DMI Blog

Nikki Zeichner

What $15,000 Gets You in NYC this Holiday Season

-- A bottle of 1995 Dom Perignon at Sherry-Lehmann

-- A full time employee for the year 2007 earning minimum wage at the raised rate of $7.25/hour.

Wow. That's serious economic disparity in NYC.

I posted a few days ago and briefly described the work that Wage to Live is doing to raise the wages of New York's most exploited workers -- those working in the kitchens of our restaurants. Wage to Live plans to start certifying restaurants that strive to pay their workers living wages (and minimum wage is not a living wage). Sign on to our mailing list to stay up to date. And happy holidays.

Nikki Zeichner: Author Bio | Other Posts
Posted at 3:09 PM, Dec 21, 2006 in
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Comments

You forgot the FICA, so it would actually set you back roughly $16452 (The employer also has to pay disability insurance, but that's in the tens of dollars).

A better question to ask, however, is who is actually paying the minimum wage? Even pizza delivery seems to pay around $9 an hour, and low-wage workers are frequently paid under the table (so no tax).

Finally, if the issue is that it's hard to live on the market wage, the solution to that is not to raise the minimum wage but rather to increase the earned income tax credit. Raising the minimum wage is a tax (just like the earned income tax credit, it is ultimately paid by the people at large), but increases market distortion; a high minimum wage encourages live-at-home teenagers to work an extra job, and makes it impossible for someone who does not generate a minimum wage's worth of productivity to find legal work.

Posted by: Ian Turner | December 26, 2006 12:22 AM

Thanks for your post. I'm also glad that you addressed the cost of FICA for employers, which I left out.

You definitely make an interesting point by advocating for an increased earned income tax credit. However, I don't agree that an increased earned income tax credit could, or should, substitute for living wages. A few things:

First, I'm not sure exactly how "minimum wage is a tax" as you stated. When private employers pay wages to their employees, how are those wages paid by the "people at large?" I definitely understand how an earned income tax credit is a tax (and paid by the people at large). And I imagine that, according to your post, you believe that it is preferable that private employers pay for wages rather than the people at large. So why then advocate for higher earned income tax credits over increased wages paid by employers?

Second, I want to clarify that Wage to Live is not per se advocating for a higher minimum wage. Instead, we advocate for living wages - wages that correspond with the cost of living. This means that if the market distorts and cost rise, then the living wage will rise with it so that workers can continue to cover their living expenses. A living wage is more fluid than a universally imposed increase on minimum wage. Additionally, a living wage in one location will be different from that elsewhere where the cost of living is different.

Third, I guess that if wages are higher, teenagers might be more inclined to work. . . but I'm not sure why that's a problem.

And finally, I'm not sure who those individuals are who work but don't "generate a minimum wage's worth of productivity." Frankly, I'm not sure how to determine that one person's work is more valuable than someone else's work. Though I hold a law degree, I currently work in a restaurant to suppliment my income. Restaurant work is valued far less than legal work - and lawyers generally earn significantly more than restaurant workers in both the front and back of the house. But I would never say that the reason for this is because restaurant workers' work is worth less. Rather, I'd say that restaurant workers recieve less pay than they should becasue society accepts low wages for people engaged in manual labor. And, society accepts inflated wages for professionals that work in industries that generate high profits. Inequity in wages is a problem, and not a result of some people working harder - or having higher productivity - than others.

I'm really glad that you posted because these are really important issues to discuss. While Wage to Live intends to raise the wages of restaurant workers, Wage to Live also hopes to get people to think about the disparity in wages received by workers in the City. I truly believe that the reason that many low income New Yorkers work full time and still qualify for public benefits as a result of society saying "that's just the way it is." Wage to Live hopes that it will get people to think beyond that sentiment and question the disparity in wages earned by people who prepare our food and those who prepare our paperwork. Because all of us who work should be able to live of of our wages.

Posted by: Nikki Zeichner | December 27, 2006 01:40 PM