Budget deal expected this week amounts to a cease-fire as sides move to avert a standoff

Jim Watson/AFP/Getty Images - Lawmakers are due back in Washington on Tuesday. With a budget deal expected this week, congressional leaders hope to finish work quickly and leave town for the holidays as soon as Friday.

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By Lori Montgomery, Published: December 8 

House and Senate negotiators were putting the finishing touches Sunday on what would be the first successful budget accord since 2011, when the battle over a soaring national debtfirst paralyzed Washington.

The deal expected to be sealed this week on Capitol Hill would not significantly reduce the debt, now $17.3 trillion and rising. It would not close corporate tax loopholes or reform expensive health-care and retirement programs. It would not even fully replace sharp spending cuts known as the sequester, the negotiators’ primary target.

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After more than two years of constant crisis, the emerging agreement amounts to little more than a cease-fire. Republicans and Democrats are abandoning their debt-reduction goals, laying down arms and, for the moment, trying to avoid another economy-damaging standoff.

The campaign to control the debt is ending “with a whimper, not a bang,” said Robert Bixby, executive director of the bipartisan Concord Coalition, which advocates debt reduction. “That this can be declared a victory is an indicator of how low the process has sunk. They haven’t really done anything except avoid another crisis.”

Details of the agreement remained murky Sunday as aides to the principal negotiators,House Budget Committee Chairman Paul Ryan (R-Wis.) and Senate Budget Committee Chairman Patty Murray (D-Wash.), continued to work behind closed doors. Ryan and Murray chair a 29-member conference committee tasked with approving a plan to fund federal agencies through fiscal 2014, which began Oct. 1, and avoid another government shutdown when a temporary funding measure expires in January.

With lawmakers due back in town Tuesday, aides said Ryan and Murray are likely to bypass the committee and take the deal, if finalized, straight to the full House and Senate. Congressional leaders hope to finish work quickly and leave town for the holidays as soon as Friday.

Senior aides familiar with the talks say the emerging agreement aims to partially repeal the sequester and raise agency spending to roughly $1.015 trillion in fiscal 2014 and 2015. That would bring agency budgets up to the target already in place for fiscal 2016. To cover the cost, Ryan and Murray are haggling over roughly $65 billion in alternative policies, including cuts to federal worker pensions and higher security fees for the nation’s airline passengers.

Republican leaders are also seeking additional savings to knock a small dent in deficits projected to exceed $6 trillion over the next decade. But the deal would do nothing to trim the debt, which is now larger, as a percentage of the economy, than at any point in U.S. history except during World War II.

In that sense, the talks have followed the game plan Ryan sketched in October after Republicans agreed to reopen the government following a 16-day shutdown. Despite his own ambitious blueprint for shrinking spending, Ryan said he would not attempt a big deal, because it would require a “grand bargain” in which Democrats agree to cut safety-net spending in exchange for Republican concessions on taxes.

A grand bargain has been the holy grail in half a dozen rounds of negotiations, includingtalks between President Obama and House Speaker John A. Boehner (R-Ohio) in summer 2011.

“I saw those earlier episodes, these grand-bargain pursuits, as ultimately destined for failure because it required one of the parties in power to compromise core principles, and I just didn’t see that happening,” Ryan said in October. “That’s why it’s more appropriate to the moment we have to focus on common ground . . . to get some minimal accomplishments.”

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In essence, Ryan was saying, “ ‘If we agree not to do anything, we can get something done.’ And he was right,” Bixby said. “There’s no budgetary or fiscal strategy in the choices they’ve used, except the strategy of avoiding any hard choices.”

Budget analysts say it is difficult to work up much enthusiasm for any of the small-bore moves under discussion.

Take pensions for federal workers. In his most recent budget blueprint, Ryan called for federal workers to pay an additional 5.5 percent toward their retirement, saving taxpayers $130 billion over 10 years. Even Obama proposed a 1.2 percent increase aimed at saving $20 billion.

