Big retailers are finally on board with $15 minimum wages, but the pandemic revealed that workers need a lot more from their employers

fight for $15
Is a $15 minimum wage enough anymore?

  • Workers and activists have long pushed for a $15 federal minimum wage.
  • The ongoing labor shortage has prompted numerous companies to raise pay.
  • But advocates say that a $15 minimum wage isn’t the end-all-be-all for labor.
  • See more stories on Insider’s business page.

Walmart-owned Sam’s Club told workers this week that it wants them “to feel valued” and be “treated with fairness, kindness, and empathy.” That messaging came alongside a chain-wide minimum wage raise to $15 an hour. Around 95% of the warehouse chain’s workers were already making at least that, but the aim is to have the company’s “average hourly rate” established at over $17.

“We want you to be competitively paid, whether you’ve found your destination job as, say, a forklift operator, meat cutter or cake decorator, or you’re just starting out and eager to climb the ladder,” CEO Kath McLay wrote in a memo to workers.

And Sam’s Club isn’t the only business that’s been touting a new minimum hourly wage, even as Congress’ efforts to raise the federal minimum wage have seemingly stalled out. Both Walgreens and CVS have also established $15 as an hourly minimum wage. Amazon previously established its minimum wage as $15 an hour in 2018. The e-commerce giant also raised pay for half a million workers, and on Tuesday announced that 125,000 new workers would be hired with an average starting pay of $18 an hour.

Still, throughout much of the US, many employees still aren’t anywhere near a $15 hourly wage. A March 2021 report from the Economic Policy Institute, a left-leaning, pro-union think tank, found that a $15 minimum wage would boost earnings for 32 million workers, or 21% of the total US workforce.

The EPI also found that “rising costs of living” have “diminished the purchasing power of the federal minimum wage” by 18% since 2009, leading to “a devastating fall in the earnings of the lowest-wage workers.”

Activists are currently focusing on certain business giants that haven’t yet established an hourly baseline of $15.

“We won’t stop fighting until McDonald’s and other fast-food companies pay at least $15 an hour, which is the bare minimum workers anywhere need to survive,” Patricia Mosley, a Michigan-based McDonald’s worker associated with the labor movement Fight for $15 said in a statement sent to Insider.

“McDonald’s USA recently announced an average 10 percent pay increase at its corporate-owned restaurants, while many franchisees are exploring increased wages, offering tuition assistance and piloting backup childcare programs,” a McDonald’s USA spokesperson said in a statement sent to Insider.

Retail workers in particular have acquired more leverage through the coronavirus pandemic. Some have rage-quit their jobs, in response to frustrating working conditions and abusive customers. Certain workers have begun “ghosting coasting,” where they show up for work long enough to get paid, only to then disappear. Retailers are beginning to address how the ongoing labor shortage may affect the holiday season, and that often means offering higher pay and signing bonuses to attract candidates and bolstering retention through competitive benefits. Companies like Amazon and Walmart have doubled down on perks for workers, like educational benefits.

While it may not go a long way in practice, a $15 baseline wage remains a key goal for some activists and workers. Labor activist group United for Respect’s corporate accountability director Bianca Agustin said in a statement to Insider that raising base pay to $15 an hour “would be the right thing to do and smart business practice, so associates can help ensure the safety and profitability of Walmart stores in the near and long term.”

Walmart’s current average wage across US stores is $16.40. Walmart worker and UFR member Peter Naughton said that he hopes his employer will raise its base pay, as doing so could change employees’ lives and spur wage increases from rival retailers.

“I might be able to get my own apartment,” Naughton said. “I’d have more money to spend. In fact, that would help corporations like Walmart because people would have more money to spend.”

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From an $18 hourly wage to the ‘new factory town,’ Amazon is taking the lead on lifting up America’s working class

Amazon warehouse
Amazon warehouse in Brieselang, Germany.

  • Amazon’s rapid expansion means they have a chance to create a better economy for working-class Americans.
  • It plans to add 125,000 more US jobs, and to open 100 new facilities in September alone.
  • The firm’s huge hiring plans, higher wages, and new hubs have the scale that could change the economy for countless Americans.
  • See more stories on Insider’s business page.

