#099 May/Jun 1998

Making Work Pay

Nellie Cunningham works for ARAMARK, a food service provider for one of Baltimore’s public high schools, where she prepares student lunches. She has been working in the food service industry […]

Nellie Cunningham works for ARAMARK, a food service provider for one of Baltimore’s public high schools, where she prepares student lunches. She has been working in the food service industry for 26 years. Georgia Gibson is a Baltimore bus aide and ensures that children are safe as they go back and forth to school. Deborah Phillips is studying Human Services at Baltimore City Community College. She has determined that an education is the best way for her and her daughter to get off welfare. These three women, along with hundreds of others struggling with meager wages and a welfare system that often makes their situations worse, are members of Solidarity Sponsoring Committee (SSC) and are an integral part of creating an economic strategy for the working poor and Baltimore itself.

In Baltimore and many other communities across the U.S., today’s labor market is placing increased economic risk on those who can afford it least: low-wage workers. As the stock market rises and our economy booms, many receive diminished returns for their labor. Job security has plummeted due to downsizing, outsourcing, privatization, and use of part-time, contractual, or “temporary” labor, which also eliminates the cost of health benefits. None of the current labor trends are lost on workers. They know that if they want to keep their jobs, they must work longer hours for less pay and benefits.

To reverse current labor trends that undermine and undervalue workers, SSC began organizing low-wage workers in 1994 and won the first living-wage ordinance in the country. The ordinance, Bill 716, went into effect in July of 1995 and raised the minimum hourly wage for all employees of service contractors for the City of Baltimore to $7.70. Two thousand workers benefit directly from this ordinance, which puts close to $6 million into the pockets of Baltimore’s working poor each year.

The living-wage ordinance has caused ripples across the entire area’s labor market, as the ordinance and the threat of organizing has affected the wages of some low-wage workers not even covered by the ordinance. Employers have raised wages when SSC organizers have begun campaigns at their sites. Last year, Johns Hopkins University gave its temporary workers two 50¢ raises, and other non-living-wage worksites have done the same. In addition, some contractual workers in downtown Baltimore not covered by Bill 716 have received wage increases. Employers do not want to lose their best workers to living-wage jobs and are raising salaries to remain competitive.

The living wage also benefits Baltimore as a whole, since workers reinvest their money in the city where they work and reside. Cunningham, Gibson, and Phillips are not investing in foreign markets or buying homes in the South of France. Instead, all do their grocery shopping in the city, frequent neighborhood retail stores, and are saving to buy homes in Baltimore.

SSC’s effectiveness is partly due to the fact that workers have a powerful organization that stands with them in organizing efforts and political negotiations. SSC was initiated by Baltimoreans United in Leadership Development (BUILD), which has a 20-year history in the city, and is also sponsored by the American Federation of State, County and Municipal Employees (AFSCME). BUILD has earned the attention and respect of politicians, the business community, and Baltimoreans as a result of successful initiatives in housing, after-school programs, and college preparation, among other areas.

Fighting for More Than Wages

Along with a living wage for city contract workers, SSC members identified benefits, the right to organize, and job security as fundamental. Since most contractors do not provide benefits, SSC members have created a mobile $10 per month benefit package for themselves, which covers life insurance, as well as health, dental, and vision care and a prescription plan.

SSC members have won Right to Organize language allowing the city to cancel contracts and bar future contracts with companies that violate the right to organize guaranteed by the National Labor Relations Act. This has given SSC leverage with the contractors and has kept violations of the act to a minimum.

Even with strong Right to Organize language, many workers are afraid to stand up for their labor rights. From the beginning of SSC’s organizing history, members have been threatened by their employers for attending SSC meetings. When Georgia Gibson was threatened by her boss for being involved in SSC, she patiently explained, “I do my job for you well. I come prepared and on time. I always clean the bus at the end of the day. Everything is done perfectly for you. Now what I do on my own time and not yours is my own business. I plan to continue working for you and also do my thing with SSC, on my own time.”

SSC’s support from 45 BUILD clergy and congregations has helped low-wage workers feel they have the power and courage to organize. Gibson said she had never spoken out verbally on anything before she began organizing with SSC. “We have a force that is willing to fight with us,” she said. “We do not stand alone.”

