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February 1997, Volume 4, Number 2

US: Low Wage Workers

Marriott and 28 companies, including J.C. Penny, Hyatt International, McDonald's, ConAgra and Levi Strauss, have formed the Employer Group to study ways to improve the management of low-wage employees. They plan to profile their work force and press for public policies that benefit low-wage workers, such as broader application of the Earned Income Tax Credit.

Marriott International Inc. has 134,417 US housekeepers, laundry workers, dishwashers and other hourly staffers. Their median wage is $7.40 per hour, including overtime. Many of the workers do not call in when they cannot come to work, or they quit for higher wages elsewhere; Marriott workers speak and read 65 different languages.

Marriott says that its "managers spend 15 percent of their time doing social work." To speed up the workers' acquisition of English, more than half of the Marriotts in the US offer workers ESL classes.

ConAgra Refrigerated Foods Cos. started recruiting Hispanic and Asian immigrants for its rural meatpacking plants in 1996 and tried to reduce the annual turnover rates of 100 percent and more with on-site child care, prenatal care and housing projects.

According to the Economic Policy Institute, 30 percent of all US employees make $7.28 an hour or less. A survey of 1,100 major employers released in October, 1996 found that almost half offered their employees only one health insurance option. Workers pay 17 to 35 percent of the cost of health insurance at these firms.

The US minimum wage rose $0.50 per hour, from $4.25 to $4.75, on October 1, 1996. Many of the first newspaper accounts about employer reactions to the higher minimum wage emphasized that the most common response was to reduce the hours of work, not to lay off workers. According to the Federal Reserve, the US economy, which normally generates about 2.5 million net new jobs per year, may generate 100,000 to 200,000 fewer because of the minimum wage hike.

Most fast food restaurants pay their employees more than the $5.15 per hour federal minimum wage scheduled to be effective September 1, 1997. Wendy's, for example, pays an average $5.20 per hour at its 4,300 US restaurants.

Inspections in early November by federal and state labor inspectors of 78 garment contractors in southern California found that 90 percent were paying the higher minimum wage. The inspectors found, however, that even though the garment shops were paying the minimum wage, many were not keeping appropriate records, were unregistered or were paying workers in cash.

California voters approved Proposition 210 in November 1996, which will increase the minimum wage in California to $5 per hour in March, 1997. The federal minimum wage will rise to $5.15 in September, 1997, and then, under Proposition 210, the California minimum wage will increase to $5.75 in March, 1998.

At the height of the recession in winter 1992, some whites, or gabachos, in southern California joined Hispanic immigrants on street corners looking for day jobs. The immigrants reportedly were amazed that US citizens who spoke English were forced to seek work at day labor markets.

The US House of Representatives approved an amendment to the FY97 NLRB appropriation that would have prohibited the agency from expending funds to protect the labor relations rights of an employee not lawfully entitled to be present and employed in the United States. The conference committee dropped this restriction.

Maria LaGanga and Stuart Silverstein, "State Panel Moves to Relax Overtime Law Amid Protest," Los Angeles Times, January 25, 1997. Christina Duff, "New minimum wage makes few waves," Wall Street Journal, November 20, 1996.