While the US continues to grapple with COVID, Amazon is busy molding the post-pandemic economy. Early signs and historical precedent suggest it could improve work for millions of Americans.

Amazon employed 950,000 US workers as of late June, or one in every 153 American workers. It plans to add more than 125,000 more payrolls, as well as open more than 100 more facilities in September alone. More significantly, it plans to pay people more and to create jobs in areas where they are sorely needed.

Amazon’s leadership on wages recalls that of Henry Ford’s action to lift his minimum wage in 1914, as Insider’s Hillary Hoffower and Allana Akhtar previously reported. It’s a goal shared by the Biden administration, which has repeatedly stressed it wants to build the economy “from the bottom up and middle out.”

Amazon is his unlikely partner in this effort.

Setting the new wage floor

While the federal minimum wage remains $7.25 an hour, the retail titan is setting its own, higher minimum.

The company set a $15 minimum wage in 2018, and it quickly prompted other employers to either match this rate or lose workers.

One Miami chef told The Washington Post that higher pay in Amazon warehouses made hiring in a strenuous kitchen more difficult. Larger businesses including Levi’s and Under Armour have said Amazon’s rates forced them to rethink their own wages. It is borne out in academic studies. Amazon’s hike raised average hourly wages by 4.7% at nearby employers, according to researchers at the University of California, Berkeley and Brandeis University.

That bounce is set to repeat itself, with Amazon’s latest hiring boom touting an average starting wage of $18. While Democrats failed earlier this year to lift the minimum wage for the first time in 20 years, Amazon’s expansion is shifting the de-facto floor above the party’s $15 target.

“I don’t think people appreciate the extent to which Amazon puts a wage floor in a community,” Tum Duy, chief economist at SGH Macro Advisors, wrote in a Tuesday tweet. “It’s the first thing employers think about when a new Amazon facility arrives in town.”

Building the next-generation ‘factory town’

By dramatically expanding its footprint, Amazon could form a new kind of “factory town” that would further lift the country’s working class, as Conor Sen, an economics columnist at Bloomberg, wrote Thursday. “Maybe these highway warehouse communities with jobs that pay increasingly respectable wages are what the future of the working class looks like.”

The phrase “factory town” recalls those that dot Michigan, connected to automotive giants Ford, General Motors, and Chrysler, which molded the state in the early 1900s as their factories became economic hubs and birthed new cities. Where the industrial titans brought jobs, workers and other businesses followed. Amazon’s huge warehouse plans offer a 21st-century parallel.

Data shows Amazon hubs already powering stronger economic growth. In Amazon’s top 10 metro areas, job creation averaged -0.4% in the three years before the company’s entry, CNBC reported in 2018, citing Morgan Stanley research. In the three years after its first facilities opened, local job growth averaged 1.9%.

Some cities saw even larger jumps. In the Phoenix area, job creation rose to 2.5% from -6.3%. The Riverside-San Bernardino-Ontario region of California saw growth of -0.8% surge by 8.5% after Amazon opened several warehouses and sorting facilities.

The booms also extended beyond Amazon’s own employees. The cities’ transportation, warehousing, and utilities sectors – the last of which includes no Amazon hires – saw job growth outperform by 3.6%, according to Morgan Stanley.

To be sure, Amazon jobs aren’t without their well-publicized downsides. Stories of overworked employees, harsh conditions, and safety concerns abound. The company has also been accused of quashing a unionization effort.

Amazon has said it aims to improve its working conditions, but by sheer force and scale it is putting its thumb on the scale of the blue-collar economy.

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Walgreens is raising its minimum wage to $15, matching CVS as it competes to hire workers

Walgreens store in Oakland, California.
Walgreens store in Oakland, California.

  • Walgreens is raising its minimum hourly wage to $15 amid the labor shortage.
  • Gradual raises will start this October, with full implementation expected by November 2022.
  • CVS announced a $15 minimum wage earlier this month. Amazon, Costco, and Target also meet the standard.
  • See more stories on Insider’s business page.

Walgreens announced Tuesday that it will raise its minimum wage to $15 an hour, following CVS Health’s pay increase announced earlier this month.