But aides said Ryan and Murray were headed toward a smaller number — less than $17 billion. Republicans will need a substantial number of Democratic votes to push a deal through the House, and Washington area lawmakers — including House Minority Whip Steny H. Hoyer, House budget negotiator Chris Van Hollen and Senate Appropriations Committee Chairman Barbara A. Mikulski, all Maryland Democrats with large constituencies of federal workers — are having an outsize influence.

Meanwhile, Ryan and Murray were looking to squeeze billions more from the sale of broadcast spectrum. But analysts are already worried that an auction set for early next year could fall tens of billions of dollars short of revenue targets because smaller networks are lobbying to limit participation by wireless giants AT&T and Verizon.

A Senate hearing on the matter is set for Tuesday. Whatever the underlying math, revenue from spectrum sales may be “an easy thing to throw into a budget negotiation,” said Urban Institute budget expert Gene Steuerle. “But it seems like a gimmick.”

Even this modest package faces political hurdles. Democrats began pressing last week for a $25 billion extension of emergency benefits for the long-term unemployed that are set to expire at the end of the month, cutting off 1.3 million people. The last-minute demand frustrated Republicans, who note that the jobless rate fell to 7 percent in November, the lowest level in five years.

On Sunday, however, Sen. Richard J. Durbin (Ill.), the No. 2 Democrat in the Senate, said Democrats are not drawing a line in the sand.

“I don’t think we’ve reached that point where we’ve said this is it, take it or leave it,” Durbin said on ABC’s “This Week.” “What I hear from Patty Murray,” he added, is that “negotiations are making progress, moving in the right direction.”

More worrisome to many observers is the prospect that Republican leaders may prove unable to rally support for the agreement. Boehner has a long history of overestimating his ability to deliver Republican votes. And Senate Minority Leader Mitch McConnell (R-Ky.)has been notably unenthusiastic about repealing the sequester, which he has characterized as the most important prize of the GOP crusade to reduce government spending.

On the other hand, Republicans have also been unable to pass spending bills that include the sequester cuts. With an additional $20 billion reduction set to hit the Pentagon in January, many GOP lawmakers now agree with Democrats that the sequester should go.

“I don’t even want to think about” what would happen if Ryan and Murray fail to prevent the next defense cut, said House Armed Services Committee Chairman Howard P. “Buck” McKeon (R-Calif.). “I just hope they get a deal.”

If negotiators navigate the land mines and push an agreement through Congress, there will be one more cloud on the horizon — the Treasury Department will need another increase in the debt limit, perhaps as soon as late February. Congress agreed in October to suspend enforcement of the debt limit until Feb. 7.

Ryan has raised the idea of using the debt limit to demand progress on an overhaul of the tax code. But GOP leaders have shown little interest. Analysts in Washington and on Wall Street are betting that, after showdowns over the debt limit in 2011 and this fall drove GOP approval ratings to record lows, Republicans lack the appetite to do it again.

Where would that leave the nation’s financial outlook? Not in a particularly good place, budget analysts say. The most recent Congressional Budget Office projections show the red ink receding over the next two years. But annual deficits would start growing again in 2016 as the baby-boom generation moves inexorably into retirement. And the debt would again soar.

“With this little package, we’re not going to climb out of the hole we’ve dug,” said the Urban Institute’s Steuerle. “All we’re doing is agreeing to stop throwing shovels at each other.”

The Switchboard: Wait, there are federal agencies still using floppy disks?

• BY ANDREA PETERSON

• December 9 at 8:45 am

This undated U.S. government photo shows an aerial view of the National Security Agency (NSA) in Fort Meade, Md. The Obama administration is defending the National Security Agency's need to collect telephone records of U.S. citizens, calling such information "a critical tool in protecting the nation from terrorist threats." (AP Photo/U.S. Government)

Tech giants issue call for limits on government surveillance of users. "Eight prominent technology companies, bruised by revelations of government spying on their customers’ data and scrambling to repair the damage to their reputations, are mounting a public campaign to urge President Obama and Congress to set new limits on government surveillance," report Edward Wyatt and Claire Cain Miller at the New York Times. Led by Google and Microsoft, the Reform Government Surveillance coalition is launching today with a Web site and full page advertisements in national newspapers.

