Facebook is fighting for $15 minimum wage—but is it enough?

#Fightfor15 just hit Facebook.

Mar 1, 2020, 3:46 am*

Internet Culture

 

S.E. Smith

As the #Fightfor15 movement spreads across the Internet, demanding a more reasonable minimum wage for some of America’s most vulnerable workers, Facebook just entered the ring. The firm has joined other tech companies like Microsoft and Apple with a mandate to contractors: Increase wages or stop getting juicy contracts from some of Silicon Valley’s biggest companies.

As influential technology firms enter the discussion about minimum wage in America, it’s possible that their push for corporate social responsibility might shape government policy—but it seems unlikely. 

In a May 12 announcement, COO Sheryl Sandberg informed readers that Facebook’s support staff—like the janitors and food service employees that keep its offices functioning—would be receiving a $15 minimum wage, along with benefits like paid time off. It was a smart move for Facebook’s public image as a firm operating within the heart of an area subject to considerable labor unrest in recent months, including a vote to unionize among the shuttle drivers who ferry tech employees up and down the Peninsula so they can avoid being sullied by public transit.

It’s possible that their push for corporate social responsibility might shape government policy—but it seems unlikely. 

The notion of corporate social responsibility—the idea that corporations should consider their influence on the public good, not just the interests of shareholders—has been getting more popular in recent years, though the motivations for it are murky. Some firms may genuinely believe that they have a duty to the public, taking proactive steps to reform their practices in advance of legislative mandates like cap and trade initiatives. The same firms may believe that it’s important to contribute to their communities and to operate beyond traditional notions of capitalism and profit.

Other companies may view the issue more pragmatically. CSR, as it’s known in corporate shorthand, makes for excellent public relations. Firms known for considering social issues may receive preferential treatment when it comes to permit requirements, contracts, and everything between. They’re also viewed more favorably by the public, creating a stronger brand recognition and a better corporate reputation.

No matter why companies are expressing an interest in social justice, the net effect is the same: They’re starting to pressure each other into behaving more responsibly, and by extension, they’re also leaning on the government. However, the government may not necessarily feel an obligation to respond.

Wages are a growing cause for concern in the United States, thanks to a growing protest movement that started with fast food workers. Americans want better pay, and incremental increases are creeping across individual cities and states.

Wages are a growing cause for concern in the United States, thanks to a growing protest movement that started with fast food workers.

In Facebook’s case, Sandberg’s statement indicates that the firm expects contractors with 25 employees or more who perform “substantial work” for Facebook to pay their staff at least $15 hourly. In addition, contractors need to offer a minimum of 15 days of paid leave a year—another large issue for workers and advocates—and that they provide a payout of $4,000 to parents if they don’t offer formal paid family leave.

Sandberg articulated why improvements to pay and benefits create better conditions for workers and businesses, focusing particularly on women and wages. 

Taking these steps is the right thing to do for our business and our community. Women, because they comprise about two-thirds of minimum wage workers nationally, are particularly affected by wage adjustments. Research also shows that providing adequate benefits contributes to a happier and ultimately more productive workforce.

Her words come across, of course, as a bit hollow, given her recent advertisement for unpaid internships, a controversial practice that hits women seeking entry-level positions particularly hard.

Americans want better pay, and incremental increases are creeping across individual cities and states.

Hari Ravichandran at Entrepreneur agrees with Sandberg’s assertions when it comes to the benefits of better wages. “For our business,” he writes, “higher wages meant better employee retention and increased productivity, which translated into happier customers and healthier profit margins.” Bluntly put: It pays.

At Mashable, Seth Fiegerman also noted that one of the most common arguments against raising pay—that it will hurt the corporate bottom line—doesn’t seem to hold true in this case: “Wall Street appeared to be unfazed by whatever extra costs may come from the change: Facebook stock was up by about 0.5 percent in early trading [on the morning of the announcement].”

