Target’s move blows up the claims of corporate lobbyists who argue it’s simply not possible for industries like retail and restaurants to pay a $15 minimum wage. In fact, growing numbers of business owners and economists confirm that a phased-in $15 minimum wage is realistic for employers and will help boost the consumer spending that ultimately drives job growth. But ultimately the imperative to pay a living wage is about our nation’s values. As La Colombe CEO Todd Carmichael argued last week, “unless you pay your employees a nonpredatory living wage that keeps people and their families above the poverty line, you don’t deserve to be in business.”
Part of what’s driving employers like Target to pay $15 an hour is the simple fact that, everywhere in America—not just on the coasts– a single worker will soon need to earn at least that much just to afford the basics. And workers on the coasts or supporting kids will need even more. Yet more than 43% of America’s workers struggle on less than $15 an hour. Far from teenagers, the median age of the millions of minimum wage workers in the U.S. is 32. They include hospital workers and preschool teachers, auto-parts workers and waitresses. In other words, many of the front line jobs in which U.S. workers today spend their careers pay less than $15 an hour.
And we all end up subsidizing those low wages. Low pay by corporations like McDonald’s and Walmart cost taxpayers a whopping $153 billion a year in public assistance to working families, according to a recent study by researchers at the University of California, Berkeley.
A key issue when employers like Target raise pay is what happens to the growing numbers of employees who don’t work for them directly but instead through staffing agencies or service contractors. In the Twin Cities, Target has already been a leader in tackling this issue, agreeing last year to support the efforts of its contracted janitors to unionize and raise their pay substantially. Ensuring that more employers raise standards for contracted and direct employees alike is essential in our increasingly “fissured” workplaces.
Low pay is hurting America’s working families and holding back our economy, which depends on a thriving consumer class to drive growth. Target’s plan to raise pay to $15 an hour over the next 30 months is smart business strategy, and what our nation’s workforce and economy need. There’s now a bullseye on the back of employers like Amazon, Walmart and McDonalds. They should follow Target’s lead.
Commentary by Paul Sonn, the general counsel and program director at the National Employment Law Project.
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