Walgreens employees will start to see gradual raises starting this October, the company said. The pharmacy expects the minimum wage to be fully in effect in all 9,000 stores by November 2022.

The salary hike follows similar moves by competitors to raise worker compensation during the national labor shortage. Retailers Amazon, Costco, and Target also offer a $15 minimum wage. The current federal minimum wage is $7.25.

“Investing in and rewarding our team members is not only the right thing to do, it’s highly important to retaining and attracting a talented workforce, and to continuing to serve our critical role in community health care,” said the CEO of Walgreens Boots Alliance, Roz Brewer.

In a statement, Walgreens said it expects to invest a total of $450 million on the wage increase over the next three years. It added that bonus payments and hiring initiatives rolled out throughout the pandemic have led to the hiring of 25,000 full-time and part-time workers.

As the labor shortage continues to impact small businesses and large corporations across the US, experts say higher pay is the only real solution. For the past five decades, the average worker’s wage has not kept up with the country’s increased cost of living, Insider’s Ben Winck and Andy Kiersz reported in May.

According to Indeed, a typical Walgreens cashier currently makes around $10.72 per hour, while a sales associate is paid around $9.33 an hour. The highest-paid position listed on the site is a senior merchandise manager, making over $130,000 a year.

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The typical Chipotle customer is a white Millennial who spends their money on skincare and wine, according to the data

Chipotle
Chipotle

  • The average Chipotle customer is a white married Millennial.
  • Chipotle is part of the rise of fast-casual restaurants after a hugely successful quarter.
  • The average customer visits Chipotle nine times a year and spends about $150.
  • See more stories on Insider’s business page.

The typical Chipotle customer is a white millennial between 25 and 34 years old, according to data provided by analytics firm Numerator. These customers tend to be married without children, likely living in an urban area. They’re likely to have a college degree and make more than $80,000 a year.

The average Chipotle customer is slightly more likely to be white at 51%, but the fast-casual chain’s customers are more likely to be people of color than customers at other quick service chains. They are also more likely to be male compared to other chains.

Read more: Chipotle CEO Brian Niccol answers 9 questions about the chain’s future including the fight for delivery profits, menu innovation, and franchising

Chipotle shoppers spend $17.08 per trip to the fast-casual chain, equal to about the cost of two entrees. They average around nine Chipotle trips per year, less than one a month, for total yearly spending of $147.26. About 15.4% of all their quick-service restaurant spending goes to Chipotle in a year. Like the average Chick-fil-A customer, this Chipotle customer also spends more at McDonald’s annually.

The average Chipotle customer is into shopping more broadly, not stopping at fast-food chains. They make 200 trips per year to retailers than the average US consumer, spending more than average too. They spent $33.87 on average per trip across all retailers, with just 1.1% of that spending at Chipotle.

The Chipotle buyer takes the largest share of their average retail spending to Walmart, where they spend about 8% of the total. Their top fast-food brands are Chick-fil-A, Taco Bell, Wendy’s, Subway, and Burger King. At these chains, Chipotle customers are most likely to buy coffee, breakfast sandwiches, chicken sandwiches and wraps, sodas, or another chicken entree.

Though more Chipotle customers are millennials, Gen Z is overrepresented among its customer base. This popularity among Gen Z shows up in the customer data – Chipotle shoppers’ top shopping categories are wine, body skincare, face care, toothbrushes, and sports and energy drinks. Gen Z spends more than any other generation on skincare.

Gen Z is also highly active on social media, where Chipotle is successfully reaching customers. Chipotle has one of the most popular brand pages on TikTok and has even started accepting resumes through the video app to reach Gen Z more directly.

Chipotle just posted a successful quarter, with its most profitable period for its stores since 2015 after raising wages for workers. In June, the fast-casual chain raised prices by about 4%, increasing the price of the average Chipotle meal by about 30 to 40 cents.

Chipotle also raised wages, boosting the average hourly pay to $15, an increase of $2 over the previous average of $13. When it raised prices, Chipotle said it was prompted by rising labor costs. The chain had previously warned that labor costs would be passed onto customers.

Do you have a story to share about a retail or restaurant chain? Email this reporter at mmeisenzahl@businessinsider.com.

