The $15 minimum wage battle cry always rang hollow to me. I know, $15 sounds like a lot to people who grew up in the 1970s or 80s (the minimum wage was $3.35 when I got my first job. Come to think of it, this would be a fun first date question. Answers here.) That’s bad context, however — $15/hour is a $31,000 annual salary, and that’s assuming 52 weeks of full-time work. That’s….pathetic pay. It’s $2,683 a month (before taxes!). To be considered affordable, a person earning minimum wage and working full-time would have to find an apartment that costs about $800 a month, The *median* rent in America is $2,000, says Rent.com, and there is one state in our land with median rents under $900 — Mississippi. Where the minimum wage is $7,25 an hour, or $1,256 a month. A person working full-time, every week out of the year, with NO vacation days, would have to pay 75% of their rent to afford a median-priced apartment in Mississippi.
And we wonder why everyone is so angry.
But this isn’t even the problem I can here to tell you about. The more insidious problem is that — the 40-hour workweek is out of reach for many Americans. They often live week to week, sometimes getting 20 hours, sometimes 39, but never really knowing what will hit their bank account next Friday. This is a problem that government statisticians just haven’t figured out how to quantify yet, so it’s still invisible to many policymakers and our electorate in general. But it’s very real to people who work at places like Walmart, Target etc.
This situation is sometimes called “precarity” and I wrote about it extensively a few years ago as part of The Restless Project. It was highlighted in the 2017 book “The Financial Diaries.” Since then, things have only gotten worse. And while $15 an hour is a lovely slogan, it comes nowhere near solving the untenable position we have shoved much of America into — a hardworking person, with what feels like full-time job, cannot afford a decent place to live in nearly any American city. It’s a total breakdown of America’s social contract.
Adelle Waldman does a great job of putting flesh and bones onto these cold statistics when she writes about her new book, Help Wanted, in a recent New York Times opinion piece. For her book, Waldman took a job at a big box store in upstate New York. She arrived at 4 a.m. every day to unload delivery trucks — a race against time to put 1,500 to 2,500 boxes where they belonged, earning $12.25 an hour. Most of her co-workers had done this for years, but even the veterans would sometimes be scheduled for as few as four hours per week. But because they *might* get up to 39 hours the following week, they couldn’t really take a second job. Still, she was shocked to find how seriously they took the daily unloading assignments.
This is why I began today’s column with the quick $15 minimum wage lesson. What good is $15 an hour if you aren’t working 40 hours all the time? Waldman’s co-workers could be paid $25 an hour and it still wouldn’t bring them out of precarity; allow them to know they can pay rent, cover a car payment, and so on.
And I think this is what we are all missing through the fog of blue-state, red-state, big-tech misinformation: Things didn’t always work this way. Here are just two examples.
A few years ago, Salon magazine told the story of Rob Stanley, who moved out of his home as an adult teen-ager in 1965 and walked over to Interlake Steel, “where he was immediately hired to shovel taconite into the blast furnace on the midnight shift. It was the crummiest job in the mill, mindless grunt work, but it paid $2.32 an hour — enough for an apartment and a car.”
At about the same time, I was collecting real-life budgets from readers. Here’s one:
“Today, I don’t live nearly as well on $57.00 per hour as I once did on $14.65 (in 1987),” wrote one reader to me. “In 1987 my taxes were enough to drop my pay to about 11 dollars an hour, or around $440 a week take-home. My rent for a one-bedroom on a river in one of the nicest areas of Vancouver (Washington) was $195 a month. My electric bill was always under $40, even during the cold times. My car insurance was about $20 per month. My daycare for my son, before he went to school was $25 a week.”
Comparatively lower wages are certainly a big part of this story — Stanley’s salary today would be $17 an hour, Salon wrote. But he certainly couldn’t find an apartment with those wages. “Inflation” has become incredibly politicized in the past few months, but real inflation — housing inflation — has been ignored by both parties for decades. As I wrote recently, America is about 7 million homes short of having a fully functional housing market that compares with what Boomers grew up in during the 50s and 60s.
But corporations treating workers like cloud server space tops the list for the current epidemic of precarity. Part-time labor is the name of the game for many firms now — they want fully-staffed operations before the Christmas holiday but ghost towns when things are slow in February. That’s capitalism, sure. It’s also inhumane. But, I’ll bet you’ve already guessed, government statistics count these precarious workers as employed. So if you are curious why America is enjoying record-low unemployment, but people still seem to be pessimistic, this is a good place to start digging.
I don’t know about you, but I believe anyone who shows up at work every day at 4 a.m. to move boxes all day deserves a decent, safe place to live. Just to be bold here, let’s throw good enough schools and the occasional doctor’s visit into that compensation, too.
And if you are reading this story and thinking — “I work full-time and earn much more than minimum wage and I still can’t afford a home near decent schools!” that means you understand this problem is far, far deeper than a $15 minimum wage. The breakdown of the social contract reaches deep into what we once called the middle class now. Unless you inherited your home or hit the lottery ticket in real estate timing, there are few places in America where even a good full-time job is enough to buy a median-priced home in a good neighborhood.
The gap Americans experience between the idyllic world I just described and what we have now reveals how far we have strayed from our social contract. The road back is long and complicated. A GI-bill level investment in new housing would be the most important step. Worker rights are a close second, however. We must regain respect for hard work. Our reward system is deeply damaged. It’s far easier to make money with money than with labor, and if you fret that Americans don’t make anything any more, that’s why. Until this problem is fixed, the undercurrent of anger and frustration that we all seem to feel everywhere isn’t going anywhere.
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