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The Political Scene | The New Yorker
William Finnegan and George Packer Discuss Income Inequality and the Fast-Food Labor Protests
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William Finnegan and George Packer Discuss Income Inequality and the Fast-Food Labor Protests
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- [00:00]
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- [01:15]
Dorothy Wickenden
This is the Political Scene, a weekly conversation with New Yorker writers and editors about politics. It's Thursday, September 11th. I'm Dorothy Wickenden, executive editor of the New Yorker.
- [01:25]
William Finnegan
What do we want, dmc?
- [01:27]
George Packer
What do we want now?
- [01:29]
Dorothy Wickenden
Over the past, fast food workers have organized to demand $15 an hour and a union. Obama pointed this out to the country on Labor Day.
- [01:38]
George Packer
All across the country right now, there's a national movement going on made up of fast food workers organizing to lift wages they can provide for their families with pride and dignity. There is no denying a simple truth. America deserves a raise.
- [01:55]
Dorothy Wickenden
That sounds like a winning slogan for 2016. Bill Bill Finnegan has a piece in the magazine this week about the new activism, and he's here today with George Packer. George, let's start with you. Obama has said more than once that income inequality is the defining challenge of our time. I'm making a wild guess here and saying that you agree with him. The federal minimum wage is $7.25 an hour, and adjusted for inflation, that's a decline of about 25% since 1964, what have you found in your reporting about the effects of this on the workers? On the bottom rung of.
- [02:31]
George Packer
You're right. I agree with the president about it being central to really everything that ails America right now. Basically, no one can have a comfortable life. People have to work impossible hours. Their hours are unpredictable because so many workers are part time and just in time. Scheduling has them unable to plan their week. They can't take vacations, they can't go to the movies, they can't go out for pizza. All the jobs that are essentially the low wage jobs and the growth jobs of the economy for the former blue collar class are poverty jobs. And the burden is shifted to the public, which has to cover Medicaid and food stamps and other forms of public assistance, which these companies simply won't pay to their workers because they don't have to, because these workers are almost entirely ununionized and powerless to bargain with these giant employers.
- [03:32]
Dorothy Wickenden
And that leads my first question to Bill, which is you write in your piece that for the most part, labor unions just have failed to make the shift from a manufacturing to a service economy. And yet we're seeing quite an impressive movement sort of spreading across the country. How did such a dispersed and seemingly powerless workforce come to refine such a strong message and actually force some changes?
- [03:54]
William Finnegan
Well, the fast food industry is about as fissured as any industry could be. It's thousands and thousands and thousands of small shops with something like 4 million workers altogether, but virtually impossible to organize in any kind of traditional industrial way. There's not a factory, there's not a big plant, there's not a big place you can find them. This movement has been roiling under the surface and not simply spontaneous. I mean, it's funded by the second largest labor union in the country, the Service Employees International Union. And a number of groups have sprung up in different cities, all funded by seiu. So it's very much an SEIU push. SEIU has grown tremendously in the last few years. They've probably among major unions, adapted best to the changes in the economy and have done remarkable organizing among health care workers and janitors groups that again, are very hard to sort of find all in one place and organize. So they're responsible for a lot of what you see. And the workers are fairly desperate people I've spent time with. They're risking their jobs and they're all pretty much in poverty. I've met very few people who are living above the poverty line where family income has the family Especially in New York, of course, where it's incredibly expensive. And the slogan and the big push, which sounded so kind of outlandish a couple of years ago, $15 an hour when people are making $7.25 8850 an hour. I mean, gigantic raise.
- [05:18]
Dorothy Wickenden
So in May, McDonald's CEO Don Thompson, under all this pressure, said that the company could minimum wage hike to $10.10, which is I think what Obama's most recent proposal is. And he made other concessions. I think he said the company would accept the added costs of Obamacare and so on. But are these changes being implemented? And as you say, they're hardly going to make the difference?
- [05:41]
William Finnegan
No, no, nothing's been implemented. The big fast food chains and other large low wage employers pretty much haven't budged. So it's falling to minimum wage legislation completely blocked at the federal level. I mean, it's not going to happen. There's a bill which the supports but has no chance of passing. And so as I think you suggested, this is quite a strong issue for the Democrats in the election this year in 2016 because yes, the big employers recognize that over time, with inflation, minimum wage needs to go up, that its value has been steadily declining for a long time, that it's cyclical and it's long past time for it to go up. The intention is still within what is inevitable in the way of a minimum wage hike, to lay off, as George rightly put it, all the deficiencies in this pay model onto public assistance, onto the taxpayer.
- [06:33]
Dorothy Wickenden
Critics of the minimum wage say that fast food workers are mostly teenagers just making, you know, extra money after school. You show that isn't true, that they're predominantly African American and there's a large number of Hispanics. And many of the protests have taken place in poor cities. Chicago, Detroit, St. Louis. Talk a little bit about that.
