. This compared quite poorly with the average figures in the foodservice and restaurants industry. For the same period, the average revenue per employee in the industry was $115,809 while net income per employee was $9873. The company’s employee productivity compares especially poorly with competitors like Yum! Brands and Wendy’s International. For the fiscal year 2004, Yum! Brands had revenue per employee of $154,467 and net income per employee of $12,891. For the same period, Wendy’s International had revenue per employee of $369,486 and a net income per employee of $5054. This indicates that the company’s per employee productivity and profitability is lower than that of its competitors, a disadvantage in a fiercely competitive marketplace.

Bottom line, companies like this are competing to squeeze greater revenues out of their minimum wage employees while not recognizing the wage inequity they present by paying their CEO over $3 million a year. According to the Income, Earnings, and Poverty from the 2004 American Community Survey (PDF) 1.4 million Pennsylvanians, or 11.7% of the population, live in poverty and it is not getting any better.

The nation’s poverty rate rose to 12.7 percent of the population last year, the fourth consecutive annual increase, the Census Bureau said Tuesday.

The percentage of people without health insurance did not change.

Overall, there were 37 million people living in poverty, up 1.1 million people from 2003…

The last decline in overall poverty was in 2000, when 31.1 million people lived under the threshold – 11.3 percent of the population.

The number of people without health insurance grew from 45 million to 45.8 million.

The good news is that Governor Ed Rendell has recognized this problem and is setting out to make some changes for the better. Following the Pittsburgh Labor Day parade on Monday, Governor Rendell will announce his initiative to raise Pennsylvanias minimum wage. Please come out and show your support for Pennsylvania’s working class by joining the Governor when he makes his announcement.

Mimimum Wage Rally
United Steelworkers Building
Gateway 5 Plaza (Corner of Stanwix St and Blvd of the Allies) Pittsburgh
Monday September 5, 2005 @ 12:45 PM

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