You Need to Know This About Minimum Wage Workers and St. Louis

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Minimum wage in St. Louis

St. Louis is one of the cheapest cities in America. In May 2013, it became the third U.S. city to launch a fast food strike, following New York in November 2012 and Chicago in April 2013. When McDonald’s released a model budget for fast food workers, it was derided as “ridiculous” and “hilariously obtuse” — except in St. Louis.

“When I lived in St. Louis, my roommate and I each paid $425 per month for our comfortable two-bedroom, two-bathroom apartment in one of the city’s nicer neighborhoods,” wrote the Washington Post’s Timothy Lee, adding that living off a fast food salary was “completely plausible in typical U.S. cities.”

St. Louis is indeed a typical U.S. city. It is the sort of typical U.S. city so rarely included in national media coverage that the idea that it is easy to be poor here — that it is easy to be poor — is accepted without question. If you have social capital, education, and a job that pays you enough to live above the poverty line, St. Louis is a bargain. But if you grew up in poverty in St. Louis, if you bear the brunt of St. Louis’s burdens, then you cannot be a player in a poor man’s town. You are its discarded casualty.
…..

It was not easy to get an interview with Patrick, or any of the St. Louis fast food workers with whom I spoke.

Fast-food workers begin each week with uncertainty. They do not know how many hours they will work or when those hours will be. They do not know whether they will come up with the cash — and it is always cash — to make it to the job. They do not know if the lights will still be on when they get home. They do not know where, in a few months, home will be. They hunt for cheaper or easier or safer, knowing that to combine them is impossible.

When I ask workers if I can call with follow-up questions, they tell me they no longer have a phone or worry about wasting prepaid minutes. Meetings are canceled because the car runs out of as, because someone’s child needs to be watched, because an unexpected opportunity arises — extra hours on the job, or a chance to do some paid yard work for a neighbor.

The paradox of poverty is that tomorrow is unpredictable but the future never changes.

…..

Fast-food workers often refer to “the struggle” — not in a dramatic way, but as a synonym for life. The struggle is what people did not know about, they tell me. The struggle is what people cannot see, even though the struggle is happening right in front of them.

“If I had more money, there wouldn’t be the struggle,” Jenina, a 20-year-old McDonald’s worker, explains. “I would set a budget and it would be a good budget. I wouldn’t have to worry about paying rent or utilities. I’d still help my momma. I’d be able to get a bus pass. I’d go back to school. I’d do a lot.”

Jenina dropped out of nursing school after her mother lost her job, because she needed the tuition money to pay bills. Her income from McDonald’s, where she started working as a high school senior, helps support her mother and younger sister. Patrick’s Chipotle income helps support his mother, a makeup artist who has struggled to find steady work since the recession. Krystal’s Taco Bell income helps support her son; her sister, who lives with her and works at Jack in the Box; and now, her newborn daughter.

Every worker I interview is supporting someone: an unemployed parent, a child, a sibling, a friend. Most of their friends and family members work in fast food or other service industries. Everyone is in their twenties or older. All but one is African-American.

Minimum wage work in the United States is no longer a job. It is a social position, passed on from generation to generation. The idea that their own relatives, their own children, would end up in the same fast food jobs they loathed was viewed as so inevitable that workers never remarked upon it directly. But it emerged over and over in casual conversation.

It is February and Krystal is telling me she and her six-year-old son may be heading to Kansas City with her boyfriend. He heard there were better jobs out west. He might be able to get carpentry work, or drive a truck. Krystal is not sure what she will do. She dreams of going to nursing school, but suspects she will “transfer” to another Taco Bell to make ends meet. Her baby is due in a few days. I ask how she sees her family’s future.

“I see…” she says, and pauses.

“My son, for whatever reason, he wants to work at Taco Bell when he gets older. And I just hope that when it does come time for him and the other younger kids to get a job working in fast food that they can have peace of mind. I hope they can say, ‘Hey, I can work here, I can make enough, pay what I need to pay, take care of my family.’ I hope he doesn’t have to go to work and be judged by anybody.”