- [06:51]
William Finnegan
It's true that the works in fast food industry are primarily black and Latino, but it's also true that they're primarily adults. That old mantra much repeated these days by politicians defending the minimum wage or even attacking the existence of a minimum wage. Rand Paul, Paul Ryan, people like this are saying, oh, it's just, you know, an entry level wage. I want my teenage kids to be making that, that's fine. It's not for supporting a family. That's a really, I mean, that once had more truth than it does today. Particularly since the Great Recession, McJobs are very often the only jobs available. And as George said, they're part time. It's not as if this Raise is coming soon and it's not at all as portrayed. The idea that the minimum wage is for people who don't need to support families is simply not true. The median age of fast food workers now is 28, mostly women. And most people I've spent time with for this piece, for instance, are considerably older than that.
- [07:51]
Dorothy Wickenden
George, we've talked a little bit here about the decline of unions in general, and I wonder if you could talk a little bit more broadly about how we've gotten into this terrible strait. You've written about Lawrence Lindsay, who designed George W. Bush's tax cuts. How does he defend Bush's record on income inequality?
- [08:09]
George Packer
Yeah, well, he twists a few facts around and plays with statistics to claim that income inequality did not increase under George W. Bush, which is false if you look at the relevant facts. And he essentially blames government transfer programs, things like food stamps and Medicaid for income inequality. It's a tough case to make, but he tried to make it at a hearing. I attended the Senate Finance Committee. I think what's really interesting about this movement that Bill's writing about is it's really the first nationwide workers movement that has kind of caught the spirit of this moral indignation at inequality and at the work, at the situation of the working poor. I mean, this has been happening for decades, decades, ever since the decline of manufacturing in the 70s, the offshoring of our industrial jobs, and the decline of the private sector union workforce down to 7%, which is where it is today, along with the rise of a right wing political ideology which is very anti union and anti government activism in terms of remedying the situation. So we finally see workers in one sector beginning to organize themselves. As Bill says, it's not. It doesn't seem like a union campaign. It seems like more of an activist campaign and it's based more in community centers than it is in unions. And yet I think that their voices catch the awareness of the public, of the situation of workers in all sorts of other sectors who may not be making their voices heard as loud in retail, for example. So it's right now a small thing. It is not a successful thing yet, but it's the first thing we've seen that speaks directly to a situation which is, you know, that you can work extremely hard and never get your head above water, which flies in the face of all the arguments about the reason why people are poor being their own fault. In this case. You read about the woman in Bill's story and, and you say this woman is doing everything Right. And she's poor and we know that there are millions like her. So there is finally a national movement that I think will only get stronger. And Obama's words on Labor Day were powerful. And it made me think of the Obama of the community organizing years in Chicago and the Obama of the Senate campaign in 2004 that Bill wrote about a long time ago. My guess is he is deeply sympathetic to this as president. He's not going to align himself with it entirely and choose sides and become an activist. But my guess is if Obama weren't president and were an activist still, he'd be on, he'd be involved in this.
- [10:50]
Dorothy Wickenden
Well, and you're raising a really important and interesting point there. And I wonder, Bill, if we are seeing in some of these movements, say in Seattle, the involvement of people from the 1%, say, or people in higher economic levels than the people who are hurt most by income inequality, or have these demonstrations and has the push come mostly from the organizing of these workers?
- [11:13]
William Finnegan
I think it's really come from the bottom. And as I say, the union has been crucial in actually organizing people and helping give them the confidence to defy their employers and make all this noise. And as George says, this is as yet a small thing. I mean, it's getting lots of publicity. But as a labor economist I interviewed said, it's still more air war than ground war. You know, we're not about to see a shop floor vote for unionization and fast food industry, you know, overseen by the National Labor Relations Board, the traditional model. But I also think George is right that this is striking a loud chord with other working families, working poor across the country and people who are sympathetic to the people on the bottom side of this incredible rise in inequality. And a lot of cities do have higher minimum wage than the federal, and a number of states do too. And the argument against the minimum wage or a minimum wage income increase, which is that it hurts job growth or it causes job loss, has been pretty well refuted in recent years by the fact that the states and cities that have raised minimum wage have consistently outpaced in economic growth. Those states and cities that have not. You know, there are conditions that allow a state or a city to raise a minimum wage and so it becomes a chicken and egg problem. But it definitely hasn't been the disaster for economic growth, particularly in low wage jobs that a lot of conservatives have predicted.
- [12:45]
Dorothy Wickenden
So why does a massive company like Walmart object to this so much? They are their business caters to people on the middle to lower end of the economic spectrum. If their consumers can't buy their products, aren't they being hurt more than they would be than if they raised the minimum wage?