Agencies collected data on Americans’ cellphone use in thousands of "tower dumps."  "Federal, state and local law enforcement agencies conducting criminal investigations collected data on cellphone activity thousands of times last year," writes Ellen Nakashima at the Washington Post, "with each request to a phone company yielding hundreds or thousands of phone numbers of innocent Americans along with those of potential suspects." A congressional inquiry led by Sen. Edward J. Markey (D-Mass.) has revealed that law enforcement made more than 9,000 requests for tower dumps, a bulk collection method in which information on all calls bounced off a cellphone tower during a period of time, last year.

Slowly they modernize: A federal agency that still uses floppy disks."Every day, The Federal Register, the daily journal of the United States government, publishes on its website and in a thick booklet around 100 executive orders, proclamations, proposed rule changes and other government notices that federal agencies are mandated to submit for public inspection," writes Jada F Smith at the New York Times. But some of it is still delivered via floppy disks, which some of you may remember as "the 3.5-inch plastic storage squares that have become all but obsolete in the United States."

Spies’ dragnet reaches a playing field of elves and trolls. "American and British spies have infiltrated the fantasy worlds of World of Warcraft and Second Life, conducting surveillance and scooping up data in the online games played by millions of people across the globe, according to newly disclosed classified documents," report Mark Mazzetti and Justin Elliot at the New York Times. "Fearing that terrorist or criminal networks could use the games to communicate secretly, move money or plot attacks, the documents show, intelligence operatives have entered terrain populated by digital avatars that include elves, gnomes and supermodels."

This silly joke about wine actually explains a lot about the wireless industry. The Switch's Brian Fung uses a joke by Federal Communications Commission Chair Tom Wheeler to explain the upcoming spectrum launch. Once you read the story, you'll understand this (pretty bad) joke: "As you've noticed, we've got a good supply of wine here tonight. But it's a limited supply. So, AT&T and Verizon? I'm going to have to ask you to limit. And T-Mobile and Sprint? Go ahead, guys! [Laughter.] But listen. T-Mobile and Sprint — would you show up and buy something?"

Twitter, Facebook and more demand sweeping changes to US surveillance laws

AOL, Twitter, Yahoo, Microsoft, Facebook, Google, Apple and LinkedIn to call for reforms to restore the public's trust in the internet

• Dan Roberts in Washington and Jemima Kiss in London
• theguardian.com, Monday 9 December 2013 09.52 EST
• Jump to comments (859)

AOL, Twitter, Yahoo, Microsoft, Facebook, Google, Apple and LinkedIn say: 'The balance in many countries has tipped too far in favour of the state and away from the rights of the individual'

The world's leading technology companies have united to demand sweeping changes to US surveillance laws, urging an international ban on bulk collection of data to help preserve the public's “trust in the internet”.

In their most concerted response yet to disclosures by the National Security Agency whistleblower Edward Snowden, Apple, Google, Microsoft, Facebook, Yahoo, LinkedIn, Twitter and AOL have published an open letter to Barack Obama and Congress on Monday, throwing their weight behind radical reforms already proposed by Washington politicians.

“The balance in many countries has tipped too far in favour of the state and away from the rights of the individual – rights that are enshrined in our constitution,” urges the letter signed by the eight US-based internet giants. “This undermines the freedoms we all cherish. It’s time for change.”

Several of the companies claim the revelations have shaken public faith in the internet and blamed spy agencies for the resulting threat to their business interests. “People won’t use technology they don’t trust,” said Brad Smith, Microsoft's general counsel. “Governments have put this trust at risk, and governments need to help restore it.”

The chief executive of Yahoo, Marissa Mayer, said: “Recent revelations about government surveillance activities have shaken the trust of our users, and it is time for the United States government to act to restore the confidence of citizens around the world."

Silicon Valley was initially sceptical of some allegations about NSA practices made by Snowden but as more documentary evidence hasemerged in the Guardian and other newspapers detailing the extent of western surveillance capabilities, its eight leading players – collectively valued at $1.4tn – have been stung into action amid fears of commercial damage.

“We understand that governments have a duty to protect their citizens,” they say in the letter. “But this summer’s revelations highlighted the urgent need to reform government surveillance practices worldwide.”

