What Life on Minimum Wage Actually Looks Like in 2016

Peter Van Buren February 26, 2016

In 2016, a minimum wage worker is fighting against basic math to work the hours needed to live above the poverty line.

This post first appeared at TomDispatch.

When pres­i­den­tial can­di­date Bernie Sanders talks about income inequal­i­ty, and when oth­er can­di­dates speak about the min­i­mum wage and food stamps, what are they real­ly talk­ing about?

Whether they know it or not, it’s some­thing like this.

My work­ing life then

A few years ago, I wrote about my expe­ri­ence enmeshed in the min­i­mum-wage econ­o­my, chron­i­cling the col­lapse of good peo­ple who could not earn enough mon­ey, often work­ing 60-plus hours a week at mul­ti­ple jobs, to feed their fam­i­lies. I saw that, in this coun­try, peo­ple try­ing to make ends meet in such a fash­ion still had to resort to food ben­e­fit pro­grams and char­i­ty. I saw an employ­ee fired for steal­ing lunch­es from the break room refrig­er­a­tor to feed him­self. I watched as a co-work­er secret­ly brought her two kids into the store and left them to wan­der alone for hours because she couldn’t afford child­care. (As it hap­pens, 29% of low-wage employ­ees are sin­gle parents.)

At that point, hav­ing worked at the State Depart­ment for 24 years, I had been boot­ed out for being a whistle­blow­er. I wasn’t sure what would hap­pen to me next and so took a series of min­i­mum wage jobs. Find­ing myself plunged into the low-wage econ­o­my was a sober­ing, even fright­en­ing, expe­ri­ence that made me real­ize just how igno­rant I had been about the lives of the peo­ple who rang me up at stores or served me food in restau­rants. Though mil­lions of adults work for min­i­mum wage, until I did it myself I knew noth­ing about what that involved, which meant I knew next to noth­ing about twen­ty-first-cen­tu­ry America.

I was lucky. I didn’t become one of those mil­lions of peo­ple trapped as the work­ing poor.” I made it out. But with all the elec­tion talk about the econ­o­my, I decid­ed it was time to go back and take anoth­er look at where I had been, and where too many oth­ers still are.

My work­ing life now

I found things were pret­ty much the same in 2016 as they were in 2012, which meant – because there was no real improve­ment – that things were actu­al­ly worse.

This time around, I worked for a month and a half at a nation­al retail chain in New York City. While mine was hard­ly a sci­en­tif­ic exper­i­ment, I’d be will­ing to bet an hour of my min­i­mum-wage salary ($9 before tax­es) that what fol­lows is pret­ty typ­i­cal of the New Economy.

Just get­ting hired was­n’t easy for this 56-year-old guy. To become a sales clerk, ped­dling items that were gen­er­al­ly well under $50 a pop, I need­ed two pre­vi­ous employ­ment ref­er­ences and I had to pass a cred­it check. Unlike some low-wage jobs, a manda­to­ry drug test wasn’t part of the process, but there was a crim­i­nal back­ground check and I was told drug offens­es would dis­qual­i­fy me. I was giv­en an exam twice, by two dif­fer­ent man­agers, designed to see how I’d respond to var­i­ous cus­tomer sit­u­a­tions. In oth­er words, any­one with­out some edu­ca­tion, good Eng­lish, a decent work his­to­ry, and a clean record would­n’t even qual­i­fy for min­i­mum-wage mon­ey at this chain.

And believe me, I earned that mon­ey. Any shift under six hours involved only a 15-minute break (which cost the com­pa­ny just $2.25). Trust me, at my age, after hours stand­ing, I need­ed that break and I was­n’t even the old­est or least fit employ­ee. After six hours, you did get a 45-minute break, but were only paid for 15 min­utes of it.

The hard­est part of the job remained deal­ing with… well, some of you. Cus­tomers felt enti­tled to raise their voic­es, use pro­fan­i­ty, and com­mit Trumpian acts of rude­ness toward my fel­low employ­ees and me. Most of our val­ued guests” would nev­er act that way in oth­er pub­lic sit­u­a­tions or with their own cowork­ers, no less friends. But inside that store, shop­pers seemed to inter­pret the cus­tomer is always right” to mean that they could do any damn thing they wished. It often felt as if we were penned ani­mals who could be poked with a stick for sport, and with­out penal­ty. No mat­ter what was said or done, store man­age­ment tol­er­at­ed no response from us oth­er than a smile and a Yes, sir” (or ma’am).

The store showed no more mer­cy in its treat­ment of work­ers than did the cus­tomers. My sched­ule, for instance, changed con­stant­ly. There was sim­ply no way to plan things more than a week in advance. (For­get accept­ing a par­ty invi­ta­tion. I’m talk­ing about child­care and med­ical appoint­ments.) If you were on the clos­ing shift, you stayed until the man­ag­er agreed that the store was clean enough for you to go home. You nev­er quite knew when work was going to be over and no cell phone calls were allowed to alert babysit­ters of any delay.

