As a teenager, Nicole Lee Schroeder worked part time at McDonald’s — eight-hour shifts at $7 an hour — just to afford a car to get to and from her unpaid internship. Ten years later, she’s a Ph.D. candidate at the University of Virginia. She’s held a range of positions within academia, from research assistant to editor.
Yet, according to Schroeder’s viral Twitter thread, she still considers the McDonald’s gig the hardest job of them all.
“You’re never just doing one thing, and there was not really downtime. It was a constant go, go, go kind of day,” she said to TODAY over a Zoom call. “Both the fact that you’re on your feet the whole time and that breaks are infrequent. It’s really draining when everyone is impatient who comes through the line, and everyone thinks they deserve a certain type of service.”
Following President Joe Biden’s push to gradually raise the federal minimum wage to $15 an hour (from $7.25 an hour, the rate since 2009) by 2025, the age-old debate over how much money service workers need — or, perhaps more accurately, how much they deserve — exploded over social media. Last week, Costco announced that the company is increasing its starting hourly wage to $16. Around the same time, those in opposition to a $15 minimum wage — including Congressional Republicans — celebrated when the Senate parliamentarian ruled that Democrats couldn't include the measure in the upcoming budget reconciliation.
In arguments against the wage hike, some people refer to low-wage work with derision, turning the very act of "flipping burgers" into an insult. Others, like Schroeder, are determined to debunk the range of assumptions that create this mentality.
“Someone had tweeted that they work in a warehouse where they get paid $15 an hour, and they'll be damned if anybody flipping burgers gets paid the same as them,” Izzi Hartwill, a college student and fast-food worker, told TODAY over Zoom.
In a thread with nearly 70,000 retweets, she explained why "flipping burgers" demands far more of the worker than those two reductive words. “It’s sitting in a hot room for 8 hours. It’s stocking big a** boxes of food. It’s creating an entire meal in less than 5 minutes,” she wrote. “It’s dealing with people who yell at you, disrespect you, people who refuse to wear a mask.”
Similarly, Schroeder’s thread details how the role of “back cash” at McDonald’s — taking orders on a headset, paying out change to customers and washing dishes, all at the same time — was so physically and emotionally exhausting that she couldn’t do much else when she returned home from a shift. None of her subsequent, more "respectable" jobs affected her like that. And her time at McDonald’s required her to learn and exercise communication, math and multitasking skills.
“When we say something is unskilled, we’ve embedded it with this meaning that it’s worth less to society — that there’s less relative value to it; it does less for our communities,” she said. “I'm fully funded and being paid to conduct research. Is that worth more or less than someone who's feeding people?”
Sylvia Allegretto, a labor economist and co-chair of the Center on Wage and Employment Dynamics at the University of California, Berkeley, agrees that the pervasive distinction between workers is arbitrary, calling “unskilled labor” an empty term — and more so now than ever.
“These are critically important jobs. We have certainly learned, if anything, during the pandemic, that some of our highest-wage workers aren’t actually that important to the functioning of the country on a day-to-day basis in a crisis, right?” Allegretto told TODAY. “We know delivery workers are important. We know the grocery store workers are important. We know some of the lower-paid hospital workers are so important.”
With the federal minimum wage unchanged for over a decade — and the value of that amount eroding while income inequality increases as the years go by — Allegretto says Biden’s plan is “long overdue.” TODAY spoke to economists about the most common rebuttals to a minimum wage hike — and why they might be misguided.
Will raising the minimum wage cause inflation?
Logically, it makes sense: If businesses have to pay their employees more, they would resort to raising the prices of their goods or services. And according to Ben Zipperer, an economist with expertise on low-wage labor markets at the Economic Policy Institute — which describes itself as nonpartisan — there’s some truth to it. Research has found that restaurants use small price increases as an adjustment to increased labor costs.
However, Zipperer emphasizes the word small.
“There are a lot of other expenses when you run a business that have nothing to do with how many minimum wage workers you employ,” he said over Zoom. “For the typical restaurant, labor costs are only 20%-25% — minimum wage labor costs are even less than that. So when the minimum wage goes up, yes, you may need to raise prices a little bit, but you're going to raise them much less than the actual minimum wage increase.”
In other words, the degree to which Biden’s plan would help low-wage workers is exponentially greater than the degree to which it would damage consumers’ wallets.
Plus, Zipperer explained, the real problem is that inflation has already been happening. Over the past few years, businesses have had to respond to hikes in the cost of food, electricity and rent, to name a few. Wages, on the other hand, have remained stagnant, and it’s time that they’re brought up to speed.
“The prices of things go up in the economy, and sometimes, the wages that we’re paid reflect that,” he explained. “For minimum wage workers, this hasn’t been the case. This means that they’re losing ground relative to what they need to purchase, to have a sustainable but adequate standard of living.”