A separate list of five “reform principles” signed by the normally fiercely competitive group echoes measures to rein in the NSA contained in bipartisan legislation proposed by the Democratic chair of the Senate judiciary committee, Patrick Leahy, and the Republican author of the Patriot Act, Representative Jim Sensenbrenner.

Crucially, Silicon Valley and these key reformers in Congress now agree the NSA should no longer be allowed to indiscriminately gather vast quantities of data from individuals it does not have cause to suspect of terrorism in order to detect patterns or in case it is needed in future.

“Governments should limit surveillance to specific, known users for lawful purposes, and should not undertake bulk data collection of internet communications,” says the companies' new list of principles.

They also argue that requests for companies to hand over individual data should be limited by new rules that balance the “need for the data in limited circumstances, users’ reasonable privacy interests, and the impact on trust in the internet”.

This places them in direct conflict with Dianne Feinstein, the Democratic chair of the Senate Intelligence Committee, who is sponsoring a rival bill that would enshrine the right of security agencies to collect bulk data.

Feinstein, who represents California, has been accused by critics of being a cheerleader for Washington's intelligence committee but now faces opposition from her state's largest industry.

The companies also repeat a previous demand that they should be allowed to disclose how often surveillance requests are made but this is the first time they have come together with such wide-ranging criticism of the underlying policy.

The industry's lobbying power has been growing in Washington and could prove a tipping point in the congressional reform process, which has been delayed by the autumn budget deadlock but is likely to return as a central issue in the new year.

The Feinstein and Leahy/Sensenbrenner bills agree with technology companies that there should be greater transparency of court rulings regulating surveillance and more opportunity for privacy advocates to argue against intelligence agency requests.

The eight technology companies also hint at new fears, particularly that competing national responses to the Snowden revelations will not only damage their commercial interests but also lead to a balkanisation of the web as governments try to prevent internet companies from escaping overseas.

“The ability of data to flow or be accessed across borders is essential to a robust, 21st century, global economy,” the companies argue in the list of reform principles. “Governments should permit the transfer of data and should not inhibit access by companies or individuals to lawfully available information that is stored outside of the country. Governments should not require service providers to locate infrastructure within a country’s borders or operate locally.”

And they argue foreign governments need to come together to agree new international standards regulating surveillance, hinting at legal disputes and damage to international trade otherwise.

“In order to avoid conflicting laws, there should be a robust, principled, and transparent framework to govern lawful requests for data across jurisdictions, such as improved mutual legal assistance treaty – or “MLAT” – processes,” say the companies. “Where the laws of one jurisdiction conflict with the laws of another, it is incumbent upon governments to work together to resolve the conflict.”

Official responses to the Snowden revelations have been angriest in countries subject to US surveillance such as Germany and Brazil, but more muted in countries such as Britain and Australia, whose governments are close partners of the NSA.

Martha Lane Fox, who recently resigned as the British government's digital champion, responded to the new letter by expressing concern at the lack of understanding of both the scale and complexity of the surveillance story within Britain's government.

"We do have an issue in this country among the corporate world, the political establishment and the general population where we have a shortage of skills and understanding for the digital age," she told the Guardian. "There is an absence of a clear, coherent debate around this subject in this country and it's a very big issue that will only become more frequent the more technologically dependent we become."

She pointed to comments made by the former Conservative home office minister Lord Blencathra and the Labour peer Lord Soley, who both expressed concern at the scope of surveillance by the security services.

"[The government] needs to listen to people, to examine whether their policies are fit for the digital age. It's not that people aren't used to their data being collected, but what it is being collected for, and there needs to be a distinction between the average person and a security threat."

The eight internet companies behind the new letter also acknowledge that business also has a responsibility to protect privacy.

“For our part, we are focused on keeping users’ data secure, deploying the latest encryption technology to prevent unauthorised surveillance on our networks, and by pushing back on government requests to ensure that they are legal and reasonable in scope,” they conclude.

“We urge the US to take the lead and make reforms that ensure that government surveillance efforts are clearly restricted by law, proportionate to the risks, transparent and subject to independent oversight.”

