Their Paychecks Doubled, And Here's What Happened

Lives changing for minimum wage workers

Space Needle and Downtown Skyline, Seattle, Washington, USA
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A single mom who was living in a rented room is getting an apartment of her own, at age 55. Another woman, who works as a customer relations representative, is preparing for necessary surgery that she had been forced to postpone because she couldn't even afford blood tests. A security guard now pays his rent and buys food in the same week. He used to have to pay his rent in installments, and rely on a charity food bank for some groceries.

All of these people have jobs at the Resorts World Casino in New York City, and they told their stories to local news site Gothamist.com, when asked what happened after their pay literally doubled overnight.

It happened last October, after casino management and a hotel workers' union reached an agreement that raised their salaries from $10 to $12 an hour to $20 or more an hour, and added health insurance benefits.

You may hear quite a few stories like theirs out of Seattle in the near future. The Seattle City Council recently voted to raise the citywide minimum wage to $15 per hour in several stages. That is, or will be when it is phased in, the highest minimum wage in the country.

The decision appalled opponents, while energizing the activists, workers, union organizers and politicians who have been fighting for a higher minimum wage in cities and states across the nation ever since efforts to raise the federal minimum wage stalled in Congress.

About 72 percent of Americans now say they support an increase in the minimum wage. Even opponents aren't arguing that people who work hard shouldn't make enough money to buy food and pay rent.

The arguments against an increase are there. It could put an intolerable strain on mom and pop businesses. Businesses could respond by cutting back their work forces, hurting those the increase is supposed to benefit. It would force businesses to raise prices, putting a strain on all consumers.

But that big number out of Seattle, $15 an hour, appears to have changed the national debate over the minimum wage. It's not a "yes" or "no" question anymore. It's a question of how much to raise it, and how fast.

Even in Seattle, the headline number doesn't tell the story. The City Council made a concession to small business, phasing in the increase over seven years for most businesses that have fewer than 500 employees.

More modest measures don't always go over well. The City Council in Las Cruces, New Mexico, boosted the local minimum wage by 50 cents, to $8, with another 50 cents an hour due in 2016. Workers handed out bags of peanuts to City Council members to protest the meager raise. But small business owners said they could live with it, and many said they already paid above the minimum wage because they wanted to keep good workers.

So far, local minimum wage increases have been approved in other cities including Albuquerque, San Francisco, Santa Fe, San Jose and Washington, DC. California's Senate just passed a measure to increase the state minimum wage to $13 an hour by 2017, and 19 other states have set a minimum above the federal standard.

That patchwork approach raises problems of its own. After the Seattle decision, Michael Strain, of the American Enterprise Institute, noted in an op-ed column in The Washington Post that the rest of Washington State has a minimum wage of $9.32 an hour. The headline says it all: "Seattle do-gooders just shot themselves in the foot."

Gary Burtless, a senior fellow at the think tank Brookings Institution, strongly favors the Obama administration proposal to boost the national minimum to $10.10 an hour. He argues that it will "boost the spendable incomes of millions of poorly paid workers and their families, and I expect it will have only a small adverse effect, if any, on low-wage workers' job opportunities and work hours."

Burtless, though, is less certain about the wisdom of a single city raising its wage well above nearby jurisdictions.

No matter how heated the debate gets, even economists can't say for certain whether, or to what degree, a minimum wage increase will help or hurt American businesses. A poll of a panel of prominent economists by Initiative on Global Markets concludes that a third did not believe that a minimum wage increase would make it more difficult for low-skilled workers to get a job. Another third said they didn't know.

It's clear that those casino workers in New York are much better off now that their wages have been doubled, but the long-term economic impact is still an unknown. At least their employer is no mom-and-pop shop.

Resorts World is operated by Genting Malaysia Berhad, which is Southeast Asia's largest gaming company and a subsidiary of the global entertaining and gaming company Genting Group. In 2012, its New York City casino became the largest slot revenue gaming property in the U.S., taking in more than $638 million in gross gaming revenues.

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Rocky

As a one time business owner, I say employees should be paid what they are worth, not what big brother government forces me to pay them. It is always the bottom line in business. If I can't make enough money to stay open, and if too much of overhead is in payroll, I will have to fire employees, cut back production, and possibly have to shut down. If I can make enough to grow my business then I can hire more people....Is anyone out there getting this?

July 11 2014 at 7:24 AM Report abuse +1 rate up rate down Reply
bharrison777

If raising the wage rate helps so much then let's make it $100 an hour.

June 12 2014 at 4:18 PM Report abuse -1 rate up rate down Reply

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