assistant Eunice Medina, 23, was thrilled when a $12.25
minimum wage took effect in Oakland, Calif., in March.
But almost as quickly, Medina’s workdays were cut and
her hours shaved from eight to six.
employer, Asiya Jabbaar, says she had no choice. Despite
slicing hours and laying off one of three assistants,
Jabbaar says she still may need to close her business
next year and convert it to a part-time after-school
a big letdown for the 38-year-old Jabbaar, who launched
Reaching Beyond Care in 2010.
experience illustrates what can happen to small
employers when minimum wages jump suddenly. The effect
on licensed or government-regulated entities, such as
Jabbaar’s, can be particularly sharp.
state law requires at least a 6-to-1 child-teacher
staffing ratio for small home-based child-care
providers, it’s difficult to respond to higher wage
costs by simply trimming hours or staff. And Jabbaar
voluntarily adheres to an even stricter ratio of 3 to 1.
while Oakland’s new higher minimum wage may lure some
stay-at-home parents back into the labor force, the
irony is that they may face higher prices and fewer
options when searching for child care.
worries most about maintaining high-quality staff if she’s
unable to offer steady pay raises. Before the wage hike,
she started workers at $9, and every year bumped up
their pay by a dollar or so, hoping to keep them
satisfied and at their jobs until the next raise came
no room for growth now," Jabbaar said on a recent
morning as she cared for three 2 1/2-year-olds. "It
wouldn’t be fair to keep (workers) at $12.25. They’re
at that cap."
CHILD FOR A RAISE
grill cook Douglas Hunter is literally the poster child
for a $15 minimum wage: The Chicago man’s picture and
story are featured in the "Fight for $15"
current pay of $9.25 an hour leaves little left for the
single father and his daughter, Serenity.
Hunter, 53, couldn’t afford her junior prom outfit, he
sewed a black lace dress for her, even as they fought
along the way about the hemline.
picked the material," he said. "I got to pick
minimum pay goes to $10 an hour in July. But a steep pay
raise would bring unintended consequences for Hunter, a
diabetic with multiple medical conditions whose care is
covered by Cook County’s program for the uninsured and
$15 an hour, his annual income would become too high to
qualify for CountyCare under the current income limit.
any salary gains could be wiped out by the price of his
medications and supplies, including two kinds of insulin
at $403 a month and drugs to control high cholesterol
and blood pressure that add an extra $330 a month.
that’s not including the syringes, health checkups and
eyeglasses he receives for free, allowing him to avoid
choosing between maintaining his health and providing
for his teenager.
$15, he figures he’d need to reduce his total work
hours to ensure his new income didn’t disqualify him
from his current benefits.
going to be a problem," Hunter acknowledged.
"A raise will kick me out of CountyCare. Then the
medicines are going to cost so much I won’t be able to
afford my apartment."
BOOST FOR BUSINESS
Schaefer prides herself in taking care of workers. The
owner of 10 Ace Hardware stores in the Washington, D.C.,
area pays her 215 employees at least $10.50 an hour.
That’s a buck more than the legal minimum in the
capital and much more than suburbs in Maryland and
to $15 an hour, she says, might actually help in
significant ways. She’s learned from experience that
paying more can boost the bottom line by leading to a
happier, more productive workforce.
Schaefer voluntarily bumped up the starting wage by $2
an hour in 2011, she was replacing about 80 percent of
her employees every year. That’s since dropped in
half, sharply cutting her training costs and boosting
a higher minimum wage would cost Schaefer in other ways.
With less turnover, the average age of her workers would
probably tick up a bit from the 19-to-27 range today.
And older workers are a little more costly, even if they
are more productive and dependable.
accounts for a hefty 20 percent of Schaefer’s total
expenses. If that rises and her sales don’t, she says
she would look at ordering more higher-margin products,
like cheaper-priced tools. She would also probably raise
44, says she also may have to increase how much workers
pay for their healthcare premiums, now 20 percent. And
she and her husband, who manages the books, would
probably take pay cuts. Nor does she rule out the
possibility of cutting jobs.
so, she still thinks that going to $15 an hour makes
good financial sense, as long as it’s not raised too
quickly. "If people are making more money, maybe
they won’t have to shop at Wal-Mart," she says,
"and they’ll shop at my store."
WILL MAKE ‘A HUGE, HUGE DIFFERENCE’
Avila, 36, often faces difficult decisions: Does she buy
shoes for her sons or pay her phone bill? Splurge on
movie tickets or treat her kids to meat?
nearly 12 years, Avila has washed dishes and helped cook
at the Mid-Wilshire Convalescent Hospital, a nursing
home. She started out earning $8.50 an hour and now
makes $11.20. At $15 an hour, which the city of Los
Angeles is moving to require by 2020, the single mother
sees better choices in her future.
going to be a huge, huge difference," she said.
"Even 25 cents or 50 cents could change a lot for
my life and the lives of my kids."
she would hire a baby-sitter to watch her 8-year-old in
the mornings so she doesn’t need to wake him up at 5
a.m. and bring him to work until she can rush him to
school during her 7:30 a.m. break.
years ago, Avila’s husband divorced her and stopped
supporting the children. Rent for her one-bedroom
apartment rose 4 percent to $950 a month earlier this
year. Sometimes, she has to delay her bill payments.
Avila was skeptical of the plan to phase in the citywide
minimum wage increase. At her current pay grade, she
probably won’t feel an effect until the floor reaches
$12 an hour on July 1, 2017.
the promise of better compensation allows her to dream
about saving a little for the future or affording a more
prestigious college for her 15-year-old. "I’d
feel proud to earn a little more," she said.
"And I’d be happier."