Workers on Chicago’s Magnificent Mile Start a ‘Fight For 15’ (Dollars Per Hour)

Kari Lydersen December 5, 2012

Oh, the humanity! A new report notes Chipotle's CEOs made about as much in an hour in 2011 as their workers in Chicago made over the entire year.

CHICA­GO — The work­ers at Chipo­tle Mex­i­can Grill on Chicago’s Mag­nif­i­cent Mile quick­ly and effi­cient­ly turn out gourmet” bur­ri­tos and tacos with organ­ic and local ingre­di­ents for scores of shop­pers, tourists and busi­ness­peo­ple strolling this famous­ly tony stretch of Michi­gan Avenue just north of the Chica­go Riv­er. The pop­u­lar chain prides itself on offer­ing food with integri­ty” and cul­ti­vates a hip, sus­tain­able image.

But a report released Decem­ber 4 by the groups Action Now and Standup Chica­go! notes that the two co-CEOs of Chipo­tle, Steve Ells and Mon­ty Moran, earned a com­bined $38.9 mil­lion in 2011 while Chipo­tle work­ers are almost all part-time employ­ees who earn around $9 an hour. This, the report says, means the CEOs rough­ly earn in an hour what a Chica­go Chipo­tle work­er earns in a year.

Such a dif­fer­en­tial is not unique to Chipo­tle; it char­ac­ter­izes near­ly all the 50-plus pub­licly trad­ed retail and restau­rant out­lets in down­town Chica­go that the report ana­lyzes. Urban Out­fit­ters CEO Glenn Senk, for exam­ple, made $28.9 mil­lion total in 2010; and retired McDonald’s CEO James Skin­ner received a $21 mil­lion depar­ture package.

The report pegged aver­age com­pen­sa­tion pack­ages for CEOs of the down­town Chica­go out­lets at $8.3 mil­lion in 2011, while the medi­an wage for retail and restau­rant work­ers at these busi­ness­es was $9 an hour. This means that the CEOs are earn­ing about $4,000 an hour for a 40-hour week — more than 400 times what their typ­i­cal employ­ees earn.

The groups rec­om­mend rais­ing the hourly wage for retail and restau­rant work­ers in down­town Chica­go to at least $15 an hour across the board. They say this would actu­al­ly cre­ate 4,000 new jobs since var­i­ous stud­ies indi­cate the extra income earned by such low-wage work­ers would be rein­vest­ed in the local econ­o­my, spurring about $179 mil­lion annu­al­ly in new eco­nom­ic activity.

The Work­ers Orga­niz­ing Com­mit­tee of Chica­go, a rel­a­tive­ly new alliance of retail and restau­rant work­ers from more than 100 employ­ers, has like­wise launched a cam­paign called Fight for 15” demand­ing down­town busi­ness­es pay at least $15 an hour for retail and restau­rant jobs. Mem­bers marched amidst crowds of shop­pers in down­town Chica­go on Black Fri­day, and joined nation­wide actions against Walmart.

While the report does not call for a spe­cif­ic man­date or gov­ern­ment action, Standup Chica­go! pol­i­cy ana­lyst and research coor­di­na­tor Eliz­a­beth Parisian told Work­ing In These Times that a city ordi­nance or oth­er gov­ern­men­tal action is a role that’s always there for the city coun­cil or city admin­is­tra­tion.” The report also calls for busi­ness­es to respect work­ers’ right to union­ize, which would like­ly lead to wage and ben­e­fit gains.

While com­pa­nies often argue that pay­ing high­er wages would make them uncom­pet­i­tive and ulti­mate­ly mean clo­sures or lay­offs, Parisian said the evi­dence indi­cates this is not the case, espe­cial­ly in thriv­ing down­town Chica­go. Even if employ­ers were to pass on the entire­ty of this cost to the con­sumer, it would only raise prices by 2.6%, a neg­li­gi­ble amount that is unlike­ly to affect con­sumer spend­ing pat­terns in any sig­nif­i­cant way,” the report says.

If Chica­go were a coun­try, the report says, its GDP would rank above Bel­gium, Switzer­land and Poland. Restau­rants and retail are among the most lucra­tive sec­tors in Chicago’s econ­o­my, account­ing for $14.2 bil­lion in 2011, with $4 bil­lion of that com­ing from the down­town area that includes the Mag­nif­i­cent Mile.

The busi­ness­es stud­ied for the report include rel­a­tive­ly upscale cloth­ing stores like The Gap, Bebe, Aber­crom­bie & Fitch and Nord­strom; fast food or café chains includ­ing Burg­er King, Pan­era, Cari­bou Cof­fee and Wendy’s; and office, elec­tron­ics or oth­er retail­ers includ­ing Radio Shack, Sta­ples and Tar­get. The report sin­gles out Macy’s depart­ment store, McDonald’s, Chipo­tle Mex­i­can Grill and TJX Com­pa­nies as down­town Chica­go chains with ample prof­its and cash on hand, that employ thou­sands of low-wage workers.

