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Thursday, November 7, 2013

Service industry wages bad for North Carolina's economy

Posted by on Thu, Nov 7, 2013 at 10:47 AM

Willetta Dukes has worked in the fast food industry for more than 16 years, at McDonald’s, Church’s Chicken and now, at Burger King. She lives in a spare room in her son’s house and questions why she must resort to government assistance to survive.

Dukes is one of 66,000 fast food workers in North Carolina receiving some kind of public assistance, at a cost of $264 million a year to state taxpayers who subsidize low wages in the fast food industry.

At a forum at the North Carolina Justice Center Wednesday night, workers like Dukes, activists and elected officials explained how paying service industry workers minimum wage is bad for everyone.

North Carolina has shifted away from manufacturing jobs that pay middle-class wages to low-wage service jobs which now account for 83 percent of the state’s total employment, said Clermont Fraser, an attorney with the N.C. Justice Center.

On top of this, North Carolina is a “right to work” state, outlawing workers’ unions, lowering workers’ wages and benefits, and therefore reducing consumer demand and cash flowing into local economies, with the overall effect of shrinking the number of jobs in the state.

Sen. Earline Parmon, D-Forsyth, explained the political connection.

“We have a state House speaker who vowed to keep people working for minimum wage, and to keep North Carolina a right to work state,” Parmon said.

In his opening address to the N.C. legislature in January, House Speaker Thom Tillis promised to keep North Carolina union-free and said he would like to see a “right to work” provision in the state constitution.

Parmon, who sponsored a bill last session which would adjust North Carolina’s minimum wage based on increases in the cost of living index, said she is “appalled” to see working people have to rely on public assistance to barely make ends meet.

SB 220 was never heard in the Senate, she said, but sent to a committee instead.

“North Carolinians need to know what their elected officials think about their working status,” she said. “They don’t respect it enough to even hear the bill.”

Fraser agreed workers' rights issues are not a priority for N.C. legislators right now, citing the House bill gutting unemployment insurance, which went through in two weeks with little input from workers. 

"The unfortunate reality is we can't count on our elected officials as a whole to make the changes we need," she said. 

A physician from Rock Quarry Family Medicine, a Raleigh practice that treats patients without insurance, said low service industry wages, no health benefits and poor nutrition from cheap fast food are a “triple whammy” to many of the patients he sees.

“People are dying over this issue,” he said.

Kevin Rogers, Policy and Public Affairs Director for activist group Action NC, is optimistic that minimum wage will increase. He pointed to the number of “young, hungry progressives” elected in North Carolina Tuesday.

“It has to happen,” Rogers said. “It’s clear there needs to be a change. People are trying to support their families and they can’t do it. Why can’t these corporations raise their wages?”

Parmon said it will take a concerted effort from voters, taxpayers, politicians and people from all sectors of the service industry.

“I’m encouraging you, I will stand with you, speak with you,” she said. “But it will take everybody. The big boys will have to come around, but as long as you allow them to intimidate you, they will win.”



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A panel explained why low wages in the fast food industry are bad for workers and taxpayers alike, and for the economy overall.

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