Striking Fast-Food and Walmart Workers As Stimulus

If workers now earning $8 an hour inside warehouses or at fast-food counters manage to get more pay, they are not going to hide the extra money in the Cayman Islands or leave it to their heirs via elaborate trusts. They will go out and spend it almost immediately, boosting their local economies.
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Workers striking at fast-food restaurants and Walmart stores around the country are seeking more than better wages and working conditions for themselves. Their mission could yield benefits that would flow to virtually everyone in the American economy, which, despite modest improvements, still suffers from a critical shortage of decent paychecks.

We ought to be cheering on these striking workers, because they are pressing to secure what would amount to a dose of private-sector economic stimulus at a time when the government has proven wholly incapable of delivering a meaningful jolt. If these workers earn more money, they will spend it and spur economic growth.

Ever since President Barack Obama took office, Republicans have been monkey-wrenching the economy in a failed effort to parlay American pain into angry votes for Mitt Romney. With next year's midterm elections in its sights, the GOP is now redoubling on this cynical strategy, serving up a traditional offering of filibuster threats alongside a newly fortified helping of scandal-mongering to ensure that Washington is so dysfunctional that it can't agree on any spending -- not to hire teachers and cops, not to pay for social safety net programs, not for practically anything.

On its surface, the broadening labor movement among the lowest-paid ranks of the American workplace is a narrow development. People who make as little as $7.25 an hour are merely seeking to better their lot. Many of these people stocking aisles at big-box retail stores and squeezing ketchup onto hamburger patties at fast-food restaurants work full time, yet earn so little that they are poor by any official or commonsense standard. They cannot afford groceries or car payments, let alone pay for health care or support families.

My colleague Saki Knafo recently profiled a 22-year-old man whose job at a KFC in New York City pays so little that he relies on infusions of cash from a grandmother in Ecuador who earns her living operating a roadside restaurant in that country. Here is a potent challenge to the much-mythologized American Dream: The people who have stayed behind in a poor Latin American country sustaining those who left to better themselves in the supposed land of unlimited opportunity.

That grandmother in Ecuador has a good deal of company on the list of those whose sweat equity is being siphoned off as a subsidy for billion-dollar mega-corporations paying poverty-level wages. American taxpayers enable Walmart, Target, McDonald's and KFC to continue to find ample numbers of people willing to labor in their stores despite paying wages too low to finance nourishment or health care. These subsidies come via food stamps and Medicaid, the government health insurance for the poor.

These realities alone are enough to fuel hopes that the strikers get a bump in their earnings big enough to relieve them from the desperation that colors many of their lives. But a more self-interested reason ought to prompt virtually everyone to see their fortunes as aligned with those of the striking workers: Given the poisonous dynamic entrenched in Washington, the prospect that government will marshal a meaningful effort to spur economic growth is approximately as likely as mayoral aspirant Anthony Weiner posing naked in Playgirl Magazine.

Not only does the obstructionist GOP continue to embrace wrong-headed austerity as the curative for economic weakness, now Republicans are intent on ensuring that Obamacare winds up as a disaster, hoping to harvest the bitter votes that failed to materialize in large enough numbers for Romney. This is not only immoral -- depriving health care from tens of millions of people who would otherwise receive it under Obamacare -- but also bad economic policy: When poor people worry about their access to health care, they cut back on spending in other areas, further weakening the economy.

Against this sorry backdrop, the fast-food and Walmart workers angling for better wages present a potentially important element. For better or worse, they are the face of an increasingly enormous slice of the American labor market.

More than half of the jobs wiped out in the course of the Great Recession were concentrated within so-called mid-wage jobs, which pay anywhere between $14 and $21 an hour, according to a report from the National Employment Law Project, an advocacy and research organization. Fewer than 1 in 4 of the new jobs created since have been within those ranks. Low-wage jobs -- those paying $7 to $13 an hour -- saw far smaller losses during the recession, and have accounted for more than half of the job growth as of last summer.

If workers now earning $8 an hour inside warehouses or at fast-food counters manage to get more pay, they are not going to hide the extra money in the Cayman Islands or leave it to their heirs via elaborate trusts. They will go out and spend it almost immediately, boosting their local economies.

They will distribute their dollars at grocery stores, generating additional demand for agribusiness and the truck drivers who haul the crop to stores. They will leave their funds at hardware stores, as they address long-ignored problems in their homes; or they will perhaps hire carpenters and plumbers and electricians to do the work, enabling these professionals to buy trucks and add more workers. This additional commerce will shore up state and city coffers, enabling hard-hit school districts to add teachers to alleviate crowding.

In short, lifting the fortunes of the lowest-paid workers will improve the economy for virtually everyone.

The government is effectively on strike. The public sector has become almost irrelevant in the search for an economic fix. Enter the striking workers, seeking to get their hands on additional private-sector dollars -- a success that would ripple out in every direction.

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