As fast food workers protest low pay, some argue wage increases would kill jobs

December 6, 2013 at 12:00 AM EST
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JUDY WOODRUFF:  As bad as circumstances are for people who can’t find a job, there is a different, but tangible challenge for Americans who have work, but earn barely enough to get by. 

For them, as “NewsHour” correspondent Kwame Holman reports, there is a battle playing out across the country to win a guarantee of higher pay. 

 (SINGING)

KWAME HOLMAN:  McDonald’s employees gathered in the nation’s capital on Thursday, including workers from the franchise inside the Smithsonian’s Air and Space Museum, who struck a seasonal note as they proclaimed they’re tired of having to scrape by. 

SHEMETHIA BUTLER, Protester:  You know, I don’t want to have to do that.  I don’t want the government all in my business.  You know, they shouldn’t — you shouldn’t have to resort to the government assistance to live and take care of your children if you’re eligible and able to work.  You should be able to get paid for what you do.

MELISSA ROSEBORO, Protester:  My grandkids, no, I can’t never say, well, when they ask me, nana, can we go to the store or to the park or any place like that, I — you know, I can take them to the park.  But, as far as like having money to spend, I don’t have it.  I don’t have it.  I got paid yesterday and I’m broke already. 

KWAME HOLMAN:  Over the past year, a small, but growing chorus of fast-food workers have pushed to raise their wages from an average of about $9 an hour to what’s called a living wage, $15 an hour. 

Yesterday’s strikes, planned for 100 cities, were organized by the Service Employees International Union and a New York group pushing for higher wages, Fast Food Forward.  Fast Food Forward also funded a recent study by the University of California at Berkeley.  It found 52 percent of fast-food workers depend on public programs, such as food stamps, Medicaid, and the Earned Income Tax Credit, to get by, at a cost of nearly $7 billion a year to taxpayers. 

That compares to 25 percent of the overall work force who depend on such programs.  As workers from Wendy’s to Wal-Mart call for a living wage… 

PROTESTERS:  Hold the burgers.  Hold the fries.  We can’t survive on $7.25. 

KWAME HOLMAN:  … others are calling on Congress to increase the federal minimum wage, now $7.25 an hour and last raised in 2009. 

PRESIDENT BARACK OBAMA:  If you work hard, you should make a decent living. 

KWAME HOLMAN:  That includes President Obama, who spoke Wednesday about inequality at the left-leaning Center for American Progress. 

PRESIDENT OBAMA:  We all know the arguments that have been used against a higher minimum wage.  Some say it actually hurts low-wage workers; business will be less likely to hire them.  There’s no solid evidence that a higher minimum wage costs jobs, and research shows it raises incomes for low-wage workers and boosts short-term economic growth.  

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KWAME HOLMAN:  Not everyone buys those arguments.  In downtown Washington’s Freedom Plaza, where skateboarders took advantage of unseasonal warmth this week, the head of the Conservative American Action Forum and former Congressional Budget Office chair, Douglas Holtz-Eakin, took issue. 

DOUGLAS HOLTZ-EAKIN, President, American Action Forum:  I think the president’s argument is incomplete at best.  Certainly, the person who has the job, their wages are higher, they’re better off.  But there is evidence that it’s harming the pace of economic recovery.  Hiring gets slowed down.  In the end, everyone might find a job, but you’re getting rid of the jobs that low-skilled workers use, and that’s a problem. 

KWAME HOLMAN:  A new analysis from the conservative Employment Policies Institute makes a similar case against the living wage.  It finds that a $15-an-hour wage would lead to more automation and cost nearly half-a-million low-wage jobs in the end.  Some businesses also have said increased costs from higher wages would be passed on to consumers. 

Thea Lee, deputy chief of staff at the AFL-CIO, says the evidence doesn’t back that up. 

THEA LEE, Deputy Chief of Staff, AFL-CIO:  There’s actually been a lot of great new economic research that looks not at the theory of raising the minimum wage, but at the facts.  And a lot of what it’s done is taken two states that are side by side, one of which has raised the minimum wage, the other which hasn’t, and they have not found any negative employment effect. 

KWAME HOLMAN:  Even before the latest calls to raise the national wage, there was action in a number of states and localities.  This week, Washington, D.C.’s City Council unanimously approved an $11.50 minimum wage, which would be one of the highest in the nation.  It joins two neighboring counties in Maryland and five other states acting this year.  Four more states take up wage bills next year. 

THEA LEE:  At some point, people are working full-time, they’re working harder than ever, and they’re sick of it.  They want to be able to work hard and get the American dream and be able to feed their families.  And that’s a reasonable thing in a wealthy country like the United States. 

KWAME HOLMAN:  Conservative economist Holtz-Eakin sees that frustration, but says the solution is more education and an expansion of the Earned Income Tax Credit, not burdening companies. 

DOUGLAS HOLTZ-EAKIN:  The dividing lines between poverty are nonpoverty are work.  If you’re not — if you’re working, you’re less likely to be in poverty.  And the dividing line between low-wage work and high-wage work is skills and education.  That’s the number one thing they can do. 

KWAME HOLMAN:  Both Holtz-Eakin and Lee point out that today’s low-wage work force is both older and better educated than it was a few decades ago, a fact they attribute to the poor job market.