by Sean Raycraft
January 1st 2022, the great state of California will have a minimum wage of $15 an hour for large employers. A long time ago, in a small college town, a group of organizers got together with the intention of fighting for a “radical” idea. An actual living wage for working people in our community. A $15 an hour minimum wage. The reaction from the political establishment was mixed. Some leaders were happy to give us private assurances, some were vocally opposed to any minimum wage increase. Some spoke out of both sides of their mouth. My favorite line was “I respect the desire to raise the minimum wage” from one Davis city council member. Others were genuinely on board from the beginning. I will forever be grateful to then-mayor Joe Krovoza for standing up for what was right, even though it was not politically convenient at the time.
In 2021, supporting a national $15 minimum wage is practically a requirement to be an elected Democrat. In Florida, in the 2020 Presidential election, more than 60% of voters voted in favor of a $15 minimum wage. Trump easily won Florida, but so did the gradual minimum wage increase, with a substantially higher margin of victory. Perhaps Sinema and Manchin would be wise to look at those numbers, and vote accordingly. As Americans, we have come a long way on this issue.
Flash back to 2013 in our little progressive bubble of Davis, California. A $15 minimum wage was a political impossibility. The local business community, dreading having to actually pay workers a livable wage, pulled out all the stops in order to prevent poor people from having a slightly better life. In honor of the final implementation of a $15 minimum wage in California, I am going to share the top ten, pearl clutching, hyperbolic talking points put out by the business community in response to our campaign to raise the minimum wage. Some were outright false when they were uttered, others have been proven very wrong by history.
- “It’s a radical idea. It’s an arbitrary number”
As the Florida results show, polling consistently shows a $15 minimum wage is tremendously popular. It may have been a radical idea in 2013, but so is any idea that might actually help poor people at its inception. Having the right to vote without property?! What a radical idea! I can hear the conservatives clutching their pearls all the way back to the English revolution.
It is true, the number feels somewhat arbitrary, but it is not. We put a lot of thought into it. Some arithmetic will show just why $15 was the magic number. $15 an hour at 2000 hours a year (full time) comes out to $30,000 a year. Sounds like a big number right? Think again.
Do you think people can live comfortably on 30,000 a year? Let’s break it down real quick. The cost of a one-bedroom apartment in Davis is currently $1,600 to 2,100 a month. Some arithmetic shows that’s anywhere from 19,200 to 25,200 income in a year going directly to rent. Even at 30,000 a year (before taxes) that leaves roughly 5,000-11,000 for an individual to live on in an entire year. Or if we want to break it down monthly, that’s roughly $450-900 a month for food, utilities, car, gas, health insurance. Let’s hope you don’t get sick! Imagine trying to support a family, manage work and school, or your health on 30,000 a year. For all the back-and-forth discussions we had, Kemble Pope was right about a few things. One of them was the desperate need for more affordable housing in Davis. For what it is worth, the new “affordable” studio apartments at University Commons are supposedly going for 2,100 a month. Yikes.
- “Poor people do not budget properly”
This particular gem was parroted by many in the local business community, and national business leaders. The same soft handed paper pushers who complain about millennials and avocado toast came up with this Marie Antionette of a budget:
This “Budget” if it can even be called that was propagated by McDonald’s in response to efforts to raise the minimum wage. Hilariously, you can see the Dickensian executives at McDonald’s think health insurance costs $20 a month, assumes the worker has two jobs (one job should be enough!), budgets literally nothing for gas, childcare or groceries. They literally ended up proving a worker cannot make ends meet on a minimum wage job. The exact opposite of what McDonald’s set out to prove.
- “You are going to end up hurting the people you are trying to help. Companies will just cut hours or staff positions to make up for the increase in labor costs.”
Whenever I go out to eat, go to the grocery store, get gas, stay at a hotel, or visit websites I see a common theme… Help wanted signs. I see signs asking customers to be patient, that the store or restaurant is understaffed, or reduced hours of operation due to lack of available staff. I see signs promising $16 an hour at the local McDonald’s. The minimum wage has gone up every single year since 2015 in California. I have not seen the promised “job killer” minimum wage actually killing minimum wage jobs. This narrative of the “job killing minimum wage hike” has been hilariously debunked by actual workplace needs. Turns out, employers still need workers to cook, clean, check out, clean, take care of the elderly, work the fields and cut the meat, regardless of what that wage actually is.
- “You are going to destroy entry level jobs through incentivizing automation”
Automation happens regardless of what the worker’s wages actually are. Turns out no matter how much companies would like to automate jobs, automation and technology are tools to make workers more efficient at the workplace, not replace them. How many people get frustrated with an automated customer service phone line? How many try to figure out what is the quickest way to get an actual person on the phone to resolve the issue? How many people actually like using a self-checkout machine? Do you work there? Is there an unexpected item in the bagging area? I have serious doubts about automation killing all the entry level jobs. Clearly, we as a society cannot currently fill all the available entry level jobs.
- “Mom and pop shops are going to all close”
When I go out to eat in Davis, I see that Burgers & Brew, Mishka’s, Crepeville, Taq Davis, Kathmandu Kitchen, Woodstock’s, and Wok of Flame are all doing just fine. I do see quite a bit of help wanted signs at those locations too. It would seem the minimum wage increases are not causing mom and pop to lose their business. Instead, I would argue that it is actually the anti-trust and anti-competitive behavior of Amazon that actually causes a lot of small brick and mortar retailers to go under. Amazon and the outrageous commercial rent increases businesses are facing, that is.
- “Do you really think burger flippers deserve a $15 minimum wage?”
