August 29, 2012 The Pump Handle 1Comment

by Elizabeth Grossman

What industry employs approximately 20 million Americans, or one out of five US private-sector workers, but whose median wage has workers taking home less than $20,000 a year? Clue: It’s the same industry in which it’s actually legal to pay $2.13 an hour, for workers who qualify as “tipped” employees. Answer: The food service industry, which includes agricultural and farmworkers, food processing and slaughterhouse employees, as well as those working in food distribution, retail, restaurants, and other food service businesses.

In a survey for a report released earlier this summer, the Food Chain Workers Alliance – a coalition of non-governmental organizations advocating on behalf of these workers – found that 86 percent of the workers surveyed earned low or poverty wages, with many earning the bare federal minimum of about $15,080 a year. Only 17 percent of these workers receive health insurance through their employers, and 58 percent were without any healthcare coverage. Wages in this industry are so low that, according to the Bureau of Labor Statistics, workers in the food service industry use food stamps at twice the rate of Americans employed elsewhere.

A large proportion of food industry workers, whether farm, slaughterhouse, food-processing or restaurant workers, also suffer from inadequate health and safety training and inadequate policies and/or practices regarding job-related illness and injury. Many also work extended hours that go beyond 40 and in some cases 60 hours a week. More than 40 percent of the workers surveyed worked for two or more employers each week. More than half the workers surveyed by the Food Chain Workers Alliance also reported picking, processing, selling, cooking, and serving food while sick, an average of at least three days per year. Almost two-thirds of these workers said they did this because they lacked paid sick days; 43 percent said they thought they’d lose their job if they stayed home.

In some segments of the food industry, piece-work is still common. One farm worker reported being paid $20 for each box filled with cucumbers – but that $20 had to be split with the entire work team of 18 people. Workers in retail food distribution, including one Wal-Mart warehouse worker, also reported being paid by the piece – often by number of boxes moved. Across the industry, workers reported inadequate lunch and break times and ethnic discrimination.

Wage theft is also common: More than one-third of the workers surveyed reported problems with being paid properly for the previous week, by not being paid for all hours worked, not receiving overtime payments, or not receiving their share of tips. The Restaurant Opportunities Center, part of the team that produced this new report, has been documenting these wage issues, as Liz Borkowski and Celeste Monforton have reported for The Pump Handle. Almost one-quarter of the workers in the Food Chain Workers Alliance survey said they were not paid the minimum wage. Payment problems are exacerbated throughout the food industry by the recent notable increase in use of temporary and part-time workers.

In 2010, more than 27 percent of all US jobs created were temporary, while staffing at employment agencies specializing in temp jobs accounted for 91 percent of the country’s non-farm job growth between 2009 and 2011. Agricultural jobs have traditionally been seasonal, but the current trend in temporary and part-time hiring also extends to food distribution warehouses and restaurants, particularly fast-food outlets, which in 2012 employed more than 4 million workers, up more than 100,000 since 2011.

Pushing for a higher minimum wage
A great many things need fixing to improve the working conditions and outlook for those in the food industry – including for the many young people and children who are employed throughout the food production and retail supply chain. High on this list – #1 for the Food Chain Workers Alliance – is the need for a living wage, which the federal minimum clearly does not offer. A bill now under consideration by Congress would raise the federal minimum wage from its current $7.25/hour to $10/hour, tie future annual increases to the Consumer Price Index, and increase the federal minimum for tipped employees from $2.13 to $5.50 an hour. Its success, however, is uncertain without bipartisan support, which it currently lacks, and given business groups’ ongoing opposition.

Across the country state Farm Bureaus have been opposing minimum wage increases, arguing that they would harm business and hurt job growth. The National Restaurant Association also firmly opposes any state or federal minimum wage increases, arguing that “Wage mandates are an ineffective way to reduce poverty” and that they prevent hiring and cause staff and work-hour cutbacks. The American Enterprise Institute goes farther, saying that raising the minimum wage would increase poverty, fail to help the unemployed poor who lack jobs, and impact only the  “tiny fraction” of people currently paid the minimum wage.

Yet a report just released by the Massachusetts Budget and Policy Center analyzing the state’s job growth over almost two decades shows that increases in the minimum wage have not impeded job growth. The report, which looked at wage and job patterns since 1995, found that while the state’s minimum wage increased six times during that period, “employment growth in industry sectors with high concentrations of minimum wage workers has been more than total employment growth.”

Even during the 2007 to 2009 recession across the six New England states, “states with a larger minimum wage increases actually had smaller drops in employment during this period,” according to the Massachusetts report. New Hampshire, which raised its minimum wage several times during these two years, had the smallest decline in employment of all New England states. Rhode Island, with no minimum wage increases during this time, saw New England’s largest drop in employment. The report acknowledges a variety of factors contributing to these statistics, but also finds that since the end of the most recent recession in 2009, there continues to be no evidence that increasing the minimum wage hinders job growth.

The Massachusetts report also cites academic studies that looked at relationship between minimum wage increases and employment in the restaurant industry – including the fast-food industry – and with regard to teen employment. Both found that increases in minimum wage had no significant effect on employment levels. Similarly, an analysis of small business hiring and minimum wage rates found that “minimum wage increases are unlikely to have a negative economic impact on small businesses in the long term.”

When Congress reconvenes after Labor Day, it’s expected that the minimum wage will be on the agenda. The Food Chain Workers Alliance will be there to make their case.

Elizabeth Grossman is the author of Chasing Molecules: Poisonous Products, Human Health, and the Promise of Green ChemistryHigh Tech Trash: Digital Devices, Hidden Toxics, and Human Health, and other books. Her work has appeared in a variety of publications including Scientific American, Salon, The Washington Post, The Nation, Mother Jones, Grist, and the Huffington Post. Chasing Molecules was chosen by Booklist as one of the Top 10 Science & Technology Books of 2009 and won a 2010 Gold Nautilus Award for investigative journalism.

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