📈 Reimagining The Minimum Wage 📉

2009: $7.25 / 2019: $7.25

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As we get closer to the end of the year, more and more folks are sharing photos of themselves a decade apart. The 2009/2019 versions of Ashley are…different from each other.

Left: 2009, just finished teacher training. A guy I did the program with dumped me for the girl to my left…during the program—and she talked about him to me all the time. Right: 2019 has no time for that. I did (poorly) cut my hair in both photos.

While these #TenYearChallenge photos a lot of fodder for jokes and embarrassing stories, one thing that hasn’t changed since 2009 is the minimum wage.

The federal minimum wage in 2009 was $7.25 an hour. In 2019, it is still $7.25.

Many states have adopted their own minimum wages. California has one of the highest: employers with fewer than 26 employees must pay at least $11/hour and those with 26+ must pay $12, with a plan to get everyone to $15 by 2022. But there are still a number of states where the minimum wage is the same as the federal minimum wage—and there’s no plan to raise it.

Who does this affect? Low-level employees: including, but not limited to, retail employees, domestic workers, and, of course, members of the service industry.

So what happens when we reimagine the minimum wage?

From Elizabeth Warren’s Twitter.

“I had this…idea in my mind that [at] all the places that I have worked before, the power structure and the resources were all arranged like this upside-down pyramid,” says Michael Schroeder, director and roaster at Oddly Correct Coffee in Kansas City, Missouri. On November 4th, 2019, Oddly Correct announced on Instagram that it would guarantee its employees a take home pay of at least $18 an hour. If they made that amount with their base pay plus tips, great. If they didn’t make enough in tips to get them to $18, then Oddly Correct would subsidize the rest.

Missouri is one of 44 states that allows employers to pay a tipped minimum, or less than the minimum wage to employees who also collect tips. Some states allow employers to pay as little as $2.13 an hour if an employee collects tips; this differs state by state. In Missouri, employers are allowed to take a tip credit of 50% of their minimum wage ($8.60), meaning they can pay their staff as little as $4.30 an hour.

The minimum wage is literally the lowest you can legally pay someone—so Michael decided to redefine that.

$18 an hour was a specific number, determined by using MIT’s Living Wage Calculator (in Kansas City, the living wage, or an estimate of what the actual cost of living is for a given municipality, for a single person is $11.29 an hour) and by deciding what was feasible and realistic for Oddly Correct. “If someone on our team is working 30 hours a week and making $18 an hour, this is going to put them well over that living wage and give them a greater degree of financial independence. I knew that it was something that, right now, we could handle as a business.”

Oddly Correct’s policy removes the volatility of a key component—tips. Although Oddly Correct baristas still rely on tips, they’ll leave every shift with a guaranteed amount of money: a barista working 30 hours will always leave with a minimum of $540 a week. Neither a busy shift with lots of people on the floor (and a lot of people to split the tip pool with) nor a slow shift with no customers will affect that base amount.

That totally dismantles the definition of what minimum wage even is. Instead of being a wage floor for employers, Oddly Correct has made it a protective roof for its employees.

The post from Oddly Correct’s Instagram.

There’s a lot of rethinking systems and values required in a phase shift like this. In the beginning, Michael mentioned a pyramid—one where the highest paid people have the most resources and power. And setting such an ambitious minimum wage means valuing your workforce in a totally different way. “I think it just comes back to the idea that if I can't place a proper value on my greatest resource, as opposed to viewing it as like my biggest liability—it is the thing that we pay the most money for week after week—but it's bringing us the most benefit. It comes from seeing the value in people as opposed to feeling like it's a weight that has to be managed.”

Speaking of value, let’s go back to that initial minimum wage. Using an inflation calculator, if the minimum wage went up to at least match the rate of inflation, it would be $8.70. To put it simply, $7.25 in 2009 was worth more than $7.25 is today. In ten years, we’ve systematically devalued the folks most likely to be paid by this standard—in some ways, it was better to be a minimum wage employee ten years ago than it is now.

What does that mean? Many businesses continue to actively devalue their most precious—front-facing, customer-oriented, public consuming—assets. Year after year after year. Low-wage workers are often painted as disposable and transient, but never is their financial devaluation taken into account. Our work force has built an intentionally unstable tier at the very bottom of the pyramid.

According to the Bureau of Labor Statistics, about half a million employees make the minimum wage. Another 1.3 million make below the minimum wage. Oddly Correct’s new policy isn’t just about paying baristas more—although that is fundamentally important and its significance cannot be ignored—but a push to think about how you value the work of others.

“If I think that a job is worth doing, then I should be paying a wage that makes it a job that someone can continue to do,” Michael says. “If I think that that person's job is worth having on my team, then I need to show that I value it with how I'm compensating it. I charted our pay system to make it less of like a pyramid—like a point at the bottom and wide at the top—to more of a rectangle.”

You can learn more about Oddly Correct and how they’re implementing their new minimum wage structure by listening to the latest Boss Barista Roundup or by checking them out on Instagram.

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