SSC members realized that job security is vital for the individual worker and for its own ability to create a stable organization. Contract workers have no job security. Service contracts usually last one or two years and do not require the contractor to retain existing employees. This June, ARAMARK’s high school food service contract ends, which could mean the end of a job for Nellie Cunningham, who has never missed a day of work and has dedicated herself to providing students with the best food service possible. Workers need to know their paychecks will not suddenly stop, so SSC members fought for the right to keep their jobs, no matter who the contractor is, if they have a good work history.

In response to these concerns, in 1995 SSC members won “right of first refusal,” which establishes that work belongs to the worker and not the low bidder in a new contract cycle. This gives workers the right to keep their jobs no matter who the contractor is. Right of first refusal is also crucial for SSC as an organization. Cunningham has organized her worksite, spoken with Maryland Governor Parris Glendenning on workers’ issues, and played an important role in motivating new members. SSC wants Cunningham to be active in the organization and not slip away as a result of economic upheaval.

Welfare Reform Threatens Gains

In 1996, new welfare reform laws threatened to undo almost everything SSC members had fought for and won. As a result of welfare reform, both low-wage workers and welfare trainees are competing for jobs. While the new laws are creating havoc for workers, for many corporations they are a sweet reward from politicians, ensuring an endless supply of cheap labor.

With Maryland’s new combination of state and federal welfare tax breaks, employers receive an 80 percent return on money they spend on salaries of welfare workers. This means that if a worker makes $5.15 an hour, only around $1.15 an hour comes out of an employer’s budget. The math is simple: why would employers pay $7.70 an hour when they can benefit from subsidized labor and are not penalized for displacing workers?

SSC reasoned that if 2,000 workers making a living wage can affect Baltimore’s economy and increase wages for living-wage and non-living-wage workers alike, then 28,000 welfare trainees entering the labor market highly subsidized could have a disastrous effect on workers’ wages. According to a 1997 report by Maryland’s Department of Human Resources, only 64 new jobs will be created in the job sectors into which the state is moving the 28,000 welfare trainees. One does not have to be an economic genius to figure out that this equation equals job insecurity for all workers.

SSC members also learned first-hand that their jobs were in jeopardy. Living-wage janitorial workers at Baltimore’s Patterson High School were, in fact, replaced by less expensive welfare trainees. Bus aides for City Wide, a bus company in Baltimore, have reported that the company was asking aides to teach welfare trainees to do their jobs. ARAMARK job applicants have reported that during their interview process they were asked if they received welfare benefits, and that those on welfare were given preference over regular workers. According to ARAMARK’s own literature on its welfare initiative, ARAMARK managers are rewarded with travel alarm clocks or state bonds for hiring welfare workers.

ARAMARK, Patterson High School, and City Wide are just three of many employers realizing the financial boon from new welfare laws in the form of cheap labor. Similar situations are playing out in other cities and states. In New York City, Mayor Rudolph Giuliani recently replaced 600 municipal hospital workers with welfare trainees, according to an article in the May 20, 1998 New York Times.

During the most recent session of Maryland’s General Assembly, SSC members went to Annapolis to testify about how the new welfare laws have removed any sense of job security low-wage workers once had. Also addressing the General Assembly’s Finance Committee was a lobbyist for Pizza Hut, which belongs to Maryland’s Welfare to Work group. The group lobbies for tax credits to companies that hire workers leaving welfare. When an Assembly member asked a question about worker displacement, the lobbyist responded: “Of course we’ll replace people. What’s the point of this, if we have to create new jobs?”

Joining Forces for a Common Cause

SSC members were outraged, and they responded by voting to organize with welfare recipients. Deborah Phillips and others who had been through the state-sanctioned welfare training program have joined the anti-displacement campaign. Phillips had participated in three welfare training programs. Each time, she did janitorial work, was paid a weekly stipend of $30, and was never hired as a regular paid employee. Recycling of welfare trainees in this way further threatens job security for welfare trainees and low-wage workers alike. SSC members realized that the campaign’s survival depended on the ability of workers in both categories to organize together toward the goal of secure jobs paying a living wage to all workers.