Minimum wage in St. Louis
{“Have you had your break today? NO, but it was still taken out of my check!!” – image by Sarah Kendzior}

…..
Poverty is a punishment for the crime of living. In St. Louis, it is a shared sentence.

St. Louis is an anomaly for large American cities in that the actual city has only about 300,000 residents. Most of the metropolitan area’s nearly three million people live in the surrounding St. Louis County. The county consists of dozens of suburbs ranging from poor to opulent, and its regions are designated by their relation to the city — for example, North County.

To follow a fast food worker’s commute is to trace St. Louis’s long history of racial segregation, economic decline, and fear. Most workers with whom I spoke grew up and still live in North County towns whose populations changed dramatically over the past three decades: a phenomenon one observer bluntly described as “ghetto spillover”. Once the suburbs of white flight, these towns are now the destinations of black flight, as struggling African-American families seek a safe and good life outside the crumbling terrain of the inner city.

St. Louis residents are defensive about the city’s reputation as one of the most dangerous in the U.S., and for good reason. St. Louis is civic-minded and family-friendly, and violent crime is rare outside certain areas — where it is rampant.

The truism that St. Louis is “not dangerous” belies a darker truth: the people for whom it is dangerous are not supposed to matter.

Drive through northern St. Louis and here are some of the things you find: A 12-bedroom, 8-bathroom 19th century mansion with a carriage house on the market for $185,000, the price falling every year. A 57-acre forest in the center of the city where the Pruitt-Igoe housing complex, demolished in 1972 after decades of degradation, once stood. Kinloch, the oldest African-American community incorporated in Missouri: population 6,000 in 1960, population 299 in 2010. Houses with no doors or windows and the pipes torn out of the walls. Houses that are frames because someone stole and sold the bricks. Houses with people still living in them, wondering what will happen next. The average life expectancy in North St. Louis is lower than that of Iraq. Almost everyone in North St. Louis is black.

There are few functional businesses in North St. Louis. Drive out of the city limits to the fringes of North County, where many of the fast food workers live, and things start to look up. Next to the decaying buildings are signs of life: a payday loan store, a title loan store, a dollar store, a pawn shop. The economy is poor because the people are poor: possessions, here, are not what you own but what you trade to survive.

St. Louis is a typical U.S. city in that it is many cities in one. Fast food workers take the bus to the nicer areas, where the businesses are, where the people with money are, away from where they live. They look out the window and watch opportunity pass them by.

_______________________

*This article is comprised of select excerpts from “The Minimum Wage Worker Strikes Back. Across the U.S., fast food workers are asking: “What am I worth?” by Sarah Kendzior on Medium. It is reposted here with the author’s permission. Please click on the link to the full story and read it in its entirety.  Alex Ihnen, Editor – nextSTL

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  • flyover

    I think the problem is that we have not come to grips with the new economic reality. Our country’s educated masses historically gave us a leg up on manufacturing jobs that required literacy. Now, that isn’t unique and the rest of the world will work for less. Throw in automation and if you are unable to adapt, you are on minimum wage, or worse. I always think back to when I bought my first new television. It was a 19″ RCA and it cost me two weeks pay. Just yesterday, I was in Costco and for the same money (not adjusted for inflation), I can get a 32″ flat screen. The RCA was made in America. Who knows where the flat screen was made. Our society has made the decision it is more important to buy cheap stuff than stuff made here by Americans earning a decent wage. We are not going to expand the middle class by artificially raising the minimum wage. As someone who ran a business for many years, I guess I look at it a bit differently. You can’t just raise the minimum wage. What about the guy who started a year ago and is making a dollar more than minimum wage? You can’t start people at the same wage without irritating a veteran employee, so, you have to bump him, too. Then there is the guy who was a buck above him. What happens is everyone gets a raise, but prices don’t go up because there is no law that forces everyone to pay higher prices. There is still competition the business has to deal with and if prices go up, some customers will just not be able to buy anymore. So, while it seems simple to just wave a magic wand and everyone has an extra fifty or hundred bucks a week, the real world doesn’t work that way. Our country seems to have made the decision we no longer want or value manufacturing jobs. A cheaper work force was only one reason the jobs left. Onerous regulation, unrealistic union demands, frivolous litigation risks all played a part. Manufacturing jobs were the next step up from minimum wage and they are mostly gone, now and with them the middle class. Someone said recently our future will be suing each other and delivering each other’s pizzas and the guy who writes the app to facilitate lawsuits for late pizza delivery will be a billionaire. Until we replace manufacturing with something, I fear not much is going to change and we will have a society of adapters and survivors.

