Driving the news: Over the last year, major cities like New York, Seattle and San Francisco have declared $15 an hour minimums, and major corporations like Amazon and Disney have followed suit. These moves have made $15 the target across the country. but they also create new expectations that employers must consider.
Take El Centro, a city close to the Mexican border in California, where the median wage is $14.76, per the Bureau of Labor Statistics. Because of El Centro's lower prices, the purchasing power of $15 there actually comes to about $16.80, according to a government formula that reconciles the geographic value of wages from city to city.
- But nursing assistants in El Centro already are paid a median wage of $15.07 an hour.
- Now, they will be earning the same as fast-food cooks.
- So unless the wages of nurses and professionals like them go up as well, they could start their own outcry, says Michael Saltsman, managing director of the Employment Policies Institute, a fiscally conservative DC think tank.
This scenario is playing out right now at Amazon. On Oct. 2, the company put in place a $15 an hour base wage for all employees. Senior warehouse workers who were already making $15 an hour were given a $1 an hour raise. But many protested that they would actually see a drop in total compensation because Amazon stopped issuing bonuses and stock awards, the Seattle Times reports.
- Now, Amazon says it may resurrect some of the bonuses and stock awards.
The other side: Silicon Valley, only about 550 miles north of El Centro, is the most expensive part of the country. That same $15 is worth only around $11.80 there — and since the median hourly wage is already $27.66, the subject of the pay raise for most is moot, Saltsman says.