Google, Twitter, Yahoo and last week Microsoft have all responded to public concerns over surveillance by increasing the security of their products, introducing “perfect forward secrecy” encryption to protect information travelling on their internal systems.

"The security of users' data is critical, which is why we've invested so much in encryption and fight for transparency around government requests for information,” said Google's chief executive, Larry Page.

“This is undermined by the apparent wholesale collection of data, in secret and without independent oversight, by many governments around the world. It's time for reform and we urge the US government to lead the way.” 

U.S. fast-food workers rally for higher minimum wage

BY ELIZABETH DILTS

NEW YORK Thu Dec 5, 2013 6:07pm EST

62 COMMENTS

1 OF 10. Fast food workers attend a protest against McDonald's outside one of its restaurants in New York, December 5, 2013.

CREDIT: REUTERS/EDUARDO MUNOZ

(Reuters) - Fast-food workers in hundreds of U.S. cities staged a day of rallies on Thursday to demand higher wages, saying the pay was too low to feed a family and forced most to accept public assistance.

The protests escalated a series of actions at several Walmart stores on Black Friday, the day after Thanksgiving, seeking to draw attention to workers at the lowest end of the wage scale.

The description of fast-food workers, once viewed mainly as teenagers looking for pocket money or a first job, has changed. Today's fast-food worker is typically over 20, often raising a child, and 68 percent are the primary wage earners in their families, according to a report by the University of Illinois and the University of California, Berkeley.

About 100 workers in Chicago marched along Michigan Avenue with a large costumed Grinch, chanting: "We can't survive on $7.25." Protesters want the hourly U.S. minimum wage raised to $15 from $7.25.

In Kansas City, Missouri, Kizzy Sanders, 30, an employee at a local Popeye's restaurant, joined about 100 protesters picketing fast-food restaurants in freezing temperatures.

"I love my job, I love the people I work with, but the $7.70 I make does not cut it," said Sanders, a mother of three. "It doesn't pay my bills, I can't buy my kids anything for Christmas. I can't even celebrate Christmas."

Thursday's protests were organized by groups such as "Fast Food Forward" and "Low Pay is Not OK" that have the support of labor union giant Service Employees International Union, which represents more than 2 million members including healthcare, janitorial and security workers.

POVERTY-LEVEL WAGES

Despite the involvement of organized labor, the protests are focused on wages, not unions, for the moment, said John Logan, a labor studies professor at San Francisco State University's College of Business.

"The immediate goal is to focus national attention on the impact of poverty-level wages on employees and the negative impact of poverty-level wages for the public and the economy," Logan said.

Data from the U.S. Census Bureau and public benefit programs show 52 percent of fast-food workers relying on at least one form of public assistance, between 2007 and 2011, according to the report from the University of California, Berkeley, and the University of Illinois.

Shemethia Betler, a 33-year-old mother and cashier at a Washington-area McDonald's who earns $8.25 an hour, receives food stamps and temporary cash assistance, and said she feels like she is on the brink of homelessness.

"I'm worker and I'm making 8.25 an hour, and I have two kids and I'm living in poverty," Betler said during a protest in Washington.

Because the current minimum wage, on an inflation-adjusted basis, lags behind those of decades past, the purchasing power of minimum-wage earners has diminished.

Increasing the minimum wage, however, would not reduce poverty, said Michael Saltsman of the Employment Policies Institute, because employers will compensate by reducing staff and workers' hours.

Instead, they should expand the Earned Income Tax Credit, which provides a small-wage supplement for low-income families in the form of a tax refund, he said.

A 2012 study published by the Employment Policies Institute found that states that increase the Earned Income Tax Credit by 1 percent saw a 1 percent drop in state poverty rates.

Others disagree. Christian Dorsey, director of external and governmental affairs for the Economic Policy Institute, said tax credits should not let employers skimp on wages.

"Businesses have a responsibility to pay workers enough to keep them out of poverty," Dorsey said. "The idea that we would simply not look at wages is passing off the problem to someone else."