This one was a favorite of our ever-present armchair internet economists. Short answer, yes, I do. All labor has dignity. If you work hard and play by the rules, you deserve a fair wage, full stop. Dealing with Karen alone should be worth at least $15 an hour. Have you ever had a customer yell and scream at you because you will not take a coupon that expired 2 months ago? I have. It’s not a fun experience.
- “You better be prepared for $15 hamburgers”
I must admit, this is my favorite bad faith argument put forward. I literally had a local business owner shout this to me while driving by in his brand spanking new BMW. The terrible irony is just how wrong he really was on this. Recently, I had to travel for a work assignment. I found myself at a local Starbucks in lovely Houston, Texas, a couple weeks ago. I ordered my usual “treat myself” order of a large Earl Grey tea (No sugar or cream) and a warm chocolate chip cookie. To my surprise, this order was actually more expensive in Houston, than my local Mace Blvd. Starbucks. In Texas, the order was $5.85. In California, my Captain Picard approved order costs 45.40 as of December 31st, 2021. The minimum wage in Texas is a whopping $7.25 an hour. At home here in Davis, it’s almost double that, at $14.00. What gives, Texas? I thought everything would be much cheaper with that low a minimum wage? That experience was repeated throughout my time in Texas. Whenever I went out to eat, the food was right about what I paid here in California. Fun bit of knowledge about Texas… Your employer can actually pay you less than $7.25 an hour if you earn more than $20 a week in tips.
But Sean, what about the actual hamburgers?! Are they $15 a pop now? Short answer? No. Back in 2013, the price of a Double Double at In-N-Out was $3.25. According to their website, the current price for a Double Double at our traffic jammed In-N-Out on Richards is a whopping $3.45. (and they are hiring). It would seem that the increase in the minimum wage here in California has had a negligible effect on burger prices, despite the rude BMW driver’s predictions. (He’s doing just fine, BTW.)
- “Minimum wage was never meant to be a living wage”
This is one of those arguments propagated by conservative media, and yes, parroted by some of our friends in the local business and politico community. Truth is that, at its inception, the minimum wage was literally meant to be a living wage. Here is what FDR said in 1933:
“In 1933, the first year of his presidency, Franklin D. Roosevelt signed the National Industrial Recovery Act, aiming to support a depressed economy with a number of innovative measures. FDR declared that “no business which depends for existence on paying less than living wages to its workers has any right to continue in this country,” clarifying that “by living wages I mean more than a bare subsistence level—I mean the wages of decent living.”
I tend to agree with FDR on this one.
In defense of our local business community, the minimum wage had been losing buying power since its height in 1968, so most of them never experienced a minimum wage actually being a living wage. Since 1968, worker productivity has skyrocketed, while wages have remained relatively stagnant. Essentially, people have been working harder and have less to show for it.
- “Poor people are lazy”
This is another favorite quip of our friends who consume too much right wing media. People who have never worked with their hands, worked in hospitality, food service sector, retail or agriculture often have no idea how hard this work actually is. When you get home, you are often physically and emotionally drained from being on your feet, lifting, dealing with unappreciative customers and long hours. Poor people often work a lot harder than their better off employers. Does anyone think farm workers are lazy? Personally, I think Jeff Bezos is lazy if he has time to fly himself and all his rich friends into space.
Occasionally, wealthy parents of UCD-bound students buy homes in Davis as a rental investment for their kids. The kid gets “free” housing, and the parents get an asset with guaranteed returns on investment in the form of ever-increasing rent from tenants. Who is lazy in this scenario? The landlord? The trust fund kid? The minimum wage worker who dutifully pays year over year rent increases? All of them? None of them?
- “Minimum wage workers are all teenagers, they don’t need a living wage”
According to numerous studies, the median age of low wage workers is 28. Many have families or are the bread winners for their household. This comes down to simple math. Living human=living wage.
So why write this? Why now?
It is important for us as citizens, thought leaders and elected officials to remember the business community is not infallible when it comes to economics. Predictions of doom and gloom if we raise the minimum wage, or provide paid sick days, or paid family leave are more often than not hyperbole. It is political messaging designed to protect the bottom line profit margins for the business community at the expense of the public good. I felt it important to remind everyone just how wrong members of this community were on this issue (and a whole lot of other issues too). Politically speaking, business leadership groups like the Chamber of Commerce behave just like any other interest group. They act in their own interest, not the public interest.
Sometimes, their interests align with the public, but often these interests diverge or change with the whims of public opinion. For example, McDonald’s recently announced that they would no longer lobby against minimum wage increases. Why would McDonald’s make such an about face on this issue? Being the public face of so much poverty and exploitation has made it difficult for them to fulfill their labor needs. Who would want to go work for them with their reputation for low wages and terrible working conditions? The same dynamic applies to Amazon, Walmart and Target. That’s why you see those “Now hiring 16$ an hour” signs in front of that Chiles McDonald’s. They have decided, at least for the time being, that raising wages is actually good for their business.
Is $15 an hour enough? I certainly do not think so, given the current local rental housing market. Most financial advisors recommend 30% of your monthly budget go to rent. At these rental prices, $20 an hour is not enough to achieve financial stability. Can you imagine where we would be if the minimum wage was still $10 an hour in California? My question to you all is what are we going to do about it?
So, when someone from the business community predicts doom and gloom if universal health care, paid family leave, a union, a carbon tax, or, heaven forbid, a living wage passes, just know they do not know that for a fact, they are just trying to protect that sacred cow; their bottom line. Keep pushing, you can and will win if you do not accept the status quo, because the status quo is unacceptable. Direct action gets the goods, my friends.
Sean Raycraft is a lifelong Davis resident. Opinions are my own, and not those of organizations I affiliate with.