    • Alex Ihnen

      It would seem that the real world doesn’t work that way in this county because we have made policy decisions that make it so. There are models for the United States around the world. People still buy TVs and cars in Australia where the minimum wage is ~$11US. It’s the same in Canada. Our nation is the richest on earth, our value system translated through government has dictated that now multiple generations of Americans can not earn a basic living working full time. Most people likely agree about the basic framework of the problem, but some believe that society should and can change, and that a shift in values can change the human condition for the better. The status quo for minimum wage workers in our country should be intolerable.

      • flyover

        The problem isn’t that minimum wage jobs don’t pay enough, the problem is that we don’t have real jobs that do. When I graduated from high school a hundred years ago, I had the opportunity to take a job at a steel mill which paid $250 a week. That was big dough back then. Or, I could work three part time jobs which would give me the opportunity to attend college full time. Today, it really doesn’t sound like much of a decision, but back then, many, if not most kids coming out of high school opted for the real job. Those people got a big head start on those of us who went to college, They bought houses sooner, started families sooner and it took us years to catch up financially. Back then, they live a good life. Today, those jobs don’t exist. I want everyone to make as much as they can. However, I also know that you can’t simply legislate your way to prosperity. The economy will react to that stimulus. While some people will make more money, others will lose their jobs. Some companies will fold. The pendulum that swung left after the crash needs to swing back and help create more jobs. We need to allow corporations to bring back the hoards of cash they have stashed overseas because our tax policy demands it. But, our government continues to wish and hope they would bring it back at the full tax rate. They won’t. A system that would allow them to repatriate the cash in exchange for creating jobs here seems a no-brainer, but we are talking about Washington where common sense isn’t so common. By pretending that jobs that have always been temporary, minimum wage jobs are career jobs, we are only fooling ourselves.

        • dempster holland

          As to overseas profits, we should simply tax them wherever
          they are earned, and not give them another tax break. The
          real problem in this country is that the upper income group
          has doubled its share of national income from 10 to 20 per
          cent, and continues to drive down everyone’s wages by fighting
          unions and opposing minimum wage increases. This small
          group of rich people are destroying our country and we
          must find some way to stop them

          • flyover

            How do you propose taxing foreign entities? The reason the cash isn’t repatriated is it is held by foreign subsidiaries. If you try to force the US parent to pay, they will simply move their headquarters overseas. Our corporate taxes are not competitive with other countries. This would be a perfect example of charging less and getting more.

          • dempster holland

            normally, companies file consolidated tax returns, and the
            income of subsidiaries is consolidated into the income of
            the parents. If doe some reason it is not, the tax code could
            be amended. If the owners of companies are so unpatriotic
            as to move headquarters overseas. the tax code could be
            written to tax them as if their headquarters were located
            here. It is common in the tax code to treat substance over
            form,