Jose Martinez, 26, a KFC cook who joined about 100 protesters outside a McDonald's in Oakland, California, said he still lived with his parents and recently dropped out of welding school because he could not afford the tuition. He said his job paid $8.25 an hour.

"If I made $15 an hour, I would support my parents, move out and go back to school," Martinez said.

Poverty wages in the land of plenty

The holiday season is upon us. Sadly, the big retailers are Scrooges when it comes to paying their workers

• 
• • Amy Goodman
  • theguardian.com, Thursday 5 December 2013 11.15 EST
  • Jump to comments (215)

A group of protesters walk through the Walmart retail store parking lot on Black Friday in Elgin, Illinois. Photograph: Jeff Haynes/Reuters

The holiday season is upon us. Sadly, the big retailers are Scrooges when it comes to paying their workers. Undergirding the sale prices is an army of workers earning the minimum wage or a fraction above it, living check to check on their meager pay and benefits. The dark secret that the retail giants like Walmart don't want you to know is that many of these workers subsist below the poverty line, and rely on programs like food stamps and Medicaid just to get by. This holiday season, though, low-wage workers from Walmart to fast-food restaurants are standing up andfighting back.

"Walmart was put in an uncomfortable spotlight on what should be the happiest day of the year for the retailer," Josh Eidelson told me, reporting on the coordinated Black Friday protests. "These were the largest protests we've seen against Walmart ... you had 1,500 stores involved; you had over a hundred people arrested." Wal-Mart is the world's largest retailer, with 2.2 million employees, 1.3 million of whom are in the US. It reported close to $120bn in gross profit for 2012. Just six members of the Walton family, whose patriarch, Sam Walton, founded the retail giant, have amassed an estimated combined fortune of between $115bn to $144bn. These six individuals have more wealth than the combined financial assets of the poorest 40% of the US population.

Walmart workers have been organizing under the banner of OUR Walmart, a worker initiative supported by the United Food and Commercial Workers union. Workers have taken courageous stands, protesting their employer and engaging in short-term strikes. Walmart has retaliated, firing many who participated. One of those fired wasBarbara Collins, who worked for eight years at the Walmart in Placerville, California. 

"I was terminated for speaking out," Collins told us on "Democracy Now!" On 18 November, the National Labor Relations Board (NLRB) ruled that the strikes were protected worker actions. Collins, who was speaking to us from Bentonville, Arkansas, where she was protesting Walmart at its world headquarters, told us:

The NLRB ruling is just overwhelming. We are really excited that they found that we're telling the truth, that they broke the law, and we want to be reinstated.

The public policy think tank Demos issued a report, "A Higher Wage is Possible: How Walmart Can Invest in Its Workforce Without Costing Customers a Dime" (pdf). Demos analyzed a growing demand from the Walmart worker movement for a guaranteed base salary for full-time workers of $25,000 per year. "We found talking to Walmart workers over and over again that their wages give them just enough to meet their basic needs, and at the end of every month, they're making critical trade-off decisions," Catherine Ruetschlin, one of the report's co-authors, told us. "Determining whether they're going to get medicine or pay their school fees or put food on the table or keep their electricity on." The report explains that "if Walmart redirected the $7.6bn it spends annually on repurchases of its own company stock, these funds could be used to give Walmart's low-paid workers a raise of $5.83 an hour," meeting the salary goal of the workers. 

Parallel to the Walmart campaign is a drive for higher wages in the fast-food industry. In more than 100 cities, workers are organizing protests and strikes ... and winning. In SeaTac, the Washington state municipality where the Seattle-Tacoma Airport is located, voters approved a local minimum wage of $15 an hour. As with Walmart workers, fast-food giants like McDonald's and Yum Brands (which owns KFC and Taco Bell) all feast from the public trough: their workers, earning poverty wages, depend on public-assistance programs like food stamps and Medicaid, while their enormous CEO benefit packages qualify for corporate tax deductions, as reported by the Institute for Policy Studies this week.

