I recently published an article in the Guardian Sustainable Business section which spoke to the rising power of the U.S. minimum wage movement, AKA the Fight for 15. Given the movement’s momentum, its savvy use of online and offline communications and successful network building, I predicted that it would gain major concessions from both policy makers and major retail brands.
Well, guess what? Just recently, Walmart announced a major pay increase for 500 000 of its U.S. employees. Shortly thereafter, N.Y. State raised their minimum for tipped workers and Portland followed Seattle to raise its city-wide minimum wage to $15.
The lesson to be learned here, is that networked movements can rally sentiment and political clout with lightning speed these days. Businesses that underestimate this force do so at their peril.
Here is the full text of my Guardian piece below:
Will this be the year the minimum wage war is won?
Mounting pressure from unions, an eye on legislators and a global interest in tackling inequality might be enough for the minimum wage movement to finally succeed.
US retailers won’t be able to hide anymore – this could be the year the minimum wage movement finally wins.
Groups pushing for a higher minimum wage across the country are gaining ground and may force a significant showdown with retailers in 2015. Union organizers began by targeting big names such as McDonald’s and Walmart, but the mission has rallied wider support and now they’re setting their sights on state and federal legislators.
If successful, their effort would more than double the American minimum wage, something that hasn’t happened since 1949. While doubling the minimum wage might seem like a stretch, organizers are drawing power from a heightened American and global focus on economic inequality, which is pressuring decision makers and business leaders to take a stand on the issue in the months to come.
The push for a $15 wage, dubbed the Fight for 15, started in 2012 but truly took off last year in parallel with the country-wide mobilizations following the deaths of Mike Brown in Ferguson, Missouri, and Eric Garner in New York. In the minds of many protesters, the corporate policies and police practices at the root of both protests are tied to deeper issues of social inequality.
As Carlos Robinson, a Ferguson fast-food worker and wage justice advocate, says: “The protests at Ferguson and the Fight for 15 are both about the injustices that we face on a regular basis, whether from companies or the police.”
While Ferguson ignited a national conversation about inequality, wage organizers are also benefiting from an international focus on wealth disparity. Last month, Oxfam showed that the world’s richest 1% is set to own 50% of collective wealth by 2016. Inequality was also a leading topic at Davos, driven by the World Economic Forum’s own Global Risks Report, which listed “severe income disparity” as a top 10 concern. President Obama’s State of the Union Address shortly thereafter also made clear and bold statements in favor of policies that would ensure greater economic justice.
Driven by such forces, the Fight for 15 has already brought its considerable energy to bear on major retailers, whose low entry-level wages make them the focal points in this battle. In 2014, protesters organized walk-outs and strikes at McDonald’s outlets in over 100 cities. In the face of such pressure, the company has gone on public record to acknowledge these protests are hurting brand image in its SEC filings.
On Black Friday of the same year, thousands also took to Walmart stores to voice their frustration with wages and labor practices. At 1600 locations across the country, protesters engaged in various civil disobedience actions such as “die ins”, often leading to arrests. While outwardly defiant during and after the events, Walmart has since discreetly folded to the pressure and begun preparations to raise wages across the US.
As the climate shifts in favor of a higher living wage, some brands are choosing to get ahead of the curve. Last year, GAP raised their minimum wage across the board to nine dollars an hour. IKEA went one step further by applying MIT’s Living Wage Calculator to set a region-specific minimum generally above 10$ an hour . “We are basing our wages on our co-workers and their needs, rather than what the local employment market dictates,” explains IKEA US Acting President and CFO Rob Olson.
But not everyone is convinced. The National Retail Foundation, for example, is lobbying against plans to raise the minimum wage citing imminent job losses tied to any increase. In a letter to the Senate, NRF Senior Vice President David French warns that there is “…clear evidence that mandated wage hikes undermine the job prospects for less skilled and part-time workers.”
Though politically, doubling the existing minimum wage does seem a hard sell on many levels, activists such as 15 Now’s Ty Moore vow to: “… bring the fight for 15 from the low wage sectors, such as Walmart and fast food outlets, into the political arena at the state and federal level in 2015”.
Advocates have indeed scored smaller victories at the state and municipal levels. In 2014, Both Seattle and San Francisco passed laws that will bring the minimum wage up to the $15 mark. As of January 2015, 21 states also decided to raise their minimums above the current federal standard. This coming April, Fight for 15 organizers promise a fresh round of political pressure campaigns and mass demonstrations.
Retailers caught in the middle of this will soon have to position themselves one way or another. With 63% of Americans currently supporting Fight for 15’s target of a 15$ an hour minimum and an increasing political will to tackle inequality, brands that step out ahead like GAP and Ikea are benefiting from a considerable halo effect. Now all eyes are on the other major players to see who will raise or resist in 2015.