And keep in mind that I was lucky. I was hold­ing down only one job in one store. Most of my fel­low work­ers were try­ing to jug­gle two or three jobs, each with con­stant­ly chang­ing sched­ules, in order to stitch togeth­er some­thing like a half-decent paycheck.

In New York City, that store was required to give us sick leave only after we’d worked there for a full year – and that was gen­er­ous com­pared to prac­tices in many oth­er locales. Until then, you either went to work sick or stayed home unpaid. Unlike New York, most states do not require such a store to offer any sick leave, ever, to employ­ees who work less than 40 hours a week. Think about that the next time your wait­ress coughs.

Min­i­mum wages and min­i­mum hours

Much is said these days about rais­ing the min­i­mum wage (and it should be raised), and indeed, on Jan­u­ary 1, 2016, 13 states did raise theirs. But what sounds like good news is unlike­ly to have much effect on the work­ing poor.

In New York, for instance, the min­i­mum went from $8.75 an hour to the $9.00 I was mak­ing. New York is rel­a­tive­ly gen­er­ous. The cur­rent fed­er­al min­i­mum wage is $7.25 and 21 states require only that fed­er­al stan­dard. Pre­sum­ably to prove some grim point or oth­er, Geor­gia and Wyoming offi­cial­ly man­date an even low­er min­i­mum wage and then unof­fi­cial­ly require the pay­ment of $7.25 to avoid Depart­ment of Labor penal­ties. Some South­ern states set no base­ment fig­ure, pre­sum­ably for sim­i­lar reasons.

Don’t for­get: any min­i­mum wage fig­ure men­tioned is before tax­es. Brack­ets vary, but let’s knock an even 10% off that hourly wage just as a rea­son­able guess about what is tak­en out of a min­i­mum-wage work­er’s salary. And there are expens­es to con­sid­er, too. My round-trip bus fare every day, for instance, was $5.50. That meant I worked most of my first hour for bus fare and tax­es. Keep in mind that some work­ers have to pay for child­care as well, which means that it’s not impos­si­ble to imag­ine a sce­nario in which some­one could actu­al­ly come close to los­ing mon­ey by going to work for short shifts at min­i­mum wage.

In addi­tion to the fun­da­men­tal prob­lem of sim­ply not pay­ing peo­ple enough, there’s the addi­tion­al prob­lem of not giv­ing them enough hours to work. The two unfor­tu­nate­ly go togeth­er, which means that rais­ing the min­i­mum rate is only part of any solu­tion to improv­ing life in the low-wage world.

At the store where I worked for min­i­mum wage a few years ago, for instance, hours were capped at 39 a week. The com­pa­ny did that as a way to avoid pro­vid­ing the ben­e­fits that would kick in once one became a full time” employ­ee. Things have changed since 2012 – and not for the better.

Four years lat­er, the hours of most min­i­mum-wage work­ers are capped at 29. That’s the thresh­old after which most com­pa­nies with 50 or more employ­ees are required to pay into the Afford­able Care Act (Oba­macare) fund on behalf of their work­ers. Of course, some min­i­mum wage work­ers get few­er than 29 hours for rea­sons spe­cif­ic to the busi­ness­es they work for.

It’s math time

While a lot of num­bers fol­low, remem­ber that they all add up to a pic­ture of how peo­ple around us are liv­ing every day.

In New York, under the old min­i­mum wage sys­tem, $8.75 mul­ti­plied by 39 hours equaled $341.25 a week before tax­es. Under the new min­i­mum wage, $9.00 times 29 hours equals $261 a week. At a cap of 29 hours, the min­i­mum wage would have to be raised to $11.77 just to get many work­ers back to the same lev­el of take-home pay that I got in 2012, giv­en the drop in hours due to the Afford­able Care Act. Health insur­ance is impor­tant, but so is food.

In oth­er words, a rise in the min­i­mum wage is only half the bat­tle; employ­ees need enough hours of work to make a living.

About food: if a min­i­mum wage work­er in New York man­ages to work two jobs (to reach 40 hours a week) with­out miss­ing any days due to ill­ness, his or her year­ly salary would be $18,720. In oth­er words, it would fall well below the Fed­er­al Pover­ty Line of $21,775. That’s food stamp ter­ri­to­ry. To get above the pover­ty line with a 40-hour week, the min­i­mum wage would need to go above $10. At 29 hours a week, it would need to make it to $15 an hour. Right now, the high­est min­i­mum wage at a state lev­el is in the Dis­trict of Colum­bia at $11.50. As of now, no state is slat­ed to go high­er than that before 2018. (Some cities do set their own high­er min­i­mum wages.)

So add it up: The idea of rais­ing the min­i­mum wage (“the fight for $15”) is great, but even with that $15 in such hours-restric­tive cir­cum­stances, you can’t make a loaf of bread out of a small hand­ful of crumbs. In short, no mat­ter how you do the math, it’s near­ly impos­si­ble to feed your­self, nev­er mind a fam­i­ly, on the min­i­mum wage. It’s like being trapped on an M.C. Esch­er staircase.