          • flyover

            I agree laws need to be changed. It really has nothing to do with patriotism, the laws established post-Enron require managers to do it. If a CEO/Board does not take every step available to maximize the value of the shares, the managers are subject to be sued for mismanagement by shareholders represented by the trial lawyers who live to find such omissions. CEO’s and Boards are only playing by the rules set up by Congress. My old company used to own about 17 subsidiaries in Europe. They were all consolidated into one holding company in the UK. We never brought a penny back. We would use the cash for foreign operations and, if necessary, as collateral for loans here, but the accountants would never let me bring the money here. The taxes would have been onerous. Apple reported has so much cash off-shore that it borrows against those funds to pay its dividends here and in spite of paying interest on the loans, still comes out ahead versus bringing it here. So, as you say, the law should be changed. The risk is that Apple could simply become chartered in Bermuda. The staff could still live in Silicon Valley. It isn’t as easy as it sounds. A more sensible option is the one I first mentioned and that is to allow the cash to be brought back at a lower rate, but with some agreement that it will be used to create jobs here.

          • dempster holland

            I see no reason why these corporations should pay lower
            taxes than everyone else. The law should include a pro-
            vision that the site of the charter does not determine tax-
            ation, but the location of the staff does. Many states have
            similar laws designed to overcome such tax-evading tac-
            tics. And it has everything to do with patriotism. If the
            fiduciary laws established post-enron encourage off-shore
            location, those should be changed. The issue is whether
            there is a political will to make these changes. If there is,
            all the objections you raise can be overcome

          • flyover

            They do pay the same rates as everyone else. The way the current law is written, they just don’t have to pay unless they bring the dollars home. That goes for you and me as I proved when I build an international component to my business years ago. So, you can look at it as if they are paying less, or you can look at it as if they were actually paying more if you assume they are under no obligation to pay anything if they keep it offshore. The goal should be to get them to pay more, it should be to create an environment that will create more jobs so we can move people out of minimum wage jobs and into careers.

          • neroden

            You’re simply wrong. The issue is not true international subsidiaries (which will be taxed in their home country); the issue is scam-based transfers of US income to essentially-phony international subsidiaries (which usually don’t get taxed by the tax-evasion-haven countries they’re located in).

            You mention Apple’s scam — it involved
            (1) transferring “ownership” of US patents to an Irish subsidiary (this can be made illegal — they’re US patents, they can be required to be owned by US entities),
            (2) paying over-market-rate “licensing” fees to the Irish subsidiary, thus eliminating US profits and generating Irish profits (this can be made illegal — again US patents, US rules)
            (3) and then “borrowing” the profits of the Irish subsidiary in the US (this can be made illegal — we’re already not allowed to borrow money abroad without special permission from the Treasury department, and there’s no reason it should grant permission to scam artists like Apple).

          • flyover

            Sure a lot of things “can be made illegal,” but that doesn’t mean they are now, or that I am wrong.

          • neroden

            If Apple charters in Bermuda, we dohn’t have to allow it to operate in the US.

            That’s the big hammer. Back in the 19th century, our government *used it*. When companies tried to run tax evasion scams, the US would simply revoke their business licenses.

            We need to get back to that kind of enforcement.

            You propose another stupid giveaway to the tax-evading crooks. A better move would be to declare such tax evasion schemes criminal and punishable by revocation of business licenses.

          • neroden

            The US permits all kinds of shenanigans involving foreign “subsidiaries”. We don’t have to permit any of them.

            Most of the supposed “foreign income” was actually earned in the US, transferred to “foreign entities” using goofy schemes involving patent licenses, and then lent back to the US parent and stashed in US banks.

            This is just tax evasion, and it’s trivial to tax the money.

        • STLEnginerd

          Honestly a big part of the problem is that the corporations are incentivised to keep these jobs as “part-time” jobs. Jobs under 35 hours were consider part-time, now with Obamacare the level was lowered to 30 hours. Obvious result everyone hours got cut by 5 hours a week. Simple solution is to eliminate the distinction. Benefits should be paid as a percent of full time employment. 30hrs = 3/4th the benefits of a full time worker. This would actually motivate employers give more than 40 hrs because benefit contributions would not be greater beyond 40 hrs per week.

