When $15 an hour isn’t good enough

I recently found inspiration from the most unlikely of sources: Amazon. As the head of Union Settlement, a nonprofit serving low-income residents here in East Harlem, it is surprising that I would be inspired by a for-profit company with near-monopoly power and unfathomable wealth.

But whatever you think of Amazon’s business practices — and the recent revelations of the company’s mistreatment of warehouse workers amply demonstrates its generally heartless approach — Amazon deserves credit for having adopted a nationwide $15-an-hour minimum wage for its employees in 2018, which in turn prompted companies such as Target, Best Buy and Wells Fargo to do the same.

The statutory minimum wage in New York City is already $15 an hour, and as is typical in the nonprofit sector, Union Settlement has quite a few employees making that amount, or barely more.

The problem, however, is that the minimum wage is not a “living wage” — i.e., the wage necessary to cover housing, food, child care, health insurance, transportation and other basic necessities. It was designed to be, but it isn’t.

Our organization has a 35-hour workweek, which means that a minimum wage worker earns only $27,300 per year. But, here in East Harlem, studio apartments typically rent for at least $2,000 per month, or about $24,000 a year. How much does that leave for non-housing necessities? You can do the math.

Housing subsidy programs like Section 8 provide some relief, but relatively few landlords accept those vouchers. And while almost all low-wage workers will qualify for the Earned Income Tax Credit, other assistance programs like Medicaid and the Supplemental Nutrition Assistance Program have income limits that can exclude minimum-wage employees, depending on the size of their household.

The Fight for $15 was supposed to be about establishing a living wage for people who worked full-time. But the planning for that fight started a decade ago, and didn’t hit the public radar until November 2012, when large numbers of New York City fast-food workers walked off the job demanding a $15 minimum wage.

Fast forward to 2021, and that $15 an hour — adjusted for inflation, which is suddenly rising more sharply than many expected it would — should now be about $17.50 an hour. And even that amount is low, especially in high-cost-of-living places like New York City.

According to the MIT Living Wage Calculator, the living wage for a single childless adult here in Manhattan is $21.77 an hour — with higher numbers for families with children.

Simply state, the $15 an hour minimum wage is not enough to live on in New York City. So with President Biden and Congress mired in a debate over increasing the absurdly-low federal $7.25 minimum wage, and New York State officials considering their work “done” at $15, there was little hope on the horizon for my low-wage employees.

And then came my moment of inspiration. If Amazon can adopt its own company minimum wage, then why can’t Union Settlement?

Here is the main roadblock: a lack of money.

Union Settlement’s funding predominantly comes from the government, which covers most (but far from all) of the costs of our vital services — child care, youth programs, English language classes, mental health counseling, small business assistance, Meals on Wheels and more. Those government contracts have extremely tight budgets and simply won’t cover the higher wages we would need to pay.

But this is not just a financial issue. It is a moral issue as well. How can we ask employees to serve East Harlem’s low-income residents while paying salaries that keep the employees poor as well? We can’t.

So starting July 1, Union Settlement will increase the minimum wage for our employees to $16 an hour, with a plan for further increases in future years until we eventually reach $17.50.

We’ll cover those costs by asking our donors to increase their support, while simultaneously working with our nonprofit colleagues to urge Mayor de Blasio to sign an executive order adopting a $17.50-an-hour minimum wage for employees working on city contracts. President Biden signed such an executive order in April, raising the minimum wage on federal contracts to $15 per hour — even in low-cost areas of the country. The mayor should follow that precedent, adopting a higher rate that makes sense here in New York City, and commit to including funding in the city budget to pay for those increases.

This would be a great way for the outgoing mayor, who came into office talking all about income inequality, and to demonstrate his commitment to progressive values and to supporting those toiling to make this a more livable city. And hopefully this action will inspire other mayors and governors to do the same, thereby spreading the beneficial impact nationwide.