No settlement in the minimum wage flux

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Omil Xia/File

Since the Reagan administration’s effect on the middle class in the 1980s, minimum wage has always been a subject of passionate debate spittled through the pearly teeth of vote-grabbing U.S. politicians, reaching the forefront of American consciousness via Bill Clinton’s minimum wage legislation signed back in 1996.

And on Oct. 1, Berkeley’s minimum wage was increased from $12.53 to $13.75 per hour.

This continues an ordinance, pushed by the city of Berkeley, that expects to raise the minimum wage to $15 per hour by this time next year, furthering the gap between Berkeley’s minimum wage and the overall federal minimum wage of $7.25.

According to the U.S. Department of Labor, the federal minimum wage was last raised on July 24, 2009 and has not increased since then. This is despite the fact that everything is now 15 percent more expensive than it was back then, according to the Consumer Price Index inflation calculator on the website of the U.S. Bureau of Labor Statistics.

And on Oct. 1, Berkeley’s minimum wage was increased from $12.53 to $13.75 per hour.

This means that there are employees in Texas still putting in the same exact amount of labor as the blue-collar workers of Berkeley for nearly half the pay.

This large discrepancy between Berkeley and other parts of the United States is not hard to believe if you consider that the minimum wage debate, like most political debates between opposing forces, comes down to a matter of values.

In other words, the way you might feel about the state’s inclusion in the labor market is probably influenced by where you are along the gamut, and chances are pretty good that the minimum wage workers in Texas would probably be all for seeing their wages increase by an extra $6.50 per hour. At the same time, the baristas and pizza cutters working within the salubrious confines of Berkeley’s rising wage ordinance are probably a little happier to be here, too.

There is no confusion that every single minimum wage worker will always like to see their salaries better supported by the state, regardless of the ideologies of the state they live in. Where the cluster-buck starts to unravel is when the argument extends from the employee’s perspective to the perspective of business owners and consumers.

This large discrepancy between Berkeley and other parts of the United States is not hard to believe if you consider that the minimum wage debate, like most political debates between opposing forces, comes down to a matter of values.

At Cafe Blue Door, a local café restaurant, all of the employees work on a minimum wage salary. None of them had complaints about the city-enforced $1.22 raise that they will behold over this upcoming pay period.

Being a regular customer at Cafe Blue Door, however, I did notice that a couple of days before the minimum wage ordinance took effect, the menu prices all spiked up. Ordering a small cup of coffee just a few days prior was originally $2, but then it suddenly jumped 20 cents to $2.20. The club sandwich jumped up 30 cents, from $9.65 to $9.95.

Berkeley’s continual raise in minimum wage, which jumped up from $11 to $12.53 in October 2016, has started to make this small price hike for local businesses seem like an annual event.

While the nudge in prices at Cafe Blue Door doesn’t seem significant, it does cascade from a philosophy practiced by many business owners outside of the minimum wage debate: a fiscal disposition to never compromise profits.

One barista who worked there, Cynthia De Leon, wasn’t too surprised by the move.

“I overheard that the owner stated the minimum wage ordinance was too high, and one of my coworkers got in trouble for using one of the plastic cups in our inventory, and the owner retaliated by deciding to charge a $0.50 fee for the employees to use the plastic cups,” De Leon said.

While the nudge in prices at Cafe Blue Door doesn’t seem significant, it does cascade from a philosophy practiced by many business owners outside of the minimum wage debate: a fiscal disposition to never compromise profits.

The raison d’être of a business owner is to maximize the profits of their business, and so the push for wage increases and employee benefits in general is something that will inevitably be hashed out between the consumer and the employee.

The issue, however, lies in that when baristas such as De Leon clock out, they suddenly take on the roles of consumers. And if they were to exercise their roles as both the employee and consumer within the world of Cafe Blue Door, the minimum wage increase would be almost ineffective in the budgeting of their dining experience.

Though Cafe Blue Door isn’t the only place at which they could get a club sandwich and small cup of coffee, these baristas and other minimum wage workers would likely have to find a coffee shop somewhere outside of Berkeley to fully reap the benefits of their salary raise and keep their dining budget at the same price as it was before.

Clearly, side effects from the annual increases in minimum wage are still brewing, and the long-term outcomes trickling from this immediate wage fix will be determined later.

Contact Paul Martin Martin at [email protected].

Correction(s):
A previous version of this article failed to disclose that Cynthia De Leon is a friend of the author.

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