For most employees, payday is a cause for celebration and an acknowledgement of a job well done. But for workers like Natalie Gunshannon, it can be a frustrating reminder of a flawed system that effectively pays them less than our already too-low federal minimum wage does. Especially for women, who are affected more than men by low minimum wage, the implications of our current wage laws are staggering.
Gunshannon’s former employer, a McDonald’s Corporation franchise in Shavertown, Pennsylvania, pays its hourly employees using a “payroll card,” a debit card-like financial product offered by a number of major banks. At the Shavertown McDonald’s, employees do not have the option to receive payment through paper check or direct deposit, a violation of the Pennsylvania Wage Payment and Collection Act. This may seem like a relatively minor distinction, but for the employees who cannot transfer their pay into their own bank accounts and who have to pay exorbitant ATM withdrawal fees, transaction fees, and even inactivity fees on their hard-earned money, the costs associated with the payroll card can eat away at paychecks to the point where employees are being paid less than minimum wage.
Representing Gunshannon and other employees in a class-action suit, attorney Mike Cefalo said that “the debit card is a drain on the pay they earn.”
And the pay they earn is already much too low. According to the Economic Policy Institute, women make up 56 percent of minimum wage workers — but even when those women work full time, their income remains below the federal poverty line. Last summer, AAUW joined with 40 other organizations to urge members of Congress to raise the federal minimum wage to a fair, livable standard. To that end, AAUW has endorsed the Fair Minimum Wage Act of 2013. This bill would increase the minimum wage incrementally over the next three years from the current $7.25 per hour to $10.10 per hour.
For women, families, and the U.S. economy, the benefits of raising the minimum wage are real. The Fair Minimum Wage Act would increase incomes for about 30 million workers, 16.8 million of them women. The Fair Minimum Wage Act is also good news for the economy — with higher wages, gross domestic product is expected to grow by about $32.6 billion by July 2015, which will bring even more women and families out of poverty.
“I need to receive all the money I earn,” Natalie Gunshannon told reporters after filing suit against her former employer. “I can’t afford to lose even a few dollars per paycheck. I just think people should be paid fairly and not have to pay fees to get their wages.”
AAUW believes that everyone deserves fair pay, and we hope that the Fair Minimum Wage Act will pass and bring us one step closer to an equitable system. Stand with us and ask your representatives in Congress to support the Fair Minimum Wage Act.
This post was written by AAUW Public Policy Intern Cate Domino.