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‘Minimum wage equals mediocre person’: A Florida deli was flooded with 1-star Google reviews after its viral hiring sign drew a huge backlash

A waitress is taking a customer’s order at a table. There are other customers and another server in the background.
A waitress takes an order from a customer at the reopening of Langer’s Delicatessen-Restaurant in Los Angeles on June 15, 2021.

  • A deli has drawn swift backlash for its hiring notice, which calls minimum wage workers “mediocre.”
  • The Florida Jason’s Deli location was flooded with 1-star Google reviews after the sign went viral.
  • The sign said staff should work like two people for $12 an hour and outdo the owner for $15 an hour.
  • See more stories on Insider’s business page.

A deli in Florida has drawn swift backlash after posting a hiring notice that called minimum wage workers “mediocre” people.

A hiring notice for the Jason’s Deli location in Melbourne, Florida, went viral after a Twitter user posted a photo of it on Sunday, writing “Saw this at a deli in town, this realllllly doesn’t sit right with me.”

The sign notes that the deli is hiring for all positions and reads, “Minimum wage equals mediocre person.”

The sign also details expectations for workers at various levels of its pay scale.

The deli says $9 an hour is for workers who are in their first job and “willing to learn.” For workers who have “some experience,” the deli would pay $10 an hour. Staff making $11 an hour should be “reliable” and “multi-taskers,” according to the sign. For $12 an hour, the deli expects that an employee “works like 2 people.” At that hourly wage, the deli also wants workers to be “better than most” and bring “zero drama” to the workplace.

The sign says workers making $13 an hour should be “supervisory material.” At $14 an hour, the deli wants a worker who “cares like the owner does” and “brings positivity to the environment.” For $15 an hour or more, the deli expects an employee who “outshines and outperforms the owner.”

The location was bombarded with 1-star Google reviews after the tweet went viral.

“Stay away if you want a job that respects you,” one reviewer wrote.

“They refer to minimum wage employees as ‘mediocre people’ and are wondering why nobody wants to work there. Screw the owners, do yourself a favor and don’t support this terrible business,” another 1-star review reads.

“Pay your workers,” a third review put simply.

Read more: Employees are quitting their jobs in record numbers. Here’s how to tell if you’re losing people for the right reasons.

On Twitter, users also sounded off in the tweet’s comments to express their disapproval of the deli’s expectations.

“If I’m working like two people I should be getting two salaries,” one user wrote.

“If you do more work than the boss, why would they pay you $15/hr instead of giving you the bosses [sic] salary?” another person commented.

The sign has since been taken down.

“The manager of our Melbourne, FL, location did post a sign with the intent of letting prospective applicants know that we encourage upward movement for all of our employees through our Career Path,” Jason’s Deli President and COO Ragan Edgerly told Insider. “While the pay scale does reflect the average starting pay rate in that market, the descriptions used do not accurately reflect Jason’s Deli’s hiring practices and the sign was immediately removed.”

Many companies across the US are struggling to fill open positions at existing wages as workers leverage the tight labor market to demand better pay. In response, some companies are offering incentives like raises and education benefits to attract workers. Jobs site Indeed says the number of job listings that offer incentives on its platform has doubled in the past year.

Edgerly says Jason’s Deli is feeling the effects of this labor crunch.

“Jason’s Deli is facing the same hiring pressures that are common across the country right now and we are aggressively hiring highly motivated people,” he said. “We are also extremely committed to offering a competitive and fair wage.”

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Restaurant and grocery store workers are now earning over $15 an hour on average

minimum wage protest
A group of BLM demonstrators protest the Federal Reserve Bank about $15 minimum wage in NYC to solidarity nationwide in Lower Manhattan at the financial district in New York, United States on July 20, 2020

  • For the first time ever, restaurant and grocery workers are earning over $15 an hour on average.
  • That’s according a report from the Washington Post, which found about 80% of workers now make above $15.
  • However, the federal minimum wage of $7.25 hasn’t changed since 2009.
  • See more stories on Insider’s business page.

A new report from the Washington Post finds that restaurant and grocery workers are earning, on average, over $15 an hour.

It’s the first time that that’s ever happened, and another sign of wages increasing in a tight labor market that’s seen workers quitting en masse, seeking wage transparency from job postings, and reshuffling into higher paid roles.

