Who needs a $25 minimum wage?
This article was originally published on Capital & Main.
James Baldwin once reminded us “how extremely expensive it is to be poor.” Data shows it’s becoming increasingly more so. In 2020, 2% of Black people in the United States made minimum wage, $15.95 per hour, or less. As of 2023, 13% of Los Angeles County lives below the poverty line. Recently, an analysis of Los Angeles County’s housing market declared that $70,000 is now “low income.” As this Capital & Main article explains a minimum wage that keeps up with rising costs “won’t make [workers] rich,” but it could ease the blow everyday expenses are having on Californians.
Chris Lillian works at Universal Studios Hollywood, but he’s a long way from the dream factory. The giant theme park lies in the San Fernando Valley mostly within unincorporated Los Angeles County, where the minimum wage is set at $16.90 per hour. Lillian makes the minimum.
Lillian, 37, will earn about $35,000 this year. Even with a rent deal that is only a fraction of what an average Angeleno pays for housing, the food stand attendant says that covering his most basic expenses each month “is a little bit of voodoo and prayer.”
“I wonder myself how I get things paid sometimes,” Lillian said this week. “It’s a never-ending litany of costs, which means there’s no work-life balance and no long-term plan.”
According to the state’s Department of Housing and Community Development, Lillian’s earnings mark him as a “very low income” worker in L.A. County, where even a single person earning $70,000 is considered low income. But the bigger picture is that, for workers like Lillian, the promise of the Golden State lies increasingly beyond their reach.
The strain on lower-income workers in California is beginning to buckle them, according to a new study of the state’s lowest income residents. Between March and mid-July of this year, more than 60% of households earning less than $35,000 said they had trouble paying for basic expenses such as food, housing and medical costs.
Those figures, based on the California Budget & Policy Center’s analysis of U.S. Census Bureau data, come into bolder relief in specific categories. Families, for instance: Almost half of all California households with children — regardless of their income — said they were having trouble paying essential costs. The figure skyrocketed to 71% for those with incomes below $35,000.
And Black and Latino residents were the most likely to struggle financially overall, with 54% of Black households and 49% of Latino households saying they had trouble paying for the basics no matter their income level. For white households, that figure was far lower at 30%.
“The findings were pretty striking,” said Hannah Orbach-Mandel, a policy fellow at the center. “They’re telling the story that we were kind of afraid they’d tell.”
There are some obvious factors, including the end of critical pandemic-related relief programs. In 2021, the expansion of the federal Child Tax Credit played a significant role in the dramatic drop in child poverty rates in California and nationally, but that CTC program ended. So too did expanded food credits under CalFresh, the state’s version of the federal Supplemental Nutrition Assistance Program, or SNAP.
Record inflation has further ratcheted up the pressure. Lillian said his commute to Universal is relatively short, but spiking gas costs are still eating into his take-home pay. On Sept. 12, the average price of a gallon of gas in L.A. County was $5.56.
Lillian long ago gave up his own living space. He now rents a room in a Glendale home, because the cost — $600 a month — is what he can afford. (The average rent for a one-bedroom apartment in Glendale is nearly $2,600.) But his savings are so low, he said, that he has been postponing needed oral surgery until he can scrape together the $600 for the portion of the procedure that his dental insurance won’t cover.
Universal workers who are members of UNITE HERE Local 11 appeared Sept. 12 at the L.A. County Board of Supervisors meeting in support of a proposal to raise the county’s minimum wage to $25. (UNITE HERE is a financial supporter of Capital & Main.) The proposal, co-authored by board chair Janice Hahn, has already met strong pushback from the hotel industry.
“A $25 minimum wage would not make these workers rich, but it would make their lives a little easier and may mean that they don’t need to work multiple jobs just to stay in their homes,” Hahn said in introducing the proposal in August.
All of this plays out against the ever-widening gap between rich and poor in California. According to the Franchise Tax Board, the share of statewide income going to the top 1% rose to an all-time high of more than 30% in 2021, the most recent data available. Just two years earlier, the one-percenters’ share of statewide income was 23%.
Orbach-Mandel said those numbers affirm what the budget and policy center has long maintained: There is more than enough wealth in the state to create opportunities to help its most burdened residents.
The center has proposed a multipronged plan toward that end, advocating, among other things, for higher tax rates on the state’s most profitable corporations and a firm minimum that such corporations must pay. But the political will to enact such measures is not yet evident — and in the here and now, life goes on for Chris Lillian and workers like him.
That life has become a constant struggle. “I don’t even crunch the numbers these days — it’s too stress-inducing,” Lillian said, chuckling. “The only thing I know for sure is that the cost of everything is rising.”
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