Low-Wage Workers to Corporations: Pay Fair or Pay Up

Workers in Chicago say taxpayers are footing the bill for the paltry paychecks cut by their corporate employers.

Gianna Chacon speaking at the 'Pay Fair or Pay Up' rally. (Photo: Twitter)

Oct 7, 2015· 2 MIN READ
Rebecca McCray is a staff writer covering social justice. She is based in New York.

Gianna Chacon’s mother wasn’t around a lot when she was a kid. It wasn’t that she was negligent; she was a single mom trying to balance multiple low-wage retail and service industry jobs. It’s a struggle that resonates with Chacon today, as a 21-year-old part-time college student and part-time employee at the big-box department store Marshalls in Chicago.

“I make $10 an hour for the 25 hours a week I work, and that is not enough to buy food, pay my phone bill, and cover other necessities,” Chacon told TakePart. “[Marshalls and other corporations] assume that if they pay low enough wages, their workers will apply for social programs to cover the rest. They’re basically profiting off poverty.”

Chacon is one of many low-wage workers in the Cook County area tired of struggling to make ends meet while the companies they work for rake in major profits—Marshalls' parent company, TJX, has made more than $2 billion this year. On Wednesday, workers and allied activists joined County Commissioner Robert Steele to introduce the Responsible Business Act, a bill that aims to stop corporations from underpaying their workers and letting taxpayers pick up the slack.

The bill aims to charge a fee to corporations with more than 750 workers who are paid less than either $14.57 per hour or $11.66 per hour with benefits—the county’s living wage. The fee—which would affect an estimated 67 companies, including Marshalls—could generate as much as $500 million over its four-year phase-in period, according to an analysis by the Center for Urban Economic Development at the University of Illinois at Chicago.

The low wages that drive workers to rely on social-safety-net programs such as food stamps and Medicaid aren’t an issue isolated to Illinois. American taxpayers spend about $153 billion each year paying for these services for working families, according to a study by the University of California, Berkeley’s Center for Labor Research and Education. More than 25 million Americans rely on jobs that pay less than $15 an hour, and Latinos like Chacon bear the brunt of these low wages, according to the National Employment Law Project.

The daughter of Mexican immigrants who relocated to Illinois, Chacon is the first in her family to attend college. She saw her education as the way out of the low-wage job cycle she watched her mother struggle in, but now she, too, finds it challenging to make ends meet while she puts herself through school; she is studying political science. She notices her fellow students struggling to get through school on low-wage jobs too—but it’s not just students who rely on this work.

“My fellow workers are struggling with this as well,” Chacon said. “They are trying to support their families on these wages, which is astounding.”

David Borris, owner of Hel’s Kitchen Catering in the Chicago area, pays his workers $11 an hour, though the minimum wage is $8.25. He has 37 full-time employees and about 90 seasonal workers. As a small business owner who strives to pay his workers a fair wage, he supports the Responsible Business Act.

“We know that if we reward people with a little bit more than the competition we’ll get better people and lower our turnover,” Borris told TakePart. “But the simple fact is, I can afford to help my employees live a reasonable life without significantly impacting my bottom line. If we can get a benchmark on wages that pushes wages up, all businesses will do better in the long-term.”

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If those wages rise, taxpayers won’t have to subsidize the low wages other corporations pay, Borris and other advocates of the bill believe.

Chacon relies on Medicaid for her health care, a service she says she is grateful for, but she would rather see companies like her employer do their part to pay their workers a living wage.

“Whether or not you are working a low-wage job, someone you know right now is subsidizing this model that relies on poverty,” Chacon said. “It affects everybody.”

There will be a hearing on the bill in late October, and a vote is expected in mid-November barring any complications.