          Anyone who thinks a factory line job is any more or less stressful or complicated than working a McDonald’s has probably never worked at either. A McDonald’s is just a little food service factory. The jobs are equivalent. Its not necessarily a job you aspire to, but all work is respectable and it is about all there is out there for people with high school and less education levels.

          • flyover

            Good points. I think you are right we are going to see a lot more part-time work with ObamaCare. I am not sure how your percent system would work. What if you only worked ten hours? Would they pay 25%? What if the employee couldn’t afford to buy the insurance? But, it is an interesting idea.

          • STLEnginerd

            Short answer is yes.

            Its assumed that anyone working 10 hours at one job is working 30 hours at another job. Otherwise they are probably near homeless (very possible but not the norm) so the remaining 75% would be covered in that job. The point is to remove the incentive for employers to hold down hours worked so that most likely the person would get to work 40 hours a week at one job instead of having to have two. I suppose there could be an issue of double dipping. If someone worked 40 hours one place and another 20 somewhere else do they get 150% paid to benefits. Not even sure if that is really a problem after all they worked for it, but if it is then that could be dealt with through additional legislation.

          • flyover

            You could fix that by requiring the money is only paid to an insurance plan.

          • dempster holland

            With two jobs, you can end up with excess social security
            payments being withheld. When you make out your tax
            return, there is a provision for getting the excess back

        • neroden

          “When I graduated from high school a hundred years ago, I had the
          opportunity to take a job at a steel mill which paid $250 a week. That
          was big dough back then.”

          That was due to unionized steel mills. Fact.

        • neroden

          “However, I also know that you can’t simply legislate your way to prosperity.”

          Well, you can. It was called “protectionism”.

          As for the money which is being illegally treated as “overseas”, it’s been documented that it’s actually in US banks. The government could tax it at 100% just by passing a law to do so.

          There is no reason to coddle the thieves and fraudsters who are running US companies who pretend to have money “overseas”. They like to commit tax evasion. Don’t let them get away with it.

      • flyover

        By the way, Alex, I am very happy to have found your website. I think you do a great job presenting things that don’t get much coverage elsewhere. I am sure I won’t always agree with you or most of your readers, but I hope you won’t mind hearing from competing opinions from time to time.

        • Alex Ihnen

          Thanks, and welcome!

    • http://donspoliticalblog.blogspot.com Don

      It’s simply not true that the rest of the world will work for less than American workers. And I’m not sure it was ever true.

      American workers will never complete with workers in the developing world, but that doesn’t mean manufacturing in the U.S. doomed. In fact, manufacturing jobs are growing again and that’s because for many products, it just makes economic sense to manufacture in the U.S. With the right polcies, we could do even better.

      American manufacturing wages are among the lowest in the developed world with the fewest benefits. Factor into this that American manufacturing works have some of the least benefits and the cost to manufacturing in the U.S goes down even more.

      • flyover

        Other than cell phones and watches, there’s not that much manufacturing in Norway and Switzerland. We still have much more manufacturing than Germany and Canada. Your are talking about the “developed” world. We are, unfortunately, competing with the “undeveloped world.” If you think there isn’t a material difference between 34.74 and 6.23, you haven’t spent much time in business.

        • http://donspoliticalblog.blogspot.com Don

          Germany is a perfect example of my point. Germany’s entire population is 82 million people (just over 1/4th the U.S population). Germany by 2011 had become the world’s second-largest exporter (after China). Germany’s exports have contributed two-thirds of the country’s economic growth over the past decade and have driven its GDP per capita to increase faster than that of any other major industrialized country. This is of course based upon their manufacturing sector which employees per capita 3 or 4 times as many jobs as the U.S. manufacturing sector and yet their wages are considerably higher than those in the U.S. (never mind the German Gov’t mandate of 6 weeks paid vacation for everyone with a job). http://www.foreignaffairs.com/articles/67899/steven-rattner/the-secrets-of-germanys-success

          There is more to a manufacturing economy than disposable electronics and textiles. Germany manufactures iron and steel, mineral fuels, chemicals, plastics,
          production machinery, vehicles, trains, machine tools, electronics, shipbuilding, space and aircraft, optical and medical
          apparatus, pharmaceuticals, in addition to textiles and agriculture. The U.S also manufactures these things and does so considerably cheaper than Germany.

