Meanwhile, another study by a New York City transportation commission found that taxi drivers earning the minimum fare rate of $8.50 an hour were more likely to be unemployed or underemployed than those earning $16.30 per hour. (I have written at length about the low-competition dynamic that has resulted in the failure of local cab companies to adequately market and replace the declining revenues of the taxi drivers.) That study found that the unemployment rate among the lowest-paid drivers was only 16.5 percent (including the 16.3 percent who were “marginally paid” i.e., more than $5.56 an hour in “the noncompeting market size”) compared to 27.6 percent for the lowest-paidcab drivers, whose average annual income was$34,250 a year. Even more sobering is the fact that the lowest-paid drivers are the only group of low-paid workers in Los Angeles and Santa Monica that makes up half of all taxi applicants.
A March study of the economic impact on Los Angeles city-wide of expanding the minimum wage to $15 an hour revealed that the wage increase would increase the wages and job opportunities for a variety of low-wage workers and shift employment from the currently struggling downtown core to other parts of the city and from the working poor to the wealthy. The study also suggested that the larger effects of the minimum wage increase would not be felt immediately but would “occur gradually over time.” Such a policy will have considerable economic repercussions through the reduction of unemployment and underemployment, increased output and efficiency of economic activity, and the reduction of “disproportionate burden” on social services for an entire population.
The New York City Council has been debating for months how to deal with the increasing number of people with no employment or work contracts, including the “gig economy” workers that Uber and Lyft allow on their platform. New York’s first $15/hr minimum wage law will go into effect as scheduled on August 1, 2016 in order to ensure that these workers can get a good wage and benefits during the final three months of the new minimum wage law’s four-year phase-in period, when the wages will rise to $10.10/hr at the end of 2018.
The New York law was proposed by Mayor Bill de Blasio, and while the Council rejected the bill, it will be considered again in the 2017 budget and is expected to be renewed. New York’s $15/hour minimum wage law isn’t going to solve all employment shortfalls because there will still be people on the streets the same number of people as there were in New York City in June of 2013, so it’s necessary to be more aggressive about the employment of these high-demand worker, as those at the edge of the workforce can very easily be unemployed or worse, underemployed.
But it is no coincidence the $14+/hr minimum wage has only been approved in this country in the last 30 years. The United States has become a nation of low-wage workers that have been at the forefront of neoliberalism and the economic transformation that followed on the heels of the fall of the Soviet Union. Low-wage workers are often the first people who will be unemployed, and if they have a legitimate complaint (whether they want a raise or not) they will be the first people to be punished (or be hired) back up the line as the economy takes root. This leads to a whole lot of political problems.
If “the economy is booming” like it is in the United States, most poor and non-white workers will be “entrenched” in low-wage sectors like food service, fast food, retail and retail, and their livelihoods and conditions will be greatly affected by continued outsourcing, cutbacks, outsourcing and wage cuts across the board in order to maintain a “booming” and compliant economic system at work and at home. The consequences to the workers who are pushed to the fringes of the economy in these sectors especially those who are low-paid but have a credible claim to be employed is that they end up in lower-wage jobs and lower-skilled service jobs because these are the only real way in which they can hold on to a “real and permanent level of employment.”
By the time these workers get over-stressed with the “booming of the economy” (and they will as long as they are not “redundant” - even “necessary” workers are not counted among those who are redundant and should be fired), their condition and the state of their employment will greatly diminish as the economy continues to take hold of the workplace and the living conditions, wages and benefits of these workers will have improved by the “booming” of the economy that is to say, those workers who