(First published in the July 12, 2018 issue of City Pages)
It put a face on wage stagnation. Kim Manteuffel, Isis Hunter and Nathan Brown were among those who walked out in protest.
Former Wendy’s employees Kim Manteuffel, Isis Hunter and Nathan Brown outside of Wendy’s restaurant following their walkout on May 31. None of the seven people who walked out returned to Wendy’s, Manteuffel says and about half have found new jobs since the walkout. (Photo courtesy Kim Manteuffel)
Anyone stopping at the Wendy’s restaurant on May 31 found a locked door and a note reading “Due to this corporations [sic] refusal to pay a living wage and deal with problems before it’s too late, the employees you would have dealt with today have all walked off the job. We wish you all the best. — Wendy’s crew.”
But it wasn’t just that Wendy’s wasn’t paying a living wage; its wages were much lower than many of the comparable businesses in the area. Kimberly Manteuffel, who was the assistant manager at the Wendy’s and was one of the small remaining crew who walked out, performed a wage comparison for her district manager in the months leading up to the walkout. It turned out just about everywhere was paying more than Wendy’s. New employees there were starting at $8 per hour, whereas McDonald’s was starting at $10, and Target at $11, Manteuffel says.
And even so, the pay differential wasn’t the main sticking point itself, Manteuffel explains. The fact that Wendy’s paid so low meant the store couldn’t attract staff. What should have been a 30-employee crew had shrunk down to only seven—six full-time and one part time worker. Everyone was working 65 hours per week to run the restaurant. And no one from Wendy’s corporate offices seemed in a hurry to raise wages, despite the fact that the store was losing employees and unable to attract new ones. City Pages reached out to Wendy’s corporate office and has not heard a response.
The Wendy’s incident occurred in the backdrop of a trend going on in Wisconsin, and across the U.S., for four decades: Wages as a whole have barely moved. In Wisconsin in 1979 it was $17.06, close to 70¢ more than the U.S. median. By 2016, that median wage had only grown to $17.96, which is 16¢ above the national median, according to a report from the Center on Wisconsin Strategy, a UW-Madison think tank.
So in four decades, the median wage has moved less than a dollar. That’s inflation-adjusted, but lags when taking buying power and productivity into account, experts warn.
It’s even harder to wrap one’s head around when one thinks about today’s labor market. Wendy’s is hardly alone among companies having a hard time finding employees. It’s one of the number one complaints amongst today’s employers, and a mission the Wausau Regional Chamber of Commerce has prioritized.
That employees are so hard to find and in such demand even prompted a story from LinkedIn’s editorial team on the phenomena of “recruiter ghosting” — employees have so many options that recruiters will find a promising recruit, make a job offer and then never hear from them again. (The term “ghosting” comes from the relationship world, and refers to a break-up via simply cutting off all communication with no explanation.) Area employers have told City Pages in the past that it’s not uncommon for recruits to just not show up for an interview.
If one looks at the housing market, with more demand than houses available, the laws of supply and demand kick in and house prices go up. But worker wages have remained flat even in these rare times which some economists call “full employment” (though one economist interviewed for this story cautioned against using that term because it’s somewhat of a misnomer).
So the question is, if employers are having a hard time finding workers, why aren’t they raising wages to attract them?
After all, economists and workforce experts say, a community can do all the place-making and quality of life enhancements it wants; companies can add flexibility into the schedule and decent vacations. But at the end of the day, bills need to be paid, and you need money and time to enjoy all that stuff.
Sure, maybe your community is busy making itself the coolest place around where potential employees want to live, but so is just about every other community. Wages matter.
“It’s a balance between how much the job pays and what kind of services and amenities are available in the community,” says MCDEVCO Executive Director Jim Warsaw. “But ultimately when people go to work, they expect to be paid fairly.
If employers want to survive, they’d best figure out those laws of supply and demand, says Central Wisconsin Workforce Development Board Dir. of Business Operations Derek Heikkinen. “Eventually if you don’t make changes and you don’t find people, you don’t have a company,” Heikkinen says.
So what’s up with wages
Forget the notion of truly competitive employment markets, says economist James Segura III. Consolidation has left many industries under the control of a handful of companies.
Why, in a 40-year period with several years of low unemployment, haven’t wages risen anywhere near what simple inflation should predict?
First off, forget the notion of truly competitive employment markets, says Jerome Segura III, UWSP assistant economics professor and former chief economist; that notion doesn’t exist in the U.S. Massive consolidation has left many industries under the control of a handful of companies. That means employees don’t have many options even if they are unhappy or want to leave, Segura says. At least not in their current field.
He points to cable/internet providers as a perfect example. With so many consolidations and mergers of companies over the years, it’s not only consumers but also employees who are left with fewer options in any given market. That lack of competition both artificially drives prices up for consumers, and wages down for employees. That can be seen across many sectors. “Perfect competition doesn’t exist outside of the textbook,” Segura says.