Labor activists have long had a $15 wage as a goal, especially in service-sector industries like food service and retail. “Nine years later, we’ve made huge strides, and now we’re seeing wages on the rise for some restaurant and grocery workers,” Jamila Allen, a worker at Freddy’s Frozen Custard and Steakburgers in Durham, North Carolina, and a leader in the Fight for $15 and a Union, said in a statement to Insider.

The following chart shows just how much wages have changed during the pandemic for non-supervisory restaurant and grocery workers:

As seen in the chart, average hourly earnings for supermarket and other grocery store workers have gone up from $14.06 in February 2020 to $15.04 in June 2021, just passing $15. For restaurant workers, average earnings have increased from $13.86 in February 2020 to $15.31 in June 2021, passing the $15 mark in May 2021.

The data comes just months after Democrats failed to pass a $15 minimum wage in President Joe Biden’s American Rescue Plan, with eight Democrats voting against the inclusion of the wage hike. The federal minimum wage, which has remained unchanged since 2009, is just $7.25 an hour.

Meanwhile, a slew of businesses have raised their wages to be around – or above – $15 an hour. Most recently, CVS said it will be raising its minimum wage to $15 an hour by July 2022. Those wage raises at big chains don’t just impact their own workers: Big business raising wages can also raise pay for workers in the surrounding area, according to a March working paper.

An important distinction, though, is that the average wage doesn’t capture all workers. As the Washington Post notes, half of workers in those industries are still making below that figure. And recent research found that a $15 minimum wage still isn’t a living wage for many families.

America has a wage growth shortage, not a labor shortage

Experts like Heidi Shierholz, the director of policy at EPI, say that hiring shows the labor is there – so the shortage is more one of wage growth. Shierholz previously told Insider that raising the minimum wage could help solve labor market tightness.

“With major employers like Chipotle and McDonald’s and Walmart all raising their wages, that signals that they believe that they’re going to face a long-term challenge in attracting workers because they wouldn’t be bumping up wages if they didn’t believe that this is going to be a long-term issue,” Daniel Zhao, senior economist at Glassdoor, told Insider.

Allen said that Fight for $15 and a Union is still “keeping pressure” on the Senate to take action on the federal minimum.

“We’re fighting for a society where every worker in every community can thrive, and right now millions of Black and brown workers are being left behind, especially in the Midwest and here in the South.”

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$15 an hour isn’t nearly enough to cover the average American’s annual expenses, according to a new report

McDonald's workers striking Fight for $15
A $15 minimum wage still wouldn’t be enough to support the average American, a recent analysis found.

Though calls for a $15-an-hour minimum wage have gained steam in Congress and major companies have raised their starting pay to that level, it still isn’t enough to support the average American family, according to a recent analysis by USA Facts.

Someone making $15 an hour would have to work 8-hour shifts, 5 days a week, for 2 years to make what the average American family spends annually, the analysis found. The study defined the average American family as the middle 20% of income earners and based its analysis on data from different federal agencies.

The current federal minimum wage – $7.25 an hour – hasn’t been raised in over a decade, and a proposal to raise it to $15 was cut from the final version of the American Rescue Plan. A $15 minimum wage would raise wages for over 32 million workers and would benefit Black workers and women the most.

Ten states have already implemented a $15 minimum wage, though some states’ plans include gradually bumping up wages until they hit $15, meaning that residents in states like Delaware won’t be guaranteed $15 an hour until 2025.

Major companies like Costco, Target, and Amazon have touted their $15 minimum wage, but workers have found that it isn’t enough to live on. One Amazon warehouse worker making $19 an hour in New York City lived in her car since 2019 because she couldn’t afford rent on an apartment.

But $15 an hour isn’t even enough in states with a low cost of living. The report found that in Mississippi, a state with one of the lowest costs of living, a person would have to work 73 work weeks to earn as much as the average Mississippi family spends in a year.

“It is a nationwide truth that a $15 an hourly minimum wage would not be enough for a single-income-earner household to cover the average family’s annual expenses,” the report said.

