WHEN A SOCIAL MEDIA FRIEND shared an advertisement for a one-room, one-bath rental in a county on the southwest coast the other day, she got 84 responses. The ad featured a photograph of a room with four white walls, a white ceiling and a ceiling fan. The bold-faced words said, “Private Room/Bathroom, $950 a month, 1,060 square feet.” In fact, the apartment that contains the room is 1,060 square feet, not the room. That’s only a second small bedroom. “Looks like I’ll have to sign a lease that takes my entire Social Security check,” one man wrote.
“A nurse from Ohio who was hired for a job in healthcare down here… can’t take it because she can’t afford to live here,” the woman wrote.
“It’s crazy,” another concluded, echoing the thoughts of many.
What may be crazier are the complex economics — and therefore both the politics and ethics — of paying working people a wage for one full-time job that allows them to meet basic living expenses, including food, shelter that consists of more than a room, transportation and health care, without falling into poverty.
“It doesn’t matter what we do, we still don’t make a enough to live,” says Joey Holz, an activist on the southwest coast who promotes living wages for working people anywhere in Florida (website: www.mohawkjoey.com). “Food security, health security, shelter security. Period. If you’re providing me with those three things for my work, then there’s no issue. Those are basic human rights that every human being deserves, regardless of ability or disability. There’s no exception. “Nothing is stopping business owners from paying more,” he insists. “People who pay above minimum wage and treat employees right are not having staffing issues.”
That opinion echoes the thoughts of many economists and business analysts, not to mention some business owners. But who is obligated to pay a living wage or even a minimum wage? How hard would paying it be on business owners? And what is a basic “living wage” in a nation that also defines so-called poverty-level incomes — incomes on which people live “above the poverty line” or “below the poverty line?”
Nowadays, a mandatory federal minimum wage of $7.25 per hour dating from 2009 has been exceeded by significantly higher mandatory minimum wages in 29 states, including Florida, where the 2022 minimum is $10 per hour. And many businesses are paying more than that to retain good workers.
Legislators now meeting in Tallahassee for the 2022 session that wraps up March 11 are wrestling with a voter-approved constitutional amendment to establish a minimum wage for all Florida workers of $15 an hour by 2026 — wrestling in part because one senator, Republican Jeff Brandes from District 24 in Pinellas County, has proposed a bill that would allow some businesses to pay less than that, with a standard he defines as a “training wage.”
The term “living wage” was first used officially by President Franklin D. Roosevelt in 1933, and adopted again starting almost two decades ago by economist Amy Glasmeier, who created the “Living Wage Calculator,” a tool subsequently updated for states and even counties each year.
The United States had just passed the National Industrial Recovery Act when Roosevelt declared that “no business which depends for existence on paying less than living wages to its workers has any right to continue in this country.
“By ‘business’ I mean the whole of commerce as well as the whole of industry,” the president said. “By workers I mean all workers, the white-collar class as well as the men in overalls; and by living wages I mean more than a bare subsistence level — I mean the wages of decent living,” When Ms. Glasmeier adopted the term almost 70 years later and designed the Calculator in the early 2000s, “There had just been a recession, so the Living Wage Calculator was used by policymakers to make decisions about benefits, rules and supports for workers,” she said in a telephone conversation with Florida Weekly.
“But today it’s used by large corporations asking what they can do in a market where people have choices they didn’t before, where other employers may be offering better benefits and pay.”
Now a professor of Economic Geography and Regional Planning, Ms. Glasmeier is in the Department of Urban Studies and Planning in the Architecture School at the Massachusetts Institute of Technology (MIT). She also is author of several books, including “An Atlas of Poverty in America: One Nation, Pulling Apart, 1960-2003.”
“At the same time,” she explained, “there is a social-responsibility movement in the business world, and it’s becoming more important for customers deciding whom they spend money with. That’s not inconsequential — it affects everything from the biggest retail stores, selling things like building materials and low-cost foods, to investment advisors who own portfolios of stocks. So, things are changing for organizations front and center in the eyes of the public. And that can be true even for small-scale organizations.”
Americans and Floridians, nevertheless, are a long way from FDR’s prescription.
The federal poverty line for a family of four last year was $26,500, but “federal state and local poverty rate data are deeply flawed because they use the same poverty level income threshold for the entire country,” explains Dean Stansel, an economist at the Bridwell Institute for Economic Freedom at Southern Methodist University’s Cox School of Business, formerly an economics professor at Florida Gulf Coast University.
“Having a single poverty threshold for the entire country when cost of living can vary so widely across states and localities makes it difficult to produce a comparable measure of poverty conditions across disparate geographic areas.”
But under any conditions anywhere, a minimum wage of $15 for somebody working 2,080 hours or 40 hours a week for 52 weeks would be $31,200.
The Living Wage Calculator, defining the idea as an “hourly rate that an individual must earn to support their family, if they are the sole provider and are working full-time (2,080 hours per year),” establishes an entirely different minimum for each county.
In Palm Beach County last year, for example, one adult with one child needed $33.61 per hour for a living wage. The poverty-line wage for such a person was $8.29 and the minimum wage was $8.56.
On the other side of the state, in Collier County, one adult with one dependent needed $32.23 per hour, according to the calculator. In Lee County, it was $30.49 per hour and in Charlotte County, $29.55 per hour.
That living wage estimate in the counties is based on the following calculations, as of 2021: for food in Palm Beach County: $4,670; child care, $10,034; medical, $9,421; housing, $18,072; transportation, $9,378; civic, $3,889; other, $4,687. A realistic minimum required annual income for such a person working 40-hour weeks for a year, therefore, would be $60,152. In Collier County, a living annual wage would be $57,692; in Lee, $54,575; and in Charlotte County, $52,883.
