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Life Below $15 An Hour: Workers On The Potential Federal Minimum Wage Hike

AUDIE CORNISH, HOST:

The federal minimum wage has been set at $7.25 cents for more than a decade. And while the cost of living has gone up, that number has not.

TERRENCE WISE: All labor has dignity. Whether you work at McDonald's, you're a janitor or you work at the White House, any - all labor has dignity and should be treated with such. And even when we look back in history, many folks don't know Dr. King was standing with sanitation workers.

CORNISH: Terrence Wise works at McDonald's in Kansas City, Mo. As department manager, he earns $14 an hour. And he says it's still not enough to get by.

WISE: I know so many folks come to my job and they see me smile at McDonald's and I'm happy, but they don't know that I haven't seen a doctor in 18 years. I don't have dental insurance. I've never had a paid vacation or anything of that nature.

CORNISH: Raising the wage to $15 an hour is part of President Biden's COVID relief package. Senate Democrats took the first step last night to pass that bill. They did it along party lines. And while it's unclear whether the minimum wage provision will survive passage, several moderate Democrats are reluctant to raise the federal minimum wage that high. Workers like Terrence Wise are crossing their fingers. He's 41 and has worked in fast food for almost 20 years. He's also a leader in the Fight for 15 movement.

WISE: I live right in the Midwest, Kansas City. When you put in a living wage calculator here for my city, my ZIP code, a single family - you know, two parents, one child - a living wage here in Kansas City is $23 an hour.

CORNISH: Wise isn't even close to that number. And for many months, he hasn't been close to covering his bills. Not for the first time, Wise was recently served an eviction notice.

WISE: When the sheriffs knocked on the door for evicting - to evict my family, it wasn't me. It was my kids that answered the door.

CORNISH: Wise says he worries about money but also the mental toll that poverty has taken on his family. Hanna Awwad(ph) also knows what it's like not to make enough. She graduated from Oregon State University in 2016. And she took two jobs after graduating - one at Whole Foods, the other at sporting goods retailer REI.

HANNA AWWAD: I would, like, open Whole Foods, and then I would close REI. So in the same day, I was working literally from 6 a.m. until, like, 10 p.m.

CORNISH: At both jobs, she made under $12 an hour. And even working overtime, it wasn't enough to cover her monthly expenses.

AWWAD: You can't afford to buy in bulk. If you're a dollar short on your credit card payment, they don't care. You still get charged a fee for being late. So it's like more expensive to be poor.

CORNISH: And like many recent graduates, she's dealing with that pressure to pay off her student debt.

AWWAD: I had a student loan. I'm still paying it off. I really just couldn't afford my student loan payments every month.

CORNISH: Now, as a graduate student living in Rhode Island, she receives a stipend of $160 a week. She also works as a part-time substitute teacher.

AWWAD: I'm subbing for a teacher who currently has COVID. There's no, like, air ventilation, like, filters in my classroom. I have to remind teachers every day to put their mask over their nose.

CORNISH: Each day of substitute teaching brings Awwad a day rate of $100. That's under $15 an hour. As people like Hanna Awwad and Terrence Wise wait to see what Congress does now, we wanted to look back because for most of American history, there was no federal minimum wage at all. That's according to Ellora Derenoncourt. She's an economist at the University of California, Berkeley. Calls for a federal wage floor grew during the Great Depression, when Franklin Roosevelt was reshaping the economy with his New Deal. And that's where we're going to start this history of the minimum wage, at one of FDR's fireside chats back in 1938.

(SOUNDBITE OF ARCHIVED RECORDING)

FRANKLIN D ROOSEVELT: Consequently, I am again expressing my hope that the Congress will enact it this session, a wage and hour bill, putting a floor under industrial wages and a limit on working hours.

ELLORA DERENONCOURT: The motivation for a lot of the legislation during the New Deal was to address massive unemployment and economic hardship.

(SOUNDBITE OF ARCHIVED RECORDING)

ROOSEVELT: To ensure a better distribution of our prosperity, a better distribution of available work and a sounder distribution of buying power.

DERENONCOURT: So when the minimum wage was first introduced as part of the Fair Labor Standards Act in 1938, there was actually a protracted struggle between President Roosevelt and Southern congressmen who were staunchly opposed to the law.

CORNISH: What is the argument from Southern Democrats? How explicit are they when it comes to race? And what concessions are made to bring them on board?

DERENONCOURT: Southern politicians who really raised the specter of having to pay a minimum wage to Black domestic workers in private households. And they were very much opposed to this and argued that the Southern context was different. It was a lower-wage region. And a minimum wage would destroy Southern industry. So ultimately, the law that came about was the result of a compromise between these forces.

CORNISH: So the Depression era ends with a compromise on the minimum wage, in large part to appease Southern Democrats and also to withstand court challenges over what industries the federal government had the power to regulate under the Constitution.