Will a hike in the minimum wage cause unemployment?
Similar to the concerns over inflation, people also wonder if forcing businesses to sustain a higher minimum wage means they won’t be able to hire and retain the same number of workers as they did before.
But according to Allegretto, the academic record indicates that previous minimum wage increases haven’t led to significant job losses. A 2019 evidence review — the most comprehensive review in the literature — by Arindrajit Dube, a professor at the University of Massachusetts at Amherst, indicates that the employment effect of the minimum wage is very close to zero, save for a few outliers.
Of course, this work didn’t end the debate over employment. Studies continue to come out, both confirming and contradicting Dube’s, and it seems unlikely that academia will ever reach a definitive conclusion. The question is, then, whether the higher wages for those with jobs outweigh the number of jobs lost.
Both Allegretto and Zipperer say that they do.
A new analysis by the Congressional Budget Office, for example, estimates that a $15 an hour minimum wage would cause 1.4 million job losses. While Zipperer believes that the study is too pessimistic, he says that even taking all of its numbers as a given proves the overall merits of a wage hike.
“The CBO study does confirm that a $15 minimum wage in 2025 would raise the wages of 27 million workers, reduce the number of people in poverty by nearly 1 million, and help to reverse growing income inequality,” Zipperer said.
The Economic Policy Institute found that the majority of workers helped would be women and people of color. Largely contributing to the gender and racial pay gaps, 59% of people earning below $15 an hour are women, and almost 1 in 4 of those women are Black or Latina.
Moreover, Allegretto reminded TODAY that low-wage workers are also consumers, which further offsets the costs. The money they receive in higher wages will go back into the economy as money spent — a flow that ultimately results in a “net-positive.”
"We're one of the wealthiest countries in the world," she said. "That so many people in this country go to work every day in poverty is a real unnecessary shame."
Does increasing pay for unskilled jobs devalue more skilled jobs?
This is the question that sparked the whole "flipping burgers" debate in the first place — people couldn’t stomach the notion of someone doing supposedly easier, less valuable work and making the same wages as them.
Even putting the arbitrary distinction between "skilled" and "unskilled" labor aside, Zipperer explained that a higher minimum wage would not only benefit workers earning below $15 an hour; it would also boost those working at slightly above the new federal minimum wage — say, at $16 or $17 an hour.
“Those workers also end up receiving a wage bump. And the reason why reflects (the above concern) — employers recognize that they maintain some kind of hierarchy of pay at a workplace,” he said. “They adjust those pay ladders in response to minimum wage increases.”
This phenomenon is called the "ripple effect." A 2015 piece by Zipperer for the nonpartisan Washington Center for Equitable Growth — summarizing the data of several prominent studies — recognized that the ripple doesn’t impact workers earning middle-class incomes or higher. However, for the bottom 20% of wage earners, a 10% increase in the minimum wage could increase wages up to 2.9%.
“Minimum wages, then, are an important piece of the policy toolkit affecting wage inequality and boosting stagnant wages at the bottom of the wage ladder,” Zipperer wrote.
Why should everyone get $15 an hour if the cost of living varies from state to state?
A pervasive myth about the minimum wage is that because the cost of living differs by state, only residents of places like California need $15 an hour — whereas residents of say, the rural South, can get by just fine as they are.
While no one can argue against the existence of geographic disparities, Allegretto explained that the proposed plan is necessary as a wage floor. Everyone, everywhere, should make $15 an hour minimum, regardless of whether some states decide to raise it even further.
“The wage floor matters,” she said. “Don't forget — if you look at a map, and you see the states that follow $7.25 an hour, they’re some of the states that have the highest poverty rates in the country.”
For example, The New York Times recently spoke to minimum wage workers in Fresno, California. Despite the agricultural city's low cost of living compared to coastal areas, it bears one of the state's highest poverty rates. And ultimately, the piece found that the proposed $15 an hour still isn't enough to support Fresno's families.
The Economic Policy Institute’s Family Budget Calculator supports this conclusion. The tool calculates the income level that types of families in different locations need to have a “modest but adequate standard of living,” Zipperer said. That means being able to afford renting an apartment, transportation, food — and for families with kids, day care.
As per the calculator, a family of two parents and two children in Fresno County would require roughly double the annual salary of a $15 an hour minimum wage. A single person could scrape by, but barely.
“There’s no allowance for any kind of savings, for emergencies, for retirement — it’s very bare-bones,” Zipperer explained. “Even within that bare-bones budget, we find that today, in the year 2021, if you are a single adult living anywhere in the country, you're going to need at least a $15 an hour job in order to make ends meet.”