The situation translates into what economists call a monopsony — like a monopoly except instead of indicating a sole seller, it indicates a sole buyer. If all the jobs in a given field or profession have only one or two main employers (often in the guise of multiple companies under one umbrella company) then they become a sole buyer, meaning they can dictate what they pay.
And then it becomes a mindset. Segura says he’s seen local examples in which the low wage mentality is playing out. He talked to employers who can’t, for example, find a welder. When asked what that employer was paying, he was told $15 per hour. When he told the firm there are nearby jobs paying $22 per hour, the employer didn’t seem to care. “When the market wage is $22 (per hour) and you’re paying $15, it’s not a surprise you can’t find workers,” Segura says.
Are local employers just not ponying up the dough? It depends on the industry, Heikkinen says. Information technology and manufacturing have seen wages increase; the hospitality and retail sectors have seen stagnant or even declining wages.
That’s troubling because, according to the Marathon County Life Report, nearly 75% of jobs in the county don’t require more than a high school diploma— most of those are in low-paying hospitality or retail jobs. Those are the employers that will have the hardest times finding employees, Heikkinen says, because in times of low employment lower skilled workers will find employers who will pay more and be more willing to train.
One thing complicating the wage situation: an expanding labor shed. The average commute time has gone up nearly 50%, says North Central Wisconsin Regional Planning Commission Executive Director Dennis Lawrence. That means people are willing to take on longer commutes, which increases the wage competition for any given region. The expansion of the labor shed means a Wausau resident might be more willing today to take a job in, say, Marshfield or Wisconsin Rapids than they were in the past. That significantly broadens the pool of potential employers to choose from.
Couple that with a decreasing population in the Wausau metropolitan area, and the problem gets even worse. The population in the metro has been declining since 2000, according to an economic development study done by the North Central Regional Planning Commission. Over the next ten years, the study says, the working age population will decrease from 58% to 53%. Fewer people, who are also willing to travel farther, will only increase competition for workers. But more than 22,000 job openings are expected in Marathon County in the next ten years, according to the Bureau of Labor Statistics.
That means employers will have to increase wages at some point, Heikkinen says. Calculations done by his office show that, in our area, a single person would need to earn $12.85 to meet the minimum basic needs for living, without qualifying for government assistance programs. Should that be the new minimum?
At some point, it will be, Heikkinen says; not because it will be imposed through regulation, but because workers with more choices than ever for places to work will demand at least that much. His advice to businesses who are struggling to find employees to start there, and make sure they’re paying at least that much. “People need to pay their bills,” Heikkinen says.
That predicament isn’t lost on Mark Maloney. The branch manager for Russ Davis Wholesale in Merrill says for the first time ever his branch is planning to offer a sign-on bonus to attract truck drivers: $10,000 delved out in increments depending on how long they stay. To earn the full $10,000 bonus, the five drivers the wholesaler plans to hire need to stay through the end of the year.
Maloney (who’s also a Village of Weston board member) says though it’s the first time the branch has had to offer a sign-on bonus to attract truck drivers, the company has always tried to pay above market wages to attract the best workers. That sometimes drew criticism from other Merrill business owners who insisted he lower his pay for truck unloaders (Maloney didn’t want to name which business owners made that demand). He’d been paying between $9-10 and now pays close to $12.
“I was invited to a lunch and told I need to drop the pay to $8 per hour,” Maloney says. “I wouldn’t do it. In fact, I went a dollar an hour higher later. I wanted the best [workers], not just average.”
Why not quit?
One of the questions many would ask the Wendy’s group is, well, if other area employers are paying more, why not just go there?
Ultimately that is what happened. About half of the employees of the walkout have now found other employment, Manteuffel says.
But at the time, the few employees left at the restaurant felt like a family, Manteuffel says. Out of the seven employees left in the store, six were working full time. When one of the employees was being evicted and didn’t have money for the security deposit on a new place, the store manager handed him $300 to cover it, Manteuffel says. “We were all a family, we were so close,” Manteuffel says. “Our general manager was the best boss I ever worked for.”
And there was the knowledge that if one of them left, the absence would make jobs much harder for everyone who remained, since it didn’t seem likely anyone new would be hired. “Knowing we all had each other helped make it tolerable,” Manteuffel says.
Manteuffel says that in addition to the deteriorating employment situation, the building had problems that were going unaddressed, such as a leaking roof. They’ve since filed a report with the Occupational Safety and Health Administration, Manteuffel says.
Wendy’s offered the group a $1 per hour raise and offered to add $1 to the starting wage of new workers, Manteuffel says, but communication went silent when the group requested that in writing.
Now, three of the seven have found new jobs in the area, and another person ultimately moved out of the area. Both Noodles and Co. and Arby’s reached out to the group about employment after learning of the walkout, Manteuffel says.
And a recent employment ad for Wendy’s is touting an hourly pay at $9 to $12—more in line with the wage range Manteuffel had showed managers in the first place.
This story has been updated to correct Segura’s first name and title.