As Mayors Gather in Washington D.C. for Winter Meeting; New Report Hits Sodexo for Contributing to Poverty in Our Nation's Cities

Jan 20, 2010, 13:21 ET from Service Employees International Union

WASHINGTON, Jan. 20 /PRNewswire-USNewswire/ -- An analysis by the Service Employees International Union (SEIU) found that Sodexo — who sponsored a report in November that showcased programs to end poverty in 24 U.S. cities — contributes to the nation's poverty crisis by frequently failing to provide livable-wage jobs. Many Sodexo workers earn as little as $8.27 an hour and do not have access to affordable, quality healthcare through their employer.

"It's one thing to study how to end poverty; it's another to do something about it," Boston Mayor Thomas Menino said.  "Our cities need sustainable jobs - that is jobs that allow families some measure of economic security, jobs that lift them out of poverty not drive them deeper into it.  As a major employer in cities across the country, Sodexo should rise to this challenge."

Two Sodexo food service workers, Liege Moses from New York and Keisha Carter from Illinois, attended the U.S. Conference of Mayors today to ask other mayors to talk to mayors about the report.

"The report issued today underscores how vital it is for companies interested in lessening poverty to provide jobs with a livable wage," said Service Employees International Executive Vice President Mitch Ackerman. "Companies like Sodexo talk about ending poverty on one hand while encouraging poverty on the other."

According to SEIU's analysis, many Sodexo employees who work full time still qualify for many of the federal anti-hunger and rent-subsidy programs. Many Sodexo employees in the United States are paid so little they qualify for the three largest and most important federal anti-hunger programs — the Supplemental Nutrition Assistance Program (SNAP — what used to be known as food stamps); the Special Supplemental Nutrition Program for Women, Infants, and Children (commonly called WIC); and the National School Lunch Program.

"I work 26.25 hours a week, at $8 an hour. Sodexo pays health insurance for employees that work 30 hours a week. So I'm kind of stuck in a hard place right now," said Delores Jacob, a food service worker at the Lumberton District Elementary School in New Jersey. "Because I'm 63, I won't be eligible for Medicare until I'm 65, and right now I'm without health insurance. And the medication that I take is $600 for just three months." 

  • Sodexo employees who work full time year-round making $8.27 per hour, earn just $17,202 per year, far below the poverty line. Even an employee who earns $10.54 an hour fails to climb above the poverty line for a family of four, making just $21,923 per year, according to the U.S. Department of Health and Human Services 2009 poverty guidelines, which are used as the basis for determining eligibility for many public anti-poverty programs.
  • While Sodexo helps deliver meals to low-income children through the National School Lunch Program, the children of many of its employees are eligible to receive free and/or reduced price meals through the program because Sodexo fails to pay their parents adequate wages.
  • Sodexo employees working year-round making $8.27 per hour would have to work 86 hours a week — more than two full-time jobs — just to afford an apartment. A Sodexo worker making $10.54 per hour would still have to work 68 hours per week to afford that apartment, according to the National Low Income Housing Coalition (NLIHC) "housing wage." NLIHC defines the housing wage as "the amount of money a household must earn in order to afford a rental unit at a range of sizes (0, 1, 2, 3 and 4 bedrooms) at the area's Fair Market Rent (FMR), based on the generally accepted affordability standard of paying no more than 30 percent of income for housing costs."
  • Many Sodexo employees work closer to 38 weeks per year because of unpaid summer and holiday breaks, which also have a tremendous impact on income. Workers making $8.27 per hour have an annual income closer to $12,500 per year if they don't work summers and holidays. Annual earnings aren't much better for a worker making $10.54 per hour: just over $16,000 per year.
  • The HMOs that Sodexo offers in many individual markets generally have an employee cost of just over $120 per pay period for family coverage. A full-time, seasonal worker, who earns $8.27 per hour must spend more than a quarter of his or her annual income on healthcare, leaving little for other basic necessities. Even for somewhat higher-paid, year-round workers making $10.54 an hour (who still earn just below the poverty line for a family of four), paying the employee premium would eat up 15 percent of their annual income.

You can access a fully copy of the report here:

With 2.2 million members in Canada, the United States and Puerto Rico, SEIU is the fastest-growing union in the Americas. Focused on uniting workers in healthcare, public services and property services, SEIU members are winning better wages, healthcare and more secure jobs for our communities, while uniting their strength with their counterparts around the world to help ensure that workers — not just corporations and CEOs — benefit from today's global economy.

SOURCE Service Employees International Union