The current federal minimum wage is $7.25, equivalent to an annual income of $15,080 for a full-time worker. If the minimum wage had kept up with inflation since 1968, it would be $10.74, enough to lift a family of three above the poverty line. If the wage had grown at the same pace as worker productivity (since each worker per hour produces much more now than in decades past), it would be $18.72 per hour. And if the minimum wage had skyrocketed at the same pace as wages for the top 1%, it would be $28.34. These figures from the Economic Policy Institute explain why President Barack Obama is pushing for an increase in the minimum wage.

Progress on the minimum wage, and on workers' rights at Walmart, McDonald's and the other multinational corporations that depend on public subsidies for their workers, will come not from a stroke of the president's pen, but from the concerted efforts of workers and their allies, from the streets to the voting booths.

US fast-food workers strike over low wages in nationwide protests

Thousands due to strike across 100 cities through the day in a signal of the growing clamour for action on income equality

• Q&A with a McDonalds worker in Chicago

• Adam Gabbatt in Chicago
• The Guardian, Thursday 5 December 2013 15.11 EST
• Jump to comments (578)

MoveOn members are protesting at McDonald's locations in Seattle, San Francisco, New York, Los Angeles and Chicago. Photograph: Eduardo Munoz /Reuters

Thousands of fast food and retail workers went on strike across the US on Thursday in a signal of the growing clamour for action on income equality.

In Chicago, hundreds of protesters gathered outside a McDonalds at 6.15am. As a large "Christmas Grinch" ambled about in freezing temperatures, demonstrators chanted for the minimum wage to be increased to $15 per hour.

It was the first of nine strikes in Chicago, with employees at McDonalds, Wendy's, Walgreens, Macy's and Sears also due to walk off shift. Low wage workers were due to strike across 100 cities through the day, including Boston, Detroit, New York City, Oakland, Los Angeles and St Louis.

"To put it in perspective, yesterday I got paid, today I have not a dollar in my pocket," said Akilarose Thompson, 24. She was on strike from the McDonalds in Chicago's West Town – the scene of Thursday morning's protest that kicked off actions around the city.

Thompson has worked at McDonalds for almost a year, serving customers on the cash register or on the drive-thru window. She got a pay rise in June and now earns $8.28 an hour – three cents above Illinois's minimum wage of $8.25. Thompson works a second job too, at Red Lobster, but still has to go to food banks to support her and her 15-month-old daughter.

"Sometimes two or three a month. Lots of times you can only go to the same one once a month, so I find different ones to go to. I have to in order to put food on the table," she said.

"It is so depressing. You put a smile on because you're in customer service and you have to. But on the inside it really breaks you down when you're always at work but you're always broke."

She is not alone. The Greater Chicago food depository, which donates food through banks, pantries and soup kitchens, says it helps 678,000 adults and children in the Chicago metropolitan area every year. 

The hardest thing, Thompson said, is the compromises she is forced to make because she does not earn enough money. She lives in West Humboldt Park, an area blighted by drug dealing. She worries about not being able to provide for her daughter.

Thompson had been studying homeopathy at college with the hope of a career in natural medicine. She had to put that on hold when she took her second job. Photo: Adam Gabbatt

"It's the Christmas holiday, and I can't buy presents. I actually had to choose between buying my baby a coat and starting her Christmas shopping. That's my biggest thing right now – I'm afraid I won't be able to provide her her first proper Christmas because I have so many checks coming."

The nationwide walkouts come as momentum appears to be gathering for action on increasing the federal minimum wage. On Wednesday, President Barack Obama gave a landmark speech on income equality, which he said was "the defining challenge of our time", while in November thousands of Walmart workers walked off the job in the latest of a series of protests against low pay and poor conditions.

The federal minimum wage – which many fast food and retail outlets pay employees – is $7.25, or about $15,000 a year for full-time work. That rate was set in a 2009 measure that increased the minimum wage but still left it, in real terms, at the same rate as when Harry Truman was in office – a fact Obama mentioned in his speech on Wednesday.

The rate is actually higher in Chicago, as Illinois has set its own minimum rate of $8.25 per hour. But protesters say it is still far too low. Backed by unions such as the SEIU nationally and smaller coalitions in different cities – in Chicago, the Fight for 15 campaign has been put together by the Workers Organising Committee of Chicago, made up of a series of smaller action groups such as Arise Chicago and Lakeview Action Coalition – campaigners are calling for the federal rate to be increased to $15 per hour.