The fed­er­al min­i­mum wage hit its high point in 1968 at $8.54 in today’s dol­lars and while this coun­try has been a par­adise in the ensu­ing decades for what we now call the One Per­cent,” it’s been down­hill for low-wage work­ers ever since. In fact, since it was last raised in 2009 at the fed­er­al lev­el to $7.25 per hour, the min­i­mum has lost about 8.1% of its pur­chas­ing pow­er to infla­tion. In oth­er words, min­i­mum-wage work­ers actu­al­ly make less now than they did in 1968, when most of them were prob­a­bly kids earn­ing pock­et mon­ey and not adults feed­ing their own children.

In adjust­ed dol­lars, the min­i­mum wage peaked when the Bea­t­les were still togeth­er and the Viet­nam War raged.

Who pays?

Many of the argu­ments against rais­ing the min­i­mum wage focus on the pos­si­bil­i­ty that doing so would put small busi­ness­es in the red. This is disin­gen­u­ous indeed, since 20 mega-com­pa­nies dom­i­nate the min­i­mum-wage world. Wal­mart alone employs 1.4 mil­lion min­i­mum-wage work­ers; Yum Brands (Taco Bell, Piz­za Hut, KFC) is in sec­ond place; and McDon­ald’s takes third. Over­all, 60% of min­i­mum-wage work­ers are employed by busi­ness­es not offi­cial­ly con­sid­ered small” by gov­ern­ment stan­dards, and of course carve-outs for real­ly small busi­ness­es are pos­si­ble, as was done with Obamacare.

Keep in mind that not rais­ing wages costs you money.

Those min­i­mum wage work­ers who can’t make enough and need to go on food assis­tance? Well, Wal­mart isn’t pay­ing for those food stamps (now called SNAP), you are. The annu­al bill that states and the fed­er­al gov­ern­ment foot for work­ing fam­i­lies mak­ing pover­ty-lev­el wages is $153 bil­lion. A sin­gle Wal­mart Super­center costs tax­pay­ers between $904,542 and $1.75 mil­lion per year in pub­lic assis­tance mon­ey, and Wal­mart employ­ees account for 18% of all food stamps issued. In oth­er words, those every­day low prices at the chain are, in part, sub­si­dized by your tax money.

If the min­i­mum wage goes up, will spend­ing on food ben­e­fits pro­grams go down? Almost cer­tain­ly. But won’t stores raise prices to com­pen­sate for the extra mon­ey they will be shelling out for wages? Pos­si­bly. But don’t wor­ry – rais­ing the min­i­mum wage to $15 an hour would mean a Big Mac would cost all of 17 cents more.

Time theft

My retail job end­ed a lit­tle ear­li­er than I had planned, because I com­mit­ted time theft.

You prob­a­bly don’t even know what time theft is. It may sound like some­thing from a sci-fi nov­el, but min­i­mum-wage employ­ers take time theft seri­ous­ly. The basic idea is sim­ple enough: if they’re pay­ing you, you’d bet­ter be work­ing. While the con­cept is not invalid per se, the way it’s used by the mega-com­pa­nies reveals much about how the low­est wage work­ers are seen by their employ­ers in 2016.

The prob­lem at my chain store was that its in-store café was a lot clos­er to my work area than the time clock where I had to punch out when­ev­er I was going on a sched­uled break. One day, when break time on my shift came around, I only had 15 min­utes. So I decid­ed to walk over to that café, order a cup of cof­fee, and then head for the place where I could punch out and sit down (on a dif­fer­ent floor at the oth­er end of the store).

We’re talk­ing an extra minute or two, no more, but in such oper­a­tions every minute is tab­u­lat­ed and account­ed for. As it hap­pened, a man­ag­er saw me and stepped in to tell the café clerk to can­cel my order. Then, in front of who­ev­er hap­pened to be around, she accused me of com­mit­ting time theft – that is, of order­ing on the clock. We’re talk­ing about the time it takes to say, Grande, milk, no sug­ar, please.” But no mat­ter, and get­ting chas­tised on com­pa­ny time was con­sid­ered part of the job, so the five min­utes we stood there count­ed as paid work.

At $9 an hour, my per-minute pay rate was 15 cents, which meant that I had time-stolen per­haps 30 cents. I was, that is, being nick­el and dimed to death.

Eco­nom­ics is about people

It seems wrong in a soci­ety as wealthy as ours that a per­son work­ing full-time can’t get above the pover­ty line. It seems no less wrong that some­one who is will­ing to work for the low­est wage legal­ly payable must also give up so much of his or her self-respect and dig­ni­ty as a kind of tar­iff. Hold­ing a job should not be a test of how to man­age life as one of the work­ing poor.

I did­n’t actu­al­ly get fired for my time theft. Instead, I quit on the spot. What­ev­er the price is for my sense of self-worth, it isn’t 30 cents. Unlike most of this country’s work­ing poor, I could afford to make such a deci­sion. My life did­n’t depend on it. When the man­ag­er told a hand­ful of my cowork­ers watch­ing the scene to get back to work, they did. They could­n’t afford not to.

Peter Van Buren is a reg­u­lar con­trib­u­tor at Tom Dis­patch. He also writes about cur­rent events on his blog, We Meant Well.
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