With two children in Palm Beach County, that required annual income after taxes becomes $74,611. And with three children, the living wage becomes $97,402.
Minimum wage and the market
The effect on small businesses of workers wanting those living wages could be significant, many insist, especially as they compete for employees who are both capable and loyal. “Companies started to realize,” says Ms. Glasmeier, “Americans are smarter and being paid more (than the minimums). “Almost all working Americans have high school educations. People working for these companies can be intensely loyal, if they’re treated well. So employers are a lot more focused on being better employers. Because people will leave for 25 cents an hour more.”
The so-called market may be a correction toward justice, therefore, if justice is defined as people at any skill level getting paid enough to live, at least, without other help.
“Currently most wages in fast food places or what you consider minimum wage jobs are above the minimum wage,” says William Bosshardt, professor and director of the Center for Economic Education at Florida Atlantic University. “Those employers will have to continue to increase that to retrain workers. So the minimum wage is not really binding on businesses. I remind my students that $15 an hour used to be, not too long ago, something businesses loudly protested as too high. The fact that it is going up to $15 an hour is not a big burden.”
Even the notion of a minimum wage, however — a significantly different thing than a living wage — is suspect for some economists, including Dean Stansel, who describes any mandated minimum wage as “a blunt and ineffective instrument. “We can all agree that we should take steps to help those in need, but like the pandemic ‘stimulus checks’ Uncle Sam sent out, (the minimum wage) is poorly targeted, showering benefits on those who no one would describe as needy. Further, it makes it harder for low-skilled workers to get a job by making it more expensive for employers to hire them, encouraging employers to find other cheaper ways to get the job done — like self-service gas pumps, soda fountains, and checkout machines.”
Not only that, he adds, but “these same arguments against the minimum wage apply to calls for even higher ‘living wages.’ The dispute isn’t over whether or not there are people who are in need, but rather over how best to help them.”
He offers a sweeping and systemic alternative to mandated minimum wages. “There are many better ways to help low-skilled workers, such as the earned income tax credit, reducing occupational licensing restrictions, reducing restrictive housing regulations that raise housing costs, breaking up the public-school monopoly to give parents more choice and make students better prepared to join the workforce, reforming the criminal justice system, ending the drug war, and reducing banking regulations that make it harder for the poor to save, borrow, and invest.”
The working world
That big picture becomes more narrowly focused for working people like Jensen Desguin, a 21-year-old employee at Dick’s Sporting Goods in Charlotte County, who loves the job he started at $12.50 an hour and has already received two raises. Mr. Desguin plans to move up in the company, but he’ll need to make more to get out on his own — which is his plan. It’s a family effort, fortunately for him, he says. “I still live at home. I pay for my gas and health insurance, and I drive a 2016 Ford Fusion. I’m putting away money for an apartment down the road when I’m 23 or 24. Having my mom and dad here at home is helping.”
The idea of making $15 an hour right off the bat, “sounds really good. But at the same time I‘m thinking that if it goes up to $15, jobs might become more scarce for people trying to get their foot in the door. They might have to cut people just because of that.”
Keith Myer has a different view of that. The chef and owner of F.M. Don’s, an upscale Punta Gorda restaurant, he views both the minimum wage debate in the Florida legislature and the challenge of hiring and keeping exceptional staff through the eyes of a one-time finance major. After college, Mr. Myer worked on Wall Street for Morgan Stanley and Prudential, he recalls. Then he decided to change course, attending the French Culinary Institute in New York City in 2002 and working in the city as a chef, until 2010. “The one big factor in restaurants is how they’ll change the minimum wage law for the servers,” he says. “Will servers meet the $15 threshold with their tips, or do the owners have to make up the difference? If it stays the same — just meet the $15 with tips — it won’t affect us at all.” In his case, however, he decided long ago to offer better pay and more benefits to his employees.
“As far as the back of the house, just to get good people I had to pay $15 or more. Because it was so hard to get people working this last year, beyond our core people, I had to raise wages. And we offer health insurance — we pay half of that — and a 401K matching 100%. “Big corporations do it to attract people and managers. And we have been successful. I have such a long-term view of keeping people with us and attracting new talent, and we thought it was time to bite the bullet.”
Some people took advantage of stimulus money last year when they shouldn’t have, he notes, applying for unemployment when they hadn’t worked in several years for the restaurant, or leaving a $20 an hour job with him to collect unemployment. But his core people remained all the way through, and for good reason: He pays them a living wage. “My other philosophy is try to be as efficient as possible in the kitchen — so we can execute with fewer people, we have better people, and we pay them more.
I tell them: ‘I want to you to think of this as career. We want you to be part of this for several years or the rest of your life,’ so we look for people a little older who have that mentality. ”The most successful businesses have happy employees. It’s the right thing to do, as well. When restaurants or any businesses don’t invest in the people, the people don’t care when the boss isn’t around.” As for salaries: Mr. Myer pays his sous chef $76,000 per year, he says, and his day chef in the upper $60s. That way, “if I want to stop working 12 hours a day at 52, I can. Because I have good people.”
Meanwhile, by the time minimum wage gets to $15 in 2026, it won’t be enough to make much of a difference, suggests Mr. Holz.
“We’re not going to be able to do this from the Senate or House floor. We have to convince employers. Companies will have to figure it out and deal with it, or they go away.”