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Starbucks is giving baristas a raise and increasing minimum wage to $12 in US stores in October

barista writing on coffee
  • Starbucks is raising wages for baristas and increasing the minimum wage.
  • Starbucks moved up the timeline for raises from January to October.
  • Chipotle and McDonald’s recently raised wages to attract workers in the labor shortage.
  • See more stories on Insider’s business page.

Starbucks will give hourly workers a raise this October, and raise the minimum wage to at least $12 in all stores.

Employees hired before July 2021 will receive a 5% raise, with tenured partners getting a 6% raise. Starbucks will also raise the minimum wage in all markets to at least $12, and up to or above $15 in some markets, a Starbucks spokesperson told Insider.

Starbucks previously gave US workers raises in December 2020, with an increase of at least 10% for all baristas, supervisors, and cafe attendants, Kate Taylor reported for Insider. The coffee chain also bumped starting wages by 5% and increased the amount that Starbucks pays over the local minimum wage in all markets. More than half of Starbucks workers already make $15 or more, Starbucks confirmed.

At the time, Rossann Williams, the president of Starbucks’ company-owned US stores called the move “one of the most substantial investments in pay in our company’s history.”

Read more: Strikes, mass quitting, and rage: We talked to workers who were fed up with terrible conditions and are fighting back

The upcoming October raises are accelerated plans originally intended for January 2022. They’re part of a plan to reach a minimum wage of $15 for all workers in the next two to three years, the spokesperson said.

Workers have left the retail industry this year to escape difficult customers and low pay. Dozens of customer-facing retail workers have told Insider about quitting their jobs over fatigue, harassment from customers, and fear of contracting COVID-19.

Difficulty staffing stores has led fast-food chains to raise wages for workers. In May, Chipotle announced it was increasing hourly wages, bringing the average pay up to about $15 an hour. That’s $2 more an hour than the chain’s current average of $13 an hour, Chipotle told Insider.

Increasing wages helped Chipotle deal with the labor shortage. The chain told Insider it received over 24,000 applications for 20,000 positions a week after it announced higher wages. McDonald’s also raised wages by about 10% in company-owned stores, and the chain says it’s nearly back to being fully staffed, Juliana Kaplan reported for Insider.

Other chains have held hiring events, added extra benefits, and given out bonuses for interviewing.

Do you have a story to share about a retail or restaurant chain? Email this reporter at mmeisenzahl@businessinsider.com.

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If the minimum wage were $24 an hour and tied to worker productivity, a long-held trickle-down myth might actually come true.

Fair Wage Demonstration Hiring Washington DC
Activists participate in a “Wage Strike” demonstration in May in Washington, DC.

  • Paul Constant is a writer at Civic Ventures and cohost of the “Pitchfork Economics” podcast.
  • In his latest piece, he discusses the recent 12th anniversary of the last federal minimum wage raise to $7.25.
  • Constant says if the minimum wage were tied to increases in worker productivity, it’d currently be at $24 an hour.
  • See more stories on Insider’s business page.

Saturday, July 24, was the 12th anniversary of the last time the federal minimum wage increased, to $7.25 an hour. This is, by far, the longest the nation has gone without an increase to the federal minimum wage since the labor law was first instituted in 1938. While many states and cities have long since raised their minimum wage to more than double the federal standard, $7.25 is still the wage for hundreds of thousands of workers in 20 states around the country.

While the federal minimum wage has stayed frozen in time for the last dozen years, prices have continued to increase. Economist Ben Zipperer reports that anyone who is “paid the federal minimum of $7.25 today effectively earns 21% less than what their counterpart earned 12 years ago, after adjusting for inflation.”

At this point, the $7.25 minimum wage is a national embarrassment.

For decades, opponents claimed that raising the wage would kill jobs, close businesses, and move industries to states with a lower wage. But in cities like Seattle, where the minimum wage is now $16.69 per hour, those claims have been roundly disproven.

Study after study has shown that raising the wage doesn’t kill jobs, raise prices, or shutter businesses because when workers have more money, they spend that money in local businesses, which then hire more workers to meet the increased demand.(You can find links to all those studies in a piece I wrote back in February debunking the five most common minimum wage myths.) Raising the wage is a no-brainer, but our lawmakers haven’t found the political courage to act on it through years of Democratic and Republican leadership alike.

