Service Workers at America’s Biggest Companies Still Don’t Make $15 an Hour
A new study finds that majorities of service workers at some of the United States’ biggest name-brand companies — including Dunkin’, Burger King, and Dollar General — are still paid less than $15 an hour, even as CEO pay skyrockets.
As Kim Kardashian put it recently, “It seems like nobody wants to work these days.” It’s a lament that has hardened into a refrain among employers in the United States. But how much are they paying?
Not much, according to a new company wage tracker created by the Economic Policy Institute and the Shift Project, a joint project by the Harvard Kennedy School and the University of California, San Francisco, using survey data collected from Facebook and Instagram users in 2021, with responses from over twenty thousand workers at sixty-six large service-sector firms and an average of 317 respondents per firm. The tracker finds that at many hugely profitable companies, the majority of workers are paid less than $15 an hour.
In the food-service sector, starvation wages remain the norm. Chipotle pays 54 percent of workers less than $15 an hour, even as the company paid CEO Brian Niccol $38 million in 2020. Things are even worse at Dunkin’ (68 percent of workers are paid less than $15 an hour), Burger King (83 percent of workers are paid less than $15 an hour), and McDonald’s (89 percent of workers are paid less than $15 an hour).
A look at companies where workers have recently begun organizing is enlightening. Starbucks pays 63 percent of workers less than $15 an hour, with 27 percent of workers paid less than $12 an hour. Dollar General, which shut down one store after workers voted to unionize in 2020 and narrowly defeated a union drive at another location last year, pays 92 percent of workers less than $15 an hour, with 22 percent of workers paid less than $10 an hour — no wonder videos by unhappy Dollar General employees are taking off on social media. Walmart, a thus far impenetrable target of the labor movement, pays 51 percent of workers less than $15 an hour.
This is in a country where the living wage in 2019 was $16.54 for a family of four with two working adults, and the $7.25-an-hour federal minimum wage has not budged since 2009. Had the minimum kept up with productivity growth, it would have been $23 an hour in 2021, the year the company wage tracker data was collected. As the National Low Income Housing Coalition found in a 2021 report, a worker would have to make $20.40 to afford to rent the average one-bedroom apartment in the United States. The average minimum-wage worker would need to work seventy-nine hours a week — i.e., two full-time jobs — to afford that rent.
Other companies included in the tracker’s data that pay the majority of workers less than $15 an hour include Chick-fil-A, Domino’s, IHOP, GameStop, Jimmy John’s, Best Western, Bath & Body Works, Cracker Barrel, Gap, Food Lion, Kohl’s, Hannaford, Lowe’s, Marriott, Marshalls, Michaels, Panera Bread, Papa John’s, Publix, Rite Aid, Speedway, Stop & Shop, Subway, Tractor Supply Company, Victoria’s Secret, Waffle House, Walgreens, and Wyndham Hotels & Resorts.
Among the study’s respondents, those in the hospitality sector received the lowest pay, with 73 percent of workers paid less than $15 an hour, while those in the delivery sector were the highest paid, with 8 percent of such workers making less than $15 an hour. No Amazon workers reported pay of less than $15 an hour — Amazon’s average starting wage was $18 an hour in 2021, higher than average wages in the service sector but still well below the average in the warehousing industry, and the company’s entry into a county has been shown to drive down wages in nearby warehouses. The union difference is clear in the wage tracker data, too: 63 percent of respondents who work for UPS said they are paid at least $20 an hour.
Such are the conditions on the ground, no matter the chatter produced by those removed from the low-wage economy, be they employers or commentators: the majority of workers included in the data are paid less than $20 an hour. As another recent Economic Policy Institute report finds, this is as CEO pay skyrockets, with CEOs in the United States paid 351 times as much as the typical worker in 2020.