Thursday, December 14, 2017
Business

As low-wage workers fight for better pay, all sides squeezed by weak recovery

Nijah Pretzer makes doughnuts for $7.99 an hour at a Dunkin' Donuts on E Busch Boulevard in Tampa. She says it's tough to support her two kids, 5 and 7, when an hour's pay barely covers two gallons of gas.

"They should pay us more," says Pretzer, 33, standing outside the shop waving a Higher Wages sign. "We work hard. I need to take a stand for my family."

That's why Pretzer was protesting early Thursday with about two dozen other fast-food workers and union and local supporters. They were a small part of a national fast-food wage protest largely driven by the Service Employees International Union. Their employment wish: a $15 hourly wage and a right to organize without retaliation.

A few blocks away that same morning, Dan Fitzpatrick stopped by a remodeled Burger King on E Fowler Avenue. Fitzpatrick, 56 and chief executive officer of Midwest-based Quality Dining Inc., last year bought this and 54 other Burger King stores in the greater Tampa Bay area with plans to improve customer service and instill more of a "family business" culture. Before sitting down to chat, he goes behind the counter to say hello, by first name, to every employee.

Like Pretzer, Fitzpatrick agrees that high gas prices hurt. His company must pay a surcharge to delivery trucks that supply his Burger Kings. Food costs are rising, too, as anyone who goes to the grocery store would agree. And this Burger King franchiser — pointing to a Chick-fil-A, a McDonald's and a Boston Market, all visible through the window — says intense competition is keeping menu prices low and margins lower.

"I understand, on the periphery, the anxiety people feel about this stagnant economy," he says. But a $15 hourly wage would "blow up the fast-food business model" and force his restaurants to charge more.

"Selling a Whopper at $3.79 is a good price," says Fitzpatrick. "Selling it at $8 is not."

Economists suggest so draconian a price increase would not be required. They do say fast-food prices could rise by 20 percent, making a Whopper closer to $4.55.

But Fitzpatrick says customers are very price-sensitive these days and would demand to know reasons for any hikes in their fast-food menu prices.

The recent burst of publicity over low wages in the fast-food industry and at giant retailer Walmart and, especially in Florida where most newly created jobs are replacing better-paying work, is sparking an emotional debate on many levels.

U.S. income inequality has been increasing steadily since the 1970s, and now has reached levels not seen since 1928.

On Wednesday President Obama called for raising the minimum wage to $9 from $7.25 an hour. He warned there was "a dangerous and growing inequality" in the nation that now stands as "the defining challenge of our time."

The backlash to his administration's Affordable Care Act this fall also has heightened ideological tensions.

Yet poverty is still rising. Many low-wage workers — including Tampa Dunkin' Donuts employees Nijah Prezter and co-worker LaShonna-Kyrell Delgardo — rely heavily on food stamps to feed their families, and other public assistance.

The total cost to American taxpayers of a large, low-wage workforce averages $7 billion a year, according to two studies released this fall.

But is jacking up cheap fast-food wages the cure?

Fast-food executives say they understand why their industry is getting singled out in the latest wage protest. But they add that fast-food work is a huge entry way for teens to gain first-time job experience and, increasingly, for older workers to find employment when other jobs are still sparse.

Raising wages that average about $9 up to $15 would mean fewer jobs in the industry, renew motivation to automate tasks now done by people and discourage an already tepid economic recovery.

"Pushing wages up has unintended consequences and would create a false sense of buying power," argues Fitzpatrick, as other businesses raised prices to cover higher labor costs.

Asks the Burger King executive: "When did fast-food restaurants become the fulcrum for social engineering?"

Keep in mind Thursday's one-day protest was national in scope. That means fast-food workers in high-cost and union-heavy places like New York are demanding the same $15 pay as did the Dunkin' Donuts and KFC workers here, where living costs are slightly less and union influence is much weaker.

The real impact of this protest may be recognized over time. Florida's current minimum wage of $7.79 an hour will increase (as it does each year) and become $7.93 on Jan. 1.

Perhaps a more realistic near-term goal of fast-food workers is to seek a $10-an-hour wage. In Florida, a leap to $15 isn't in the cards.

These are not life-changing gains. But they would help. There are no instant cures to the press of low pay and rising living costs. Eventually it must get back to core social issues. Stronger family structure. Better education. Economic mobility.

You know. The hard stuff.

Outside the Dunkin' Donuts on Thursday, one protester joining in the chants and holding a sign was neither fast-food worker nor union representative. Bruce Nissen is one of Florida's foremost experts on jobs and the retired professor of labor studies at the Center for Labor Research and Studies at Florida International University. He says he felt compelled to show up before dawn and add his voice to the fight for higher wages.

Now living in St. Petersburg, Nissen says he sees change coming, if slowly. Businesses used to ignore the environment but that is changing, he notes. Now even Walmart is "bending a little" on employee wages and benefits, he says.

"People forget. Before the 1930s, being an auto worker used to be a terrible job," Nissen says. "That has changed. And this will change, too, in time."

Robert Trigaux can be reached at [email protected]

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