          The suggestion that manufacturing is no longer viable in the industrialized world is at best uninformed.

          • flyover

            I never said it was no longer viable. I said our country no longer welcomes manufacturing jobs. They are often environmentally offensive to the greens who can make opening new plants expensive, if not impossible. I would be interested in seeing how our regulation and litigation systems compare to Germany’s.

    • rgbose

      Transportation subsidies help make manufacturing far away cheaper than it would otherwise be, undermining local manufacturing.

    • dempster holland

      The normal response to the argument that increased minimum wage
      decreases demand is that the increased spending by minimum wage
      earners increases demand, and the result is a wash

      • flyover

        Just not for the businesses having to pay. It is easy to look at the macro view and say it is fungible, unless you are one of the workers let go when your small employer can no longer afford to keep you. Knowing that perhaps somewhere another business has hired another worker would not be much solace to the guy let go.

        • dempster holland

          American businesses are constantly firing people to
          increase their profits. We hear little concern from them
          about that. It is only when we attempt to pay people a
          living wage or provide health care that businessmen
          suddenly profess their great concern for the workers

          • flyover

            But, in a free society, they don’t have to do that. I gave stock options to every employee. I could have kept it for myself, and I would like to tell you I did it because I am a nice guy, but I did it because I felt it would motivate people. I was right it did and I probably made more than I would have by keeping it all. Our first receptionist who took a lower salary with options later paid cash for a new house. The problem is we are competing internationally. Things have changed since we were kids. That’s why I say we’ll have adapters and survivors for a long time.

          • neroden

            The problem is, in a free society, the business owners or managers CAN be sociopathic jerks, and it’s profitable.

            We want business owners who behave more like you, but your behavior isn’t typical. The incidence of sociopathy among CEOs appears, according to studies, to be 4 times the incidence in the general population, and they tend to rise to the top.

            This is why we need government regulations to prevent business managers from being sociopathic jerks.

  • http://donspoliticalblog.blogspot.com Don

    “Poverty is a punishment for the crime of living. In St. Louis, it is a shared sentence,….”

    While I’m very sympathetic to your cause, making people victims is rarely helpful.

  • Eric Fischer

    I’m not sure I understand how the title of the article relates to the content. What do we need to know about minimum wage workers and St. Louis? One unstated assumption seems to be that additional education/skills lead to higher income. One reason fast food workers are paid so little is that they are unskilled. There is a large pool of unskilled labor, so there is little need to bid up the price of labor in order to obtain an adequate supply.
    Note that one reason why there is a cycle of poverty is that the poor keep repeating the same destructive behaviors. You mention Krystal has a six-year-old son. You also mention that Krystal is about to give birth to another child. You mention Krystal has a boyfriend. Is Krystal cheating on her husband??? Perhaps it would be easier for Krystal to obtain a nursing education (instead of dreaming about it) if she didn’t have two children without a husband. Has Krystal’s son had a male around to model positive behaviors that will allow the son to obtain an education and escape the cycle of poverty?
    Sad article, but I’m not certain what the point is. Perhaps that being poor sucks, even in low-cost St. Louis? Thanks for the update!

  • Jeff Leonard

    Good conversation. I would interject one point: while the number of manufacturing jobs has DECREASED, the manufacturing output of the country continues to INCREASE (see link). How? Because the productivity of the manufacturing sector has gone through the roof. That’s why the workers left in manufacturing have to be incredibly skilled, at least compared to previous generations. So in many ways, we’re as competitive as Germany and Norway, job for job, but manufacturing isn’t as significant a segment of the overall economy. Same trends as agriculture.
    http://www.businessinsider.com/manufacturing-employment-as-low-as-1941-levels-2009-9