- [13:00]
William Finnegan
Well, it's sort of an argument around the margins because of course the companies say, well, we'd have to raise prices. And they're fighting a kind of as a sort of trench warfare and they know they're going to have to give up some ground. But basically it's their model to get this incredibly cheap products primarily made overseas. Talking about Walmart or incredibly cheap food, you know, it's a low wage model, it's a poverty wage model. And that's not the only way to deliver fast food. I mean, there are regional chains like In N Out Burger in Southern California where I come from that has a starting wage of $11 an hour. They've got 300 stores. It's not a small company. They've got a full benefits package. A completely different model. And the burgers are cheap and they're really good. And in plenty of other countries. McDonald's for instance, is in 119 countries. I mean, they're one of the largest private corporations in the world. And they pay in Denmark, for instance, more than $20 an hour as a starting wage for people over 18. And there's a union and the Big Mac is 35 cents more there than it is here. I mean, it's quite possible to do, but they'd have to sort of change their model. And of course their model includes enormous pay for executives. These are really, really profitable corporations. The average pay of top fast food executives last year was $24 million a year. In this country.
- [14:19]
Dorothy Wickenden
George Thomas Piketty, French economist, published a book this year about rising inequality called capital in the 21st century. Not a very scintillating title, but it got a lot more attention than most books of its kind. And he said that the level of inequality in the United States is probably higher than in any society at any time in the past, anywhere in the world. To Americans, that should strike a feeling of alarm and shame.
- [14:45]
George Packer
And if it were only because people at the very top, the 0.1%, are so rich today that the charts are off the charts, then you could say, well, everyone is doing better, so why should we begrudge a few CEOs and entrepreneurs and executives their windfall? But that's not the reality at all. The reality is that is happening at the top end. At the bottom end, people are barely treading water, if not sinking. So it is no longer an argument about relative wealth. It's an argument or relative income. It's an argument about absolute income. To me, it has to go beyond just the numbers because it really is about whether you can have a society where people perceive a fair and equal opportunity, a level playing field where things like schools, job prospects, health care outcomes, et cetera, are not completely dependent on to whom you're born and where you go to school. But we are more and more a society of inherited wealth and inherited status. And that cuts so dramatically against America's idea of itself as a land of opportunity for all who are willing to work for it that it really undermines, I think, our democracy. And in Washington, where money talks louder than ever, it undermines democracy in a very direct way. So I think there's just no argument anymore to be made that inequality is just a matter of looking at the numbers a certain way. And in fact, Americans have large screen TVs and spend a lot of money on entertainment, which is an argument that people who don't think inequality is a problem make. In fact, yes, some poor people do make unwise choices in how they spend their money, but the reality is they just don't have much money to spend. They have almost no excess money. One of the characters in Bill's piece says, I can't afford nothing. And that's something I've heard over and over again and seen over and over again. And not just amongst people who you would think of as sort of the chronically poor or the underclass. This is people who've sunk into the level of the working poor from once having had relatively secure blue collar jobs that no longer exist.
- [17:08]
Dorothy Wickenden
You know, what you both are talking about essentially is a kind of re emergence of left wing populism. And Elizabeth Warren comes from that end of the political spectrum and there are others. And George, I wonder, as we do think ahead toward 2016, how do you see this playing out in the presidential elections?
- [17:29]
George Packer
I honestly don't know the answer because has it really captured the imagination of a majority of voters? Is it something that people would actually make a decision on the basis of? I'm not sure about that. I think it would take a candidate who really put this front and center and kept hammering on it, both within the Democratic Party and against the Republican Party. And I don't know that Hillary Clinton is that candidate. I mean, she obviously has liberal views about inequality and about the activist uses of government. That's her background. But she hasn't given this full throated support. And I think yes, Elizabeth Warren is much more likely to, but Is she going to run? People seem to think probably not. And so I'm not sure this is going to emerge in 2016 unless there's a candidate who really makes it the loudest issue of the campaign.
- [18:22]
Dorothy Wickenden
What do you think, Bill?
- [18:24]
William Finnegan
Yeah, I think the same. I know the fast food workers have been sort of waiting for Hillary to step up and say something in their support, and there's been nothing significant.
- [18:33]
Dorothy Wickenden
Okay, thank you. Both George Packer and William Finnegan are staff writers. George is also the author of the An Inner History of the New America. This has been the Political Scene from the New Yorker. I'm Dorothy Wickenden.
- [18:46]
William Finnegan
You can subscribe to this podcast and other free New Yorker podcasts in the iTunes store, and the weekly audio edition of the magazine is available@Audible.com New Yorker subscribers can access the digital edition for tablets and phones at no extra charge from the App Store or from Google Play.
- [19:07]
George Packer
Right now, we are living through some of the most tumultuous political times our country has ever known. I'm David Remnick, and each week on the New Yorker Radio Hour, I'll try to make sense of what's happening alongside politicians and thinkers like Cory Booker, Nancy Pelosi, Liz Cheney, Tim Waltz, Ketanji Brown Jackson, Newt Gingrich, Robert F. Kennedy, Jr. Charlamagne, tha God, and so many more. That's all in the New Yorker Radio Hour. Wherever you listen to podcasts from PRX.