Last month, Home Depot announced that it would begin paying all of its hourly employees at least $15 because, in the words of its CEO, “the most important investment we can make is in our people.”
Maryland Governor Wes Moore, a Democrat, is trying to speed up the timetable for his state to increase its minimum wage to $15 an hour, up from its present level of $13.25, because doing so, he has said, could be a “game-changer”—“the difference between struggle and stability” for a large number of working families.
In Pennsylvania, Democratic Governor Josh Shapiro is also pushing to get to $15 an hour. “Let’s treat workers with the respect they deserve,” he declared this month. The state’s current minimum wage is the same as the federal benchmark—just $7.25 an hour—a sum that Shapiro has said is “not a livable wage in the year 2023.”
That is unquestionably true. But here’s the thing: Neither is $15 a livable wage for the vast majority of Americans.
Although corporations and politicians continue to use $15 an hour as their go-to target for decent pay, we desperately need to raise the bar. We need to stop fighting for $15.
It is time to fight, instead, for $20.
As a movement, the Fight for $15—capital F—began in 2012 when the Service Employees International Union mobilized fast-food workers in New York City to walk off the job.
At the time, $15 seemed like an incredible reach. It “was a bold, morally aspirational demand,” says David Rolf, who as president of SEIU Local 775 helped to spearhead the passage in 2013 of the first $15 minimum wage in the country, in SeaTac, a suburb of Seattle. “Even most left-leaning economists thought we were crazy to talk about $15.”
In the decade since, crazy has given way to something of a consensus. By the end of this year, the National Employment Law Project notes, six states and 51 cities and counties will meet or exceed a $15 minimum hourly wage for some or all employees. What’s more, a host of large employers—Amazon, Starbucks, Best Buy, and Walgreens, among them—have pushed their minimum hourly pay to $15, a result of political pressure and a tight labor market.
The upshot is that about 85% of U.S. workers today make $15 an hour or more, according to the Economic Policy Institute. When the Fight for $15 was getting off the ground, fewer than 60% did.
Whether you consider that to be a success or think that 15% of U.S. workers still earning less than $15 is so bad as to be “astounding,” as the Economic Policy Institute recently put it, doesn’t really matter.
At this point, $15 is the wrong number to focus on. The average apartment rent is 36% higher than it was in 2012. The cost to a worker for family health coverage is 48% more.
“In most of the country,” says Rolf, “$15 an hour wasn’t enough to live on then, and it’s not enough anywhere in the country now.”
Nevertheless, $15 has become so seared in the public’s consciousness as something positive, we’ve lost sight of how little it actually is.
“Hourly expressions of income are deceiving as a measure of sufficiency,” says Jennifer Tescher, president of the Financial Health Network. “Most of us can’t do the math in our heads. If we could, we’d realize that $15 an hour amounts to only $31,200 a year, assuming full-time work—about half of the U.S. median income and a painfully small amount for living and raising children in most American cities.”
It can be painfully small outside of cities, too.
The nonprofit group Living Wage for US has calculated what it would take for someone to earn enough to support the typical-size working family—a standard that is in accord with international norms as well as the Biden administration’s call for “family-sustaining wages.”
Its formula takes into account the cost of housing, food, transportation, health insurance, out-of-pocket medical costs, taxes, retirement savings, childcare, and other necessities, along with a 5% cushion for unexpected events. By this yardstick, 90% of Americans reside in a county where, to make a family living wage, they need to earn at least $20 an hour.
Yet, some 36% of American workers fall short of the $20 threshold.
This gap goes a long way toward explaining why tens of millions of workers often face terrible choices between paying the rent, putting enough food on the table, and getting the medical care they need—trade-offs that have been only exacerbated by high inflation.
A jump to $20 an hour would need to be carefully implemented. Phasing it in over time, especially for smaller businesses, makes sense. But we can’t wait too long, or we’ll forever be playing catch-up. And once $20 is in place, it should be automatically adjusted upward to keep pace with the rising cost of living. (In some larger metropolitan areas, local officials need to lift the wage floor far higher than $20 as soon as possible.)
Of course, given the highly polarized partisan climate in Washington, it’s hard to see how the federal minimum wage could ever get to $20, no matter how smartly crafted the policy is. After all, $15 has proven unattainable, as has the $10.10 and $12 an hour proposed in Congress over the years; we’ve been stuck at $7.25 since 2009.
But this may be one of those issues that is ready to break out. People of all political stripes are frustrated by stagnating wages. Polling by JUST Capital indicates that large majorities of Democrats, Independents, and Republicans all believe that big companies, in particular, “have a responsibility to pay full-time adult workers in frontline jobs enough to make ends meet” and “enough so they don’t have to rely on public assistance.”
Even in red states, such as Florida and Nebraska, voters have approved minimum wage increases. As Politico has reported, all this is giving hope to some “liberal lawmakers and progressive activists” that they can begin to rally around $20 an hour.
However, as long as $15 remains the guiding star for most, we’re doomed to be, as California Representative Katie Porter likes to say, “solving yesterday’s problems tomorrow—maybe.”
Rick Wartzman is the copresident of Bendable Labs, a technology, consulting, and research firm that specializes in the areas of lifelong learning, workforce development, and job quality. His most recent book is Still Broke: Walmart’s Remarkable Transformation and the Limits of Socially Conscious Capitalism.
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