Most workers at large retail and food firms get less than $15 an hour – study

Some of the largest, most profitable companies in retail and food services are still paying most of their workers less than $15 an hour, and many still make less than $10 an hour, according to a new company wage tracker developed by the Economic Policy Institute and the Shift Project.

The tracker, which covers 66 large retail and food service corporations, found:

• Dollar General pays 92% of workers less than $15 an hour and 22% are paid less than $10 an hour.

• McDonald’s pays 89% of its workers less than $15 an hour and 23% are paid less than $10 an hour.

• Wendy’s pays 87% of workers less than $15 an hour and 17% are paid less than $10 an hour.

• At Sonic, 85% of workers are paid less than $15 an hour and 22% less than $10 an hour.

Similarly high percentages were found at Arby’s, Burger King, Taco Bell and Pizza Hut.

The report was released as many of these firms have complained about being unable to find staff. Some fast-food firms, such as In and Out Burger, pay much more, with the majority of their workers paid at least $16 an hour and just 9% below $15 an hour.

Bill Thompson of Independence, Missouri, has worked at Burger King for 10 years, but makes just $11.15 an hour and has received wage increases only from state minimum wage increases.

“I work 40 hours or more a week, 10 hours a day, no breaks,” said Thompson, who has been involved in organizing with the Fight for $15 and a union movement. “The toll on my health has been significant. I can’t afford to see a doctor and when I have a health condition, I have to rely on emergency room services. Many days, I just work through it because there is no paid sick leave and I work paycheck to paycheck.”

In 2021, Thompson had to take six weeks off, all unpaid, while his mother was dying of cancer in hospice care at home. He had to rely on local food pantries to keep food in her house through her final days.

“This is America, but no one should live like this,” Thompson said.

More than half of workers at Dunkin’ Donuts, Starbucks, Chick-Fil-A, Domino’s, IHop, GameStop, Chipotle, Jimmy John’s, Best Western, Bath & Body Works, Cracker Barrel, Gap, Food Lion, Kohl’s, Hannaford, Lowe’s, Marriott, Marshalls, Meijer, Michaels, Panera Bread, Papa John’s, Publix, Rite Aid, Ross, Speedway, Stop & Shop, Subway, Tractor Supply Co, Victoria’s Secret, Waffle House, Walgreens, Walmart and Wyndham Hotels & Resorts are paid less than $15 an hour.

The majority of workers at all 66 firms included in the project are paid $20 an hour or less, representing at least 10.7 million workers. The federal minimum wage in the US has remained $7.25 an hour since 2009, while a living wage in the US as calculated by MIT was set at $16.54 an hour for a family of four with two working adults in 2019. According to a 2021 report by the National Low Income Housing Coalition, a worker needs to make at least $20.40 an hour to afford the rent of the average one-bedroom apartment in the US.

Daniel Schneider, co-director of the Shift Project, a joint project at Harvard Kennedy School and University of California, San Francisco, who co-developed the wage tracker, explained the tracker was created to help fill a data hole in not just the average wages at top retail and food service firms, but insight into the distribution of those wages.

“None of these firms are transparent when it comes to wages, which is why we found the need to put this data out there. It’s very hard to find any public information from firms about how much they pay their workers, let alone on the distributions of those wages,” said Schneider.

He also noted that in addition to the low wages many of these firms pay, the job quality is poor in terms of the lack of benefits, paid time off, erratic scheduling and insufficient hours.

“That’s not just low pay, it’s a recipe for material hardship. That’s an economic context that can lead workers to not being able to afford enough to eat or keep up with utility bills,” he said. “There’s a long way to go for most of the employers on this list when it comes to job quality. But the data really shows that there is a higher road strategy available to employers, if they’re willing to take it.”

These corporations generate billions of dollars in revenue annually and pay CEOs and executives multimillion-dollar salaries every year. Todd Vasos, CEO of Dollar General, received compensation worth $16.4m in 2021 and McDonald’s CEO, Christopher Kempczinski, received compensation worth $20m.

The data on wages were compiled from more than 20,000 workers at the 66 corporations included in the tracker, with an average of 317 respondents for each company, with interviews conducted between March 2021 and November 2021.