What do Victoria's Secret sales associates have in common with the Ford factory workers? More than meets Christmas shoppers' eyes when they survey the scantily clad mannequins in the Michigan Ave. shop window.
Henry Ford famously adopted the "Five Dollar Day," paying his factory workers double the going rate for a day's work. At the time, Ford's decision to give his workers a wage they could actually live on was considered foolish. Critics questioned his credibility as a businessperson, and reporters even asked him if he was a socialist (and this was before Fox News).
Was Ford crazy? As it turns out, no. Paying double the going rate led to lower turnover, higher productivity, and allowed his workers to become some of his best customers. By paying his employees enough to participate in the middle class economy, Ford created a pool of consumers that were able to afford Fords themselves, lifting the company and the entire community. This vision, along with the growth of strong labor unions, paved the way for the greatest sustained period of economic prosperity our nation has ever seen.
Unfortunately, today's CEOs lack Ford's vision. America's economy is even more consumer-driven now, and factory jobs are no longer the backbone of the economy. Instead, job and economic growth, especially in the years following the Great Recession, is fueled by low wage retail and service jobs, everything from flipping burgers to selling lingerie. The typical cashier, sales associate or food preparation worker earns barely above minimum wage -- and with part-time hours the norm in these industries, these workers can't earn enough to get by, let alone enter the middle class like factory workers generations ago. Meanwhile, the typical retail and restaurant CEO is doing better than ever -- check out Bloomberg's recent profile of a minimum wage McDonald's worker in Chicago, who would have to work 1,000,000 hours to earn what his CEO earned last year.
Service sector jobs have paid so little for so long that it's hard to imagine that flipping burgers at McDonald's or ringing up customers at TJMaxx could one day be considered a good, middle-class job. But here in Chicago, there is a group of workers fighting to do just that. A couple of weeks ago, hundreds of retail and fast food workers in Chicago made history by forming a brand new union, the Workers Organizing Committee of Chicago (WOCC). Their campaign, Fight for Fifteen, demands a fifteen dollar per hour minimum wage for retail and restaurant workers in downtown Chicago and the right to join a union without interference.
I recently co-authored a report that examines these demands and finds that raising wages for these workers to $15/hr would lift thousands of families in our city out of poverty, create over 1,000 new jobs, and pump nearly $200 million dollars back into our neighborhoods every year. Of course, companies are going to claim that they can't afford to give a raise to their workers without layoffs, but our research found just the opposite -- just like with Ford's factories, giving retail and restaurant workers more money to spend means more sales for their employers. Instead of laying workers off, employers will hire more workers, and ultimately make more money.
Workers have been taking to the street in the Chicago area for months, with September's Chicago Teachers Union strike followed by an unprecedented walkout by the Walmart warehouse workers in October, and now WOCC is making a stir in the city, with large protests on Black Friday(links) and more protests planned for the holiday season. And they're joined by thousands more retail and restaurant workers across the country in what the LA Times recently described as "rising U.S. labor unrest."
Why are low wage workers rising up, and why now? Take a look at economic trends since the Great Recession and the answer is clear. While wages and wealth have risen for the very wealthiest among us, and corporations are doing better than ever, low wage workers are not earning enough to get by without public assistance or charity. And so we face what New York Times' Eduardo Porter describes as "a clear choice":
"Either we build an economy in which most workers can earn enough to adequately support their families or we build a government with the wherewithal to subsidize the existence of a lower class that can't survive on its own. We are doing neither."
A NYT poll conducted just prior to the election asked respondents to identify the key to growing our economy-and well over 50 percent of voters said it was building a strong middle class over creating a "healthy climate for business." Fortunately, we don't have to choose. Building a strong middle class is the most effective way -- and arguably the only possible way -- to build a healthy climate for business.
In Chicago and across the county, low wage workers are fighting for an economy in which folks that work hard are able to support their families and have dignity and respect in the workplace. In doing so, they are working to transform the Victoria's Secrets and Chipotles of the world into the new Ford -- a feat that could usher in a new wave of growth and prosperity for all of us.