New Orleans We can’t seem to get Congress to read the memo and increase the federal minimum wage, but in almost every other way, workers’ wages seem on the rise, and the signs are everywhere.
Kellogg workers after two months on strike still voted down a tentative, five-year contract with the company. Not enough money with their honey crisps! John Deere workers voted down a UAW negotiated settlement three times before they were willing to leave the streets and go back in the plants. In general, strike activity has soared this year compared to the last more than a dozen years.
The Wall Street Journal reports that a survey “finds that companies are setting aside an average of 3.9% of total payroll for wage increases next year, the most since 2008.” About 39% of the companies said inflation was the driver, but, truthfully, many must be worried about all of these new signs of worker activism as well. The natives are restless!
In a huge paradox, pay at Amazon, given its far flung footprint into hundreds and hundreds of markets, is also forcing wages up. Once again in the Journal, they report the announced rate of $16 per hour from Amazon is cleaning out small businesses paying less, as their workers flock out on the streets, not with picket signs, but with applications for those jobs and resignation letters falling out of their pockets. As a market-marker, Amazon is bringing wages up all around it. Some companies are now paying $20 per hour in order to retain and hire workers, and keep ahead of Amazon. Amazon, for its part, claims its starting wage averages $18.32 an hour. Remember, the federal minimum wage is $7.25.
In the “all boats rise” category that we have argued is the impact of living wage campaigns setting area wage floors, Amazon is also having a ripple effect, according to researchers from the University of California at Berkeley and Brandeis University. “A 10% increase in Amazon’s advertised hourly wages in 2018 led to an average increase of about 2.6% among other employers in labor markets where Amazon is located….” The impact on lower waged workers is indisputable, even if the turnover churn dilutes some of the positive impact on the labor market.
Some of these company-certified figures have to be taken with a grain of salt. Back when we were organizing Walmart workers in Florida, they used to claim that their average wages were over $9 at the time, even though we knew different. We were able to access the raw unemployment records data from the state through freedom of information requests. There were no names of employers, but they were grouped by the size of the workforce. It was clear to our team, looking at the two employers, that Publix, the grocery chain, was one, and Walmart was the other. It was easy then to see that Walmart was averaging supervisors and managers with rank-and-file workers. When disaggregated, the average dropped to only a couple of dimes above $8.
I would be careful believing everything Amazon says on that score, but the megatrends in labor markets that are rising in its wake, and the restlessness of American workers ready to strike and quick to quit, is worth believing completely.