The one truly unanswered question that remains with the minimum wage is what standard should be used to determine the wage moving forward. A listener of the “Pitchfork Economics” podcast recently called in to ask why the minimum wage isn’t tied to cost of living, for instance. Such a policy would have prevented the 21% decline in real spending power that minimum-wage workers are confronting right now.

As the system currently stands, opponents of minimum-wage increases only have to stall the legislative process to erode the strength and importance of the law, as these past twelve years of Congressional inaction have proven. It would make sense to peg the minimum wage to some sort of metric so it increases annually without any intervention from lawmakers.

Many states and cities around the country do this. My home state of Washington, for instance, pegs the minimum wage to inflation, so in January of this year the statewide minimum wage automatically ticked up from $13.50 to $13.69.

You could also argue that the minimum wage should be tied directly to worker productivity.

Virtually every Econ 101 class teaches the trickle-down myth that workers are paid what they are worth, and locking the minimum wage into national productivity numbers would be a way to finally ensure that claim is true.

This is the figure that would do the most for American workers. As a recent Economic Policy Institute paper found, productivity has increased by over 72% from 1979 to 2019, while worker pay has only increased by 17%. The minimum wage largely rose in lockstep with American worker productivity gains for its first three decades. But had the minimum wage kept pace with productivity increases since 1968, the federal minimum wage would be more than $24 per hour right now, according to the Center for Economic and Policy Research.

If we have learned nothing else from this shameful freezing of the federal minimum wage, it should be that the minimum wage is more than a number. No American should put in 40 hours of work only to find themselves trapped below the poverty line. Tying the figure to some kind of metric – be it cost of living, inflation, productivity, median worker pay, or something else entirely – is the only way to prevent 12 straight years of losses from happening to the American worker ever again.

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The average person earning minimum wage has to work 79 hours a week to afford a one-bedroom apartment

McDonald's fight for $15 wage
An employee of McDonald’s protests outside a branch restaurant for a raise in their minimum wage to $15 an hour, in Fort Lauderdale on May 19, 2021.

  • Rent is unaffordable for the average minimum-wage earner in the US, according to a recent report.
  • Though the Fight for $15 has gained traction, $15 an hour often isn’t enough to afford housing.
  • Low-wage workers will continue to struggle after the pandemic ends.

For the nation’s minimum-wage workers, even working two full-time jobs sometimes isn’t enough to afford rent, according to a new report from the National Low Income Housing Coalition.

The average minimum-wage worker would have to work 79 hours a week to afford a modest one-bedroom rental and 97 hours a week to afford a modest two-bedroom rental, hours that would be difficult for a single person and nearly impossible for single parents.

“People who work 97 hours per week and need 8 hours per day of sleep have around 2 hours per day left over for everything else – commuting, cooking, cleaning, self-care, caring for children and family, and serving their community,” the report stated. “Even for a one-bedroom rental, it is unreasonable to expect individuals to work 79 hours per week to afford their housing. For people who can work, one full-time job should be enough.”

The federal minimum wage is $7.25 an hour and hasn’t increased in over a decade. Though the Fight for $15 – a nationwide campaign to raise the minimum wage – has gained momentum with some major companies and states instituting $15 minimum wages, even a $15 hourly wage isn’t enough to lead a comfortable life.

According to the report, an individual would have to earn $20.40 an hour to afford the average modestly priced one-bedroom rental and $24.90 for a two-bedroom apartment, without spending more than 30% of their income on housing.

“Stable, affordable housing is a prerequisite for basic well-being, and no family should live in danger of losing their home,” the report stated.

In more expensive housing markets, workers must earn even more to afford rent. In New York state, where the average housing wage is $34.03 an hour, an Amazon employee making $19.30 an hour in New York City has lived in her car since 2019 because she can’t find affordable permanent housing.

Although wages overall jumped during the pandemic as businesses struggled to fill open positions, salaries for people already in the workforce didn’t go up. Even pre-pandemic economic conditions were difficult for low-wage workers, and the report predicts that workers will struggle even more now to pay off debt accumulated during the pandemic.

“Even if economic recovery is robust and sustained, low-wage workers will continue to struggle.”

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