DERENONCOURT: Key industries that were actually left out of coverage by the 1938 law were agriculture, retail and services. And the latter are some of the canonical minimum wage industries of today.

CORNISH: But calls for expanding that minimum wage didn't go away. By the '60s, those calls were taken up by the civil rights movement and were a big theme of the March on Washington in 1963. Derenoncourt says that aspect of the march is often forgotten.

DERENONCOURT: You know, it was called the March on Washington for Jobs and Freedom.

(SOUNDBITE OF ARCHIVED RECORDING)

A PHILIP RANDOLPH: Yes, we want all public accommodations open to all citizens, but those accommodations will mean little to those who cannot afford to use them.

DERENONCOURT: And a big focus of the key organizers of that March, A. Philip Randolph and Bayard Rustin, was actually the economic rights of Black Americans, which they also viewed as lagging behind.

(SOUNDBITE OF ARCHIVED RECORDING)

BAYARD RUSTIN: We demand that there be an increase in the national minimum wage so that men may live in dignity

(CHEERING)

DERENONCOURT: So there were 10 demands of the March on Washington. And if I remember correctly, No. 9 was for an expanded Fair Labor Standards Act that covered all employment. And No. 8 was for a $2 national minimum wage at the time, which today translates to over $15 an hour when you adjust for inflation.

CORNISH: OK. So when Congress amended the Fair Labor Standards Act in 1966, what was the result of that?

DERENONCOURT: Lyndon Johnson, when he signed the 1966 Fair Labor Standards Act amendments into law, expanded coverage to agriculture, retail services, hospitals, schools, all of these sectors that had been excluded from the original 1938 law.

(SOUNDBITE OF ARCHIVED RECORDING)

LYNDON JOHNSON: We have included more than 9 million new workers under a higher minimum wage.

DERENONCOURT: First of all, Black workers were overrepresented in the newly covered sectors. A result of the law was that the wages of workers in these newly covered sectors improved substantially. And the improvements were twice as large for Black workers as they were for white. The expansion of minimum wage coverage alone explains about a fifth of the reduction in racial inequality in the post-civil rights era.

CORNISH: The last time the federal minimum wage was raised was 2009. Can you give us a picture of who makes the federal minimum wage in the U.S. today?

DERENONCOURT: As of 2019, about 2% of workers were paid the prevailing federal minimum wage of $7.25 an hour. The - what's being proposed today in terms of its impacts on workers and which workers has a lot of echoes with the expansion and minimum wage coverage in the 1960s. At that time, expansion in coverage affected about 20% of the workforce, 30% of Black workers. And actually, the Raise The Wage Act of 2021 would also affect about 20% of U.S. workers and about 30% of Black workers.

(SOUNDBITE OF MONTAGE)

NANCY PELOSI: The Raise The Wage Act gives up to 33 million Americans a long-overdue rate.

BERNIE SANDERS: There ain't nobody in America - not in the north, the south, east or the west - who can survive on $7.25 an hour...

PRESIDENT JOE BIDEN: There should be a national minimum wage of $15 an hour. No one working 40 hours a week should live below the poverty line.

DERENONCOURT: The increase in the minimum wage would disproportionately benefit Black workers. We think that that could reduce racial inequality today, which is still at very high levels.

CORNISH: You mentioned that the minimum wage they were calling for at the March on Washington, that's equivalent of more than $15 an hour today. What does that say to you?

DERENONCOURT: It tells me that it's an evergreen demand in some sense, but also that both policy and the institutions that represent workers or that increase the bargaining power of workers have been on the decline. We know that unionization rates in the U.S. are at an all-time low. We know that the federal minimum wage has been stuck at 7.25 for over a decade, which means that it's been declining in real terms because of inflation. We also know that if the minimum wage had tracked productivity gains since the '60s, it would be much, much higher today. Part of the demands of the March on Washington was for a $2 national minimum wage. That's over $15 an hour today.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED PROTESTERS #1: Seven twenty-five has got to go. Hey, hey.

DERENONCOURT: And when the movement for a $15 minimum wage, known as Fight for 15, was launched...

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED PROTESTER: What do we want?

UNIDENTIFIED PROTESTERS #2: Fifteen.

UNIDENTIFIED PROTESTER: When do we want it?

UNIDENTIFIED PROTESTERS #2: Now.

DERENONCOURT: ...That's exactly the time when a $2 minimum wage was equivalent to a $15 minimum wage. In other words, you know, in 2012, when there was a national movement to raise the wage to 15, that was exactly what the organizers of the March on Washington were calling for.

CORNISH: That's UC Berkeley professor Ellora Derenoncourt on the century-long fight over the federal minimum wage, a fight that is once again playing out on Capitol Hill. Tomorrow, we'll look at the potential effects of raising the federal minimum wage...

UNIDENTIFIED PERSON: Is kind of our biggest unknown for the future.

CORNISH: ...On businesses, employment and on prices. Transcript provided by NPR, Copyright NPR.

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