Massive levels of income inequality, and the accompanying army of low-wage service positions, have defined America’s cities in recent decades. The unionized manufacturing economy that propelled so many working class families upwards is a shriveled remnant of its former self, replaced by urban economies dependent on universities, hospitals and sleek towers of white-collar professionals. For the majority of urban dwellers who lack the degrees necessary to rise past minimum wage positions within these anchor institutions, there are minimum wage jobs in the restaurants, laundries, stores that service the downtown engines.
“Look at almost any major urban center in the U.S.—Philadelphia, Detroit, Baltimore—and you see the hulking remains of a manufacturing economy,” says Mark Price, labor economist for the Keystone Research Center, a Pennsylvania think tank that focuses on economic issues. “When you think about Philadelphia manufacturing has been replaced by an hourglass economy, jobs at the top, a few in the middle, and a lot at the bottom.”
Across the country, one out of every four jobs now pays less than $10 an hour and are largely concentrated in these traditionally low-paying sectors, according to a recent study by the National Employment Law Project. These sectors are growing faster than overall employment in the U.S., and the Bureau of Labor Statistics estimates that the next decade will bring more of the same.
While armchair revolutionaries and pundits have been talking about the problem for years, and with labor union organizing stymied by an outmoded labor law structure, little material progress had been made towards stopping the gap from growing further. There are signs, however, that things could be changing.
Earlier this month, Walmart employees in twelve cities went on strike, a level of coordinated action unprecedented in the company’s history. (The numbers of employees who actually walked out are quite small—90-odd workers of the mega-retailer’s 1.3 million in the U.S. and 2.2 million worldwide—but it is worth remembering that the sitdown strikes that eventually organized the auto industry were also accomplished by a slim segment of the workforce.)
These actions against the world’s largest private employer is particularly relevant to cities not only because the strikers were concentrated in urban regions—the wave of walkouts started in Los Angeles and spread to Dallas, Seattle, the San Francisco Bay area, Miami, the Washington, D.C., area, Los Angeles, Sacramento, Chicago and Orlando, as well as parts of Kentucky, Missouri and Minnesota— but also because Walmart has moved aggressively into the urban market. In recent years, the Arkansas-based retailer expanded its presence in Chicago, Atlanta, Los Angeles, Miami, New Orleans, and Washington D.C. New York and Boston have been high on the city’s hit list for year and the company has put significant resources into waging a PR battle to enter those markets. It’s not farfetched to imagine that in a few years time, Sam Walton could be a major employer in multiple American cities.
Looking beyond Walmart, and outside of traditional organized labor, other attempts to organize low-income workers can be found.
In Philadelphia, not too far from downtown’s shiny towers and ground-floor bistros, the Restaurant Opportunities Center, which helps restaurant workers organize against wage theft and unsafe work environments, recently opened a new office.
It’s not hard to see why they decided to open up shop in Philly. Here, according to a recent ROC report, restaurants raked in $2.3 billion in 2007 (most recent year data was available) and the industry grew by 40 percent, while wages declined by 11 percent since 2001. The industry is rife with labor law and wage violations; Some 40 percent of Philly restaurant workers worked off the clock without pay and almost 58 percent were not paid overtime, ROC reported.
“We have done same research in eight other and we run into the same problems across the industry, across the country,” says Fabricio Rodriguez, lead coordinator of ROC Philadelphia. “And all these features that people in the restaurant industry face every day are very common in the [anywhere in] service economy.”
Organizers with ROC, OUR Walmart and other non-traditional labor organizations hope that successes across a significant segment of this workforce could prompt wages and standards in all low-wage industries to rise. “The restaurant industry shares a very similar low-income strategy with Wal-Mart,” says Sheila Maddali, Research and Policy Coordinator for Philadelphia ROC. “Our goal is to raise standards across the restaurant industry—which comprises 47% of the low wage workforce—which would then raise standards in other low wage industries.”
If ROC and its allies succeed in raising employment standards in the service sector, the benefits will extend beyond those directly affected workers to the cities they call home. Higher incomes will mean more tax revenue and higher rates of home ownership. Better working conditions will mean fewer parents who can’t attend teacher conferences and more who can take the time to take part in the neighborhood groups that keep city blocks thriving.
“Raising wages in these sectors is one of the most important things we can do to increase quality of life in these cities,” said Price, the economist from the Keystone Research Center.In other words, there is a tip in the jar for cities. They just need to grab it.