SSC members did so, and won their first welfare victory in June 1997, when Governor Glendenning signed an executive order making it illegal to replace a regular worker with a welfare worker. This win not only protected workers but also raised people’s awareness of the new welfare laws’ effects on low-wage workers and people on welfare. The victory was also important in stabilizing SSC’s membership base. By working together side by side, welfare trainees and low-wage workers have come to realize their common interests and that organizing together gives each group more power.

After hundreds of one-on-one meetings and dozens of house meetings, SSC put forth a two-point welfare platform, ratified by SSC and BUILD members in fall 1997. The first demand is for the creation of living-wage jobs rather than more meaningless training. The second is to make sure that “school counts” – that women who are both college students and receiving welfare benefits can count their education as valid welfare training.

Deborah Phillips is a leader of the School Counts campaign. Phillips, a student at Baltimore City Community College, had concluded that a college education is the best training to get her off welfare for good. She and other students were outraged that they were being pushed out of school and into state-sanctioned welfare training programs for jobs the governor determines are valid welfare activities, such as learning how to make beds, serve food, and clean schools.

The School Counts campaign was an attractive next step in SSC’s welfare organizing strategy. In 1997 Baltimore City Community College had 865 students who were receiving welfare assistance. (Since then, state sanctioned welfare training programs have drastically reduced this number.) Many strong leaders emerged from this group of individuals, who had already shown initiative and vision in their desire to earn a college degree.

In February 1998, the efforts of SSC resulted in a major change in welfare policy in Baltimore. Governor Glendenning approved a pilot project that will enable up to 500 students to count their education as a state-sanctioned welfare activity. Not only has the School Counts campaign yielded an important victory, but SSC now has a strong coalition of women on welfare dedicated to taking on new issues that affect both low-wage and welfare workers.

SSC members, with support from BUILD and AFSCME, have taken important first steps in their welfare organizing strategy. SSC’s next effort is clear: to convince the state to invest some of its welfare savings to create new living-wage jobs with benefits. If politicians want reform to succeed, there has to be an alternative that makes financial sense. New living-wage work will enable many families to move off welfare, will allow individuals to be hired without displacing someone else, and will encourage the economic growth of cities. Further, SSC argues that it is morally right for workers to receive decent wages, benefits, and job security, in order to make the labor market pay for people like Deborah Phillips, Georgia Gibson, and Nellie Cunningham.

Down From PovertyAcross the country, large corporations are applauded for their virtuous contributions in ending welfare as we know it, and politicians are taking a bow for having drastically reduced welfare rolls. The Governor of Idaho must be particularly proud with a welfare reduction rate of 77 percent, according to the April 16, 1998 New York Times. In Maryland, the reduction rate from January 1995 to March 1998 was 43.5 percent. This means that 99,083 “customers” (adults and children) have left the welfare rolls one way or another, according to the Maryland Department of Human Resources Statistical Reports.

But as more is learned about what is happening to individuals leaving the welfare rolls, it is becoming clear that families moving off of the welfare rolls are not necessarily moving out of poverty. A 1996 U.S. Department of Health and Human Services study found that the average annual salary of those who do leave welfare for work was $8,400. The lowest earning group, 25 percent of the individuals recently off the welfare rolls, were earning an average of $2,400 annually. In addition, during the 32 months of data collection, 25 percent of those who left the rolls did not find any employment.

One Baltimore welfare recipient, a mother of four who has received welfare for 5 years, began to do food service work for ARAMARK at a Baltimore City high school in September 1997 as part of a state-sanctioned welfare training program. This individual is proud to be going to work every day. In January 1998, however, after six months of work, her W-2 tax form reflected earnings of $2,211 for 1997. The federal poverty line for a family of four is $16,400. In addition, unlike welfare, ARAMARK does not provide its food service workers with heath insurance.

Mothers like this one are doing the math and realizing that work is not working to bring them out of poverty. While the new welfare laws’ predecessor, AFDC, had many problems, the new regulations have created a labor system that undermines any job security workers once had, and one in which many are being told to work for poverty wages, or worse, no regular wages at all.




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