"It would be life changing," Thompson said on Thursday, as the 200 or so protesters circled the McDonalds parking lot, the Grinch bobbing around outside the drive-thru window.

"I would be able to move and that is my sole thing right now. I have to get my daughter into a better neighbourhood. I have to.

"So if I was able to afford that then I could walk with my head held high. No more crying at night. Because you can't cry in front of the kids because they'll know something is wrong."

At 9.45am around 200 protesters had gathered outside a Walgreens in downtown Chicago. "We can't survive on eight-twenty-five," the crowd chanted as it approached the store, before segueing into: "Walgreens, Walgreens, you can't hide. We can see your greedy side."

Dejaun Jackson, 23, has worked at Walgreens for two years and was on strike on Thursday. He actually earns $10.49 an hour – above the proposed Senate measure – but says it is not enough to survive on.

As the crowd moved further south down Chicago's State Street, stopping outside Sears at 10.30am and Wendy's at 11.30am in a carefully orchestrated display of dissatisfaction, Jackson explained that his main hope in earning more money was to move his two children, aged six and four, to a better neighbourhood, following a sobering incident last year outside his home in Chicago's West Side.

Dejaun Jackson, protesting against low pay, works at Walgreens in Chicago. Photograph: Adam Gabbatt/The Guardian

"It was last summer but I remember it like it was yesterday," he said. "It was about 2pm, 2.10pm in the afternoon, the kids were outside playing and we were just standing on the stairs. A black car pulled up at the intersection and just let rounds go. 

"They were shooting at a rival gang and just let rounds go. The kids were just screaming, so we're running out grabbing the kids and bringing them back in the house and after that, that just lets me know where I'm at.

"All I want to be able to do is for my kids to be able to go in the front yard and just go play. They can't even play outside."

In New York state, where the nation's largest metro region, New York City, is home to 55,000 fast food workers, the minimum wage is at the federal rate of $7.25. A series of strikes were due to take place there on Thursday.

Obama called for the federal rate to be increased in his speech on Wednesday, specifically mentioning fast food and retail workers in a demonstration of the impact demonstrations are beginning to have.

"I’m going to keep pushing until we get a higher minimum wage for hardworking Americans across the entire country. It will be good for our economy. It will be good for our families," Obama said.

Fast food workers attend a protest against McDonald's outside one of its restaurants in New York on Thursday. Photograph: Eduardo Munoz /Reuters

The president has suggested he would back a Senate measure to increase the minimum wage to $10.10, although Republicans oppose the initiative. Obama had previously called for the wage to be increased in his State of the Union address in February. Critics say little progress has been made since then.

For Thompson and her colleagues, change cannot come soon enough. Thompson had been studying homeopathy at college with the hope of a career in natural medicine. She had to put that on hold when she took her second job.

"I was in the process of getting all my pre-reqs done and then I had to take off a semester. Unfortunately one semester turned into two. But I do intend on going back to school."

Jessica Davis, 25, works with Thompson. Davis is a crew trainer, meaning she trains new employees. She has worked for McDonalds for four years and earns $8.88 an hour.

Like Thompson, she has had to put her job before her education. She was studying for a degree in sociology and would like to work in a juvenile detention center with at-risk youth, but is unable to earn enough money to finish her studies.

"I had to put that on hold. I owed them some money so I can't register for classes. The money I'm making here I'm not able to pay them back. With two small children emergencies happen. Just last month my daughter was sick so I had to miss a day of work. That day showed up big time in my pay check."

Davis said she sometimes struggles to pay her bills and worries about caring for her two daughters, aged four and four months. Her parents help sometimes – other times she skips the bills and risks getting into debt.

"They say this is supposed to be a starter job but really we don't have any other jobs to go to. There's nothing else out there," Davis said. "We're just tired of making multi-million dollars for this company and at the end of the day we have nothing to show for it."

Davis said a higher minimum wage would enable her to change her life.

"I would have more money for my children. And I would have money to go back to school with,” she said. “We would be able to float. And right now we're sinking."