The report says:

McDonald’s has increased prof­its from $4.3 bil­lion in 2008 to $5.5 bil­lion in 2011. TJX, own­er of TJ Maxx and Marshall’s, saw prof­its rise in the same peri­od from $881 mil­lion to $1.5 bil­lion. Chipo­tle prof­its increased over that peri­od from $78 mil­lion to $215 mil­lion. Mean­while, the cost of rais­ing all low wage work­ers in retail and food ser­vice down­town to $15 per hour is $103 mil­lion, a very small per­cent­age of the bil­lions going through the cash reg­is­ters each year.

Chica­go is home to 18 bil­lion­aires and scores of mil­lion­aires, while the per­cent­age of peo­ple in pover­ty has grown each year recent­ly, with almost a quar­ter of Chicagoans liv­ing in pover­ty in 2011. Child pover­ty is even worse — 36 per­cent of Chica­go chil­dren were poor in 2011.

The report notes that 10 per­cent of Chicagoans are employed in retail and restau­rant work, and the jobs tend to be part-time, mean­ing few or no ben­e­fits, lit­tle job secu­ri­ty and high­ly errat­ic sched­ules. Though work­ers will like­ly put in full-time hours at hol­i­days and oth­er peak times, they are usu­al­ly still not eli­gi­ble for full-time benefits.

The growth of low wage jobs in Chica­go mir­rors the nation­al pic­ture since the eco­nom­ic cri­sis and the eco­nom­ic recov­ery” that began in 2009. Nation­wide, the report says, low wage jobs rep­re­sent­ed 21 per­cent of jobs lost dur­ing cri­sis, but 58 per­cent of jobs cre­at­ed dur­ing the recov­ery. That means an over­all shift to low-wage from sol­id mid­dle-class work. In Chica­go, the pro­por­tion of low wage jobs has increased sig­nif­i­cant­ly since 2001, a jump from 23.8 per­cent to 31.2 per­cent of the total workforce.

The study debunks the idea that low-wage restau­rant and retail work­ers are large­ly teens and young peo­ple who will soon tran­si­tion out of those jobs. More than half of the city’s low-wage work­ers are old­er than 30, the report notes, and in gen­er­al the work­ers are old­er and bet­ter edu­cat­ed than in the past. Also a major­i­ty of low-wage work­ers in Chica­go are the sole providers for their fam­i­ly — 57 per­cent, com­pared to 46 per­cent a decade ago. With the state min­i­mum wage at $8.25 an hour, it’s a chill­ing statistic.

Under the Self-Suf­fi­cien­cy Stan­dard, a finan­cial mod­el wide­ly used since its devel­op­ment in the 1990s, a sin­gle par­ent rais­ing a sin­gle child would need to earn at least $17.24 in a full-time job to sur­vive with­out gov­ern­ment assis­tance. The report notes: When the actu­al cost of liv­ing is not cov­ered by wages paid, the employ­er is effec­tive­ly shift­ing the actu­al cost of their prod­ucts and ser­vices to the employ­ee and to the public.”

Low-wage work­ers get stuck in a cycle where they strug­gle just to make ends meet and lack the resources to pur­sue train­ing or edu­ca­tion or move to anoth­er loca­tion in search of bet­ter oppor­tu­ni­ties. And since pover­ty is inex­tri­ca­bly linked with high­er rates of neigh­bor­hood vio­lence, health risks and oth­er debil­i­tat­ing and cost­ly prob­lems, these low-wage work­ers and the gen­er­al pub­lic pay many hid­den costs, includ­ing the tax­pay­er bills for police pro­tec­tion and pub­lic health care.

After the report’s release at a church in down­town Chica­go, Parisian told Work­ing In These Times she is hope­ful that grow­ing aware­ness of inequities will spur change in Chica­go and beyond.

We’re see­ing more and more peo­ple com­fort­able iden­ti­fy­ing on a class basis and talk­ing about these issues, more and more peo­ple are say­ing I’m a mem­ber of the 99 per­cent,’” she said. It’s amaz­ing just in the past year-and-a-half to see what’s hap­pened. There’s been a cli­mate change in the city where groups feel much more able to protest, to do vis­i­ble actions. We have some huge obsta­cles in the cor­po­rate pow­er we face, but we’re also at the point where inequal­i­ty has got­ten so high, peo­ple are fed up. It’s either orga­nize and speak out or see every­thing fall apart.”

Kari Lyder­sen is a Chica­go-based reporter, author and jour­nal­ism instruc­tor, lead­ing the Social Jus­tice & Inves­tiga­tive spe­cial­iza­tion in the grad­u­ate pro­gram at North­west­ern Uni­ver­si­ty. She is the author of May­or 1%: Rahm Emanuel and the Rise of Chicago’s 99%.
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