Hourly workers still have leverage as US hiring booms

New York — (AP) — Chelsie Church was working as a manager at a Colorado Taco Bell when she found out workers at a nearby Pizza Hut were earning more than $1 an hour more than she was.

Her attempts to negotiate a raise were unsuccessful, so she kept hunting for another job, eventually finding one at Laredo’s Tacos, a chain connected to 7-Eleven.

“Even my Taco Bell manager said, ’If they’re gonna offer you $20 an hour — take it,’” Church said.

As inflation skyrockets, hourly workers like Church have been seeking different positions with better pay.

More than 4 million Americans have quit their jobs every month since June 2021, a level never seen before last year. A Pew Research survey found that about one in five U.S. workers say they are very or somewhat likely to look for a new job in the next six months.

For many workers on the low end of the pay scale, though, inflation has already eaten into or erased any real wage gains, said Brad Hershbein, senior economist at the Upjohn Institute for Employment Research.

In July, hourly earnings rose 0.5%, an increase of 5.2% over the past year — still not enough to keep up with inflation. And sometimes switching jobs may mean earning more while giving up benefits like health insurance or schedule consistency.

Still, hiring is booming — U.S. employers added more than half a million jobs in July, according to the monthly jobs report released Friday — and unemployment remains near a 50-year low, meaning job-switching will likely remain an option at least for the near future.

“One major source of worker power is the implicit threat that you’ll quit your job and take another,” said Heidi Shierholz, president of the liberal Economic Policy Institute. “When there’s a huge number of job openings at one time, that implicit threat is real.”

That could change if hiring slows and the U.S. economy continues to weaken. But for the moment, “The momentum is still with the worker,” said Hershbein. “We’re not where we were six to 12 months ago — but the labor market remains strong.”

Labor economist Kathryn Edwards, with the Rand Corporation, says that while hourly pay increases may be attainable right now through job-switching, other benefits — such as regular hours, sick days, and health insurance — are often not even on the table.

That’s why Ethan Ramsey, 21, continues working at the Publix supermarket in Miami, Florida, where he started in 2020.

Ramsay has seen more turnover and churn in recent months, he said, as the supermarket no longer pays as much as other hourly employers in the area. But he takes into account the Publix benefits, such as vision and dental coverage, as well as rarities like a 401 (k) contribution and a percentage of salary in company stock.

“As good as those are, you still want to be paid what your time is worth,” he said. Inflation has exacerbated the pressure.

“Every single customer that comes in — no exaggeration — everyone that’s an adult, that’s not a kid — complains that everything is more expensive at the register,” he said. To supplement his paycheck, Ramsay often picks up shifts from on-demand driving apps and works as a snow-cone delivery driver, he said.

Workers considering switching for higher wages should also take into account the possibility of “labor hoarding,” where an employer will hire new employees to have on hand, but with no guarantee of regular hours, Edwards said. In these cases, the overall return to a worker changing jobs may be lower.

“Employers bait and switch all the time,” she said.

Some workers would rather stay where they are and push for higher wages. In response to widespread instability in workplace conditions, there has been a marked increase in worker organizing in recent months, Edwards and Shierholz noted.

Union drives are up 58% over the same period last year, according to the National Labor Relations Board, and workers filed nearly 2,000 petitions for representation in the first three quarters of the 2022 fiscal year. High-profile campaigns at Amazon and more than 200 Starbucks locations have made headlines.

Maeg Yosef, 41, who has worked as a crew member at Trader Joe’s in Hadley, Mass., for 18 years, said that working through the pandemic led to her and her coworkers discussing workplace safety and other conditions more often, including pay and benefits, which led to a successful union drive this month.

Days before that vote, the company announced raises for certain brackets of workers, an increase Yosef attributes to the pressure of the campaign.

“We were well aware our wages have not kept up with inflation,” she said. “And we had tried to voice concerns in the past, through surveys and other channels. The company wasn’t listening.”

Trader Joe’s workers in Minneapolis, Minn. and Boulder, Colo., have also filed for union elections, with the Minneapolis location slated to hold its vote next week.

“Among workers — and particularly low wage workers — there’s been a reigniting of the understanding that employers are seeing record profits while wages haven’t kept up,” Shierholz said. “I don’t think that will fade away as quickly. Some of what low-wage workers have gained in terms of bargaining power is not going away.”

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The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.

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