Sandberg’s arguments are sound and backed, as she says, by research, but the announcement is also somewhat vague, and spokespeople refuse to discuss how many workers will be affected. It only applies to contractors within the United States, for example, meaning that Facebook offices overseas won’t be applying the same kinds of minimum wage standards to their own contractors. The announcement also doesn’t indicate whether the mandate extends beyond the company’s Menlo Park headquarters, nor does it define what “substantial work” comprises.

Moreover, it doesn’t address the distinction between a minimum wage and a living wage. $15 is a significant target and an easy rallying cry, but that doesn’t mean it’s enough. Fortunately, concrete research on the subject provides a useful benchmark for determining whether a given wage is realistic, and the Massachusetts Institute of Technology maintains a living wage calculator that relies on research from the Economic Policy Institute, among other sources.

According to their estimates, the living wage for a single adult in San Mateo County, where Facebook is headquartered, is $12.83—but that number is likely an understatement, given the housing crisis in the area. For an adult supporting a child, that number jumps to $26.03, and two adults living together need to be making $19.17 each—with no children in the house.

It only applies to contractors within the United States, meaning that Facebook offices overseas won’t be applying the same kinds of minimum wage standards.

Suddenly, a $15 hourly wage seems like a substantial improvement over the state’s existing minimum wage—currently $9, increasing to $10 in 2016—but it’s still not enough. It becomes especially questionable when Facebook is being cagey about who, exactly, will receive the benefit. The company also hasn’t indicated how it intends to enforce the mandate. While it can opt to pull contracts from companies that don’t abide by the requirement, the process could involve lengthy auditing and internal discussions about whether a company performs “substantial work” for Facebook.

At the Verge, Jason Kastrenakes discussed why the move was so important:

Though the new standards don’t cover everyone who does work with Facebook—nor do they match the benefits one would receive while actually working for Facebook—they’re still an important step toward dealing with income inequality issues in the U.S. and Silicon Valley. That large teams right inside of Facebook’s headquarters didn’t previously have these benefits illustrates the problem acutely: contract workers may spend their days right alongside full-time employees while receiving vastly different pay and benefits.

We need more information about the attempt at equalizing the field, though, to determine how meaningful it is. Since cleaning staff, security personnel, food service workers, and others often work for extremely large vendors that provide services to vast numbers of companies across the United States, it’s unclear whether they’d benefit. Aramark, for example, is a major contractor that works throughout the Bay Area, including, likely, at Facebook.

While it definitely has far more than 25 employees, the question of whether it does substantial work is hazy. The company’s hypothetical contracts with Facebook would likely only account for a small percentage of its business—not “substantial work” by percentage of overall contracts, in other words—though the individual employees who did provide services to the company might be considered important support personnel.

White House press secretary Josh Earnest has already praised the company’s move, however, even though the extent of the benefit to employees still isn’t clear. This sets a somewhat dangerous precedent, as it allows companies to make vague announcements that raise their public profiles without having to make substantive changes. 

$15 is a significant target and an easy rallying cry, but that doesn’t mean it’s enough.

If corporations truly want to create movement on the minimum wage, they need more transparency in their processes to show the government and the public that they’re serious about the issue. They also need to be able to illustrate that increasing pay and benefits directly benefits them, as until they do, conservatives will continue to insist that increasing the minimum wage will be the downfall of the American economy. Of course, the opposite is true: A $15 wage for American workers might help save it.

S.E. Smith is a writer, editor, and agitator with numerous publication credits, including the Guardian, AlterNet, and Salon, along with several anthologies. Smith also serves as the Social Justice Editor for xoJane and will be co-chairing Wiscon 40—the preeminent feminist science-fiction conference—in 2016.

Photo via TechCrunch/Flickr (CC BY 2.0)

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*First Published: May 14, 2015, 10:59 am

S.E. Smith

s.e. smith is a Northern California-based journalist and writer focusing on social justice issues. smith's work has appeared in publications like Esquire, the Guardian, Rolling Stone, In These Times, Bitch Magazine, and Pacific Standard.

S.E. Smith