As Minimum Wages Rise, Some Say Too Little, Too Late

Protesters demanding a raise on the minimum wage to $15 per hour in New York.
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Protesters demanding a raise on the minimum wage to $15 per hour in New York.

Twana Davenport was disappointed.

The San Francisco resident had been earning $12 an hour working as a home-health aide, and when the minimum wage went up by roughly $1.50 an hour, she had high hopes for a proportionate jump in her hourly rate. Instead, the agency she worked for bumped her up right in line with the new minimum.

"I'm just seeing a 25-cent raise. It's not really a difference," she said.

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In Los Angeles last week, labor advocates and lawmakers celebrated the city's vote to raise the minimum wage to $15 an hour by 2020. But in San Francisco, where the first wage hike towards a $15 minimum kicked in last month, the response from the working poor has been tempered by what is still a day-to-day struggle to make ends meet.

"It's expensive out here. A gallon of milk starts at $3.69," Davenport said. Although she works full-time to support herself and her 19-year-old son, Davenport gets food stamps and pays around $400 a month for subsidized housing. Still, she sometimes runs out of money between paychecks.

"Even if we do raise it to $15 an hour, people still can't afford to live in the city," said Barry Stenger, executive director of the St. Anthony Foundation in San Francisco. Stenger sees firsthand how the grinding reality of getting by in a gentrifying city takes a toll on its poorest residents. "We're not solving a problem — we're just underscoring the need for more work in the area."

"If you're working at the current minimum wage in a lot of places, you're still in poverty, especially if you're supporting other people," said Ruth Milkman, a sociologist of labor and labor movements at the City University of New York Graduate Center. "That's a reflection of the growth in inequality."

Gradual phase-in

Although the $15 minimums would bring these cities' wages up to more than double the federal minimum wage of $7.25 an hour, policymakers built in a gradual phase-in in each case to minimize the disruption to companies' balance sheets.

Economists who support raising the minimum wage tend to agree that such gradual steps are necessary, but the long lead time dangles the prospect of a living wage in front of low-wage workers years before they can actually attain it.

"Making sure wages align with affordability is a "moving target," Stenger said.

This can generate cynicism, as low-wage workers wonder if the prospect of financial relief will ever come.

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"What you're tapping into is a lot of discontent in a lot of the working population," Milkman said.

"It probably won't even be better because the more the minimum wage goes up, the more people raise prices," Davenport said.

Overall, economists say this isn't the case. "Low-wage employment does not constitute a big part of the cost that goes into the cost of living," said Gary Burtless, a labor economist at the Brookings Institution. "If the increase in the minimum wage is only moderate, then we're not really talking about a big effect on the U.S. price index," he said.

Businesses that depend on an army of low-wage workers are most likely to raise prices, Burtless said, and some of these — think fast-food restaurants — are the type of places that are highly visible and heavily visited in low-income neighborhoods, which could make higher prices following a minimum wage increase seem more prevalent than they are.

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What's more, the semantics of being a minimum-wage worker are demoralizing. "It's not fair that I have to wash behinds and clean up houses...and I get paid the same as a fast food [worker]," Davenport said.

"Like it or not, we link up the dignity of our work with the amount of money we make," Stenger said. "If I'm making the same amount of money that everybody doing the least, [most] menial job is making … that kind of defines my job as less than what it was."