Is $15 enough?

The last few years have been witness to an explosion of grassroots labour organising focused on improving conditions for retail, fast food, and other service workers. This is a huge step in a country where workers in general have to fight for every inch of respect they receive, and where unions are struggling against the companies determined to keep them out. While industries like steelworking remain strongholds of union power, the same doesn’t hold true for the service industry — and that makes the fight for protections an industry-wide struggle even as workers engage in labour organising.

One of the cornerstones of organising has been the fight for $15, pushing individual municipalities as well as the federal government to a higher minimum wage. The pressure reflects the fact that the minimum wage has not kept pace with inflation or been appropriately adjusted over the decades, and living in the United States is an extremely expensive prospect. Whether a household is relying on one, two, or more incomes, minimum wage jobs are grueling — the low pay makes every day a struggle, it’s difficult to take time off, and it’s challenging to receive accommodations. Employers treat their employees like interchangeable low-wage cattle, refusing to acknowledge that they’re human beings.

But is $15 enough? This is a complicated question. I don’t fault organisers for picking this target, at all, because they needed a specific number, and they knew that aiming too high could result in failure. Pick a more reasonable rate of pay and people will laugh you off the field, compromise at too low a rate and you won’t accomplish anything. Finding a happy medium is extremely challenging, especially when organisations you might think of as allies turn on you as you force through minimum wage laws.

So let’s take a look at what $15/hour actually looks like. You can judge for yourself whether you think it’s fair or not. We’ll assume that our hypothetical worker is employed for the standard 40 hours per week, works no additional jobs, and, in the interest of generosity, we’ll say she’s carrying no debt. (But she doesn’t get benefits through work, because very few service workers do.)

She’s taking home $600 a week before taxes, or $31,200 annually. That’s assuming she takes no vacation or sick days, or that her company provides paid days as a benefit (they usually don’t). She’s filing taxes as a single person, making her federal income tax liability $4,230. She lives in California, so she also owes $847 in state tax. That means $26,123 in annual take-home. Please note that these numbers are highly simplified — she may qualify for credits, rebates, or other tax assistance, so she’s probably not paying this much. At this rate, she’s living on $2,177 each month.

If she lives in San Francisco, she’s already in trouble. Average rent for a one bedroom is more than she earns a month. She’s facing similarly tough odds in Los Angeles, New York, and Chicago. But if she lives in Atlanta or Austin, she’ll only be spending about half her income on rent. Don’t tell her to move to Portland for affordable housing — the trendy Oregon city’s average rent is around $1,300 a month at the moment. In most urban areas, our inteprid barista couldn’t afford to rent a home on her own. In fact, when averaged overall, rents in the US are around $1,000/month. Of course, this includes affordable rural communities alongside SoMa lofts, so it should be taken with a grain of salt, but it’s not unreasonable to expect that she’ll pay more than 3o percent of her monthly income in rent, which goes against financial planning recommendations.

Depending on where she lives, she’ll be spending between $79 (Maine) or nearly $200 (Hawaii) on utilities every month. According to Gallup, her food budget is likely around $150 per week — a very small percentage of people spends less than $50, though, and she might be among them. In case you’re wondering, she’s not eligible for nutrition assistance and likely won’t qualify for other programmes to help with utilities and other household expenses. Since she’s required to buy health insurance under the ACA, she may be spending $300 or more even on a basic plan (that comes with a high deductible and out of pocket expenses, so hopefully she’s healthy!). If she’s in a state that offers them, she may get benefits or employer support…but she might not be.

At this point, living on minimum wage is already functionally impossible. Our theoretical worker cannot make enough money to pay her rent, manage her utilities, buy food, and cover the health insurance mandate. If she’s carrying debt, she won’t be able to service it. If she’s supporting family members, she won’t be able to provide financial assistance. She can’t afford to save money or go to college. She may be able to cut expenses by living with a roommate — or being in a relationship — but she’s likely still on a shoestring budget.

If she has any kind of expense beyond that — car insurance, replacing torn and worn-out sheets, buying a new uniform for work, paying for expensive makeup she’s required to wear to present a ‘neat’ personal appearance, paying for a monthly transit pass, or anything else related to basic costs of living, she’s out of luck. She has to budget every cent to pay for these kinds of expenses, and anything unexpected can be a crushing blow. Maybe she goes out for a credit card to deal with that problem, and ends up in even deeper trouble.

She also hasn’t had an opportunity to do anything fun. She doesn’t go to a single movie. She never buys books (good thing she has a robust local library with good state and federal funding, right?). She doesn’t go out to eat, ever. She never sees plays, goes to concerts, or buys art.

So what do you think. Is $15 enough?

Image: Minimum wage protest, Toby Scott, Flickr