WEBVTT 00:00:00.000 --> 00:00:03.399 Imagine for a second that you're digging up a 00:00:03.399 --> 00:00:05.580 time capsule, like one that was buried back in 00:00:05.580 --> 00:00:09.539 the year 2009. Oh, wow. OK. 2009? Yeah. And you 00:00:09.539 --> 00:00:12.960 pry the lid open, and inside you find the defining 00:00:12.960 --> 00:00:15.679 artifacts of that era. So you've got a Motorola 00:00:15.679 --> 00:00:18.239 flip phone. Grasset. Right, a first -generation 00:00:18.239 --> 00:00:21.100 iPad. Yeah. And a piece of paper that just says, 00:00:21.239 --> 00:00:22.859 the federal minimum wage in the United States 00:00:22.859 --> 00:00:25.839 is $7 .25 an hour. I mean, the technology in 00:00:25.839 --> 00:00:28.120 that box feels like ancient history. Like, you 00:00:28.120 --> 00:00:29.940 wouldn't even try to load a modern website on 00:00:29.940 --> 00:00:33.280 a 2009 flip phone today. No, of course not. But 00:00:33.280 --> 00:00:35.920 the thing is, that piece of paper, it's not in 00:00:35.920 --> 00:00:38.039 a time capsule. Yeah. For millions of workers 00:00:38.039 --> 00:00:40.560 across the country right now, that $7 .25 an 00:00:40.560 --> 00:00:44.429 hour is still, you know, the baseline federal 00:00:44.429 --> 00:00:46.850 reality. Which is just wild to think about. It 00:00:46.850 --> 00:00:50.710 is. And that exact tension, the world just accelerating 00:00:50.710 --> 00:00:52.829 while the wage floor stands completely still, 00:00:53.490 --> 00:00:55.429 that is what we are exploring on today's Deep 00:00:55.429 --> 00:00:57.909 Dive. Right. We're unpacking the fight for $15. 00:00:58.490 --> 00:01:01.009 And it's really this incredible journey from 00:01:01.009 --> 00:01:06.699 a localized fast food strike to this massive 00:01:06.699 --> 00:01:10.700 global economic debate that's fundamentally reshaping 00:01:10.700 --> 00:01:13.739 how society values labor. Yeah. And before we 00:01:13.739 --> 00:01:15.359 really get into it, I think we need to lay down 00:01:15.359 --> 00:01:17.700 some ground rules for this deep dive because 00:01:17.700 --> 00:01:20.439 we're looking at a massive stack of sources today. 00:01:20.459 --> 00:01:22.500 We really are. And, you know, it includes data 00:01:22.500 --> 00:01:25.099 from progressive labor organizers, conservative 00:01:25.099 --> 00:01:27.739 think tanks, corporate earnings reports, nonpartisan 00:01:27.739 --> 00:01:31.060 economists. That's a lot. It's a ton. So. Our 00:01:31.060 --> 00:01:34.180 job here is to just map out the reality of the 00:01:34.180 --> 00:01:35.859 math. We're gonna look at the economic mechanics 00:01:35.859 --> 00:01:38.340 of this movement, the structural arguments from 00:01:38.340 --> 00:01:41.000 both sides of the aisle, and just the raw data. 00:01:41.219 --> 00:01:43.760 We are absolutely not here to pick a political 00:01:43.760 --> 00:01:46.239 winner or endorse any specific left -wing or 00:01:46.239 --> 00:01:47.819 right -wing views. We're just reporting what's 00:01:47.819 --> 00:01:50.629 in the material. Exactly. Just strictly the facts. 00:01:51.189 --> 00:01:53.569 So, okay, let's unpack this. To understand the 00:01:53.569 --> 00:01:55.409 sheer scale of where this movement is today, 00:01:55.510 --> 00:01:56.930 we kind of have to look at where the match was 00:01:56.930 --> 00:01:59.189 struck. Yeah, back to the beginning. Right. We're 00:01:59.189 --> 00:02:03.170 going back to November 29th, 2012. New York City. 00:02:04.189 --> 00:02:07.349 Over a hundred fast food workers from major chains. 00:02:08.370 --> 00:02:10.590 So, you know, McDonald's, Burger King, Wendy's, 00:02:10.710 --> 00:02:12.250 they basically just walked off the job. And it's 00:02:12.250 --> 00:02:15.169 really crucial to look at the specific anatomy 00:02:15.169 --> 00:02:17.370 of that walkout. because the demands weren't 00:02:17.370 --> 00:02:20.430 just this vague call for better pay. Right. They 00:02:20.430 --> 00:02:23.530 had a plan. Exactly. The organizers had three 00:02:23.530 --> 00:02:26.509 highly specific pillars. They wanted a $15 an 00:02:26.509 --> 00:02:29.349 hour baseline. They wanted better working conditions. 00:02:29.509 --> 00:02:31.789 And they demanded the right to form a union without 00:02:31.789 --> 00:02:34.449 facing any retaliation from management. Which 00:02:34.449 --> 00:02:37.430 is a huge ask. Huge. And the catalyst for this 00:02:37.430 --> 00:02:40.189 wasn't just the $7 and 25 fives rate itself. 00:02:40.370 --> 00:02:42.389 It was the reality of what was actually happening 00:02:42.389 --> 00:02:44.370 on the floor. I mean, many of these workers were 00:02:44.370 --> 00:02:47.110 dealing with widespread allegations of wage theft. 00:02:47.250 --> 00:02:49.430 Oh man, yeah. Let's actually define what wage 00:02:49.430 --> 00:02:51.310 theft looks like in that specific environment. 00:02:51.409 --> 00:02:53.610 Yeah, please do. Because it's not always someone 00:02:53.610 --> 00:02:55.669 literally reaching into a cash register and taking 00:02:55.669 --> 00:02:59.169 money. It's structural. It's a manager telling 00:02:59.169 --> 00:03:02.509 an employee to officially clock out at 10 p .m. 00:03:02.789 --> 00:03:05.490 so the company avoids paying overtime, but then 00:03:05.490 --> 00:03:07.509 they require them to stay and mop the floors 00:03:07.509 --> 00:03:10.090 for another 45 minutes. Which is just... Yeah, 00:03:10.210 --> 00:03:12.650 it's brutal. Totally. And when you're operating 00:03:12.650 --> 00:03:15.789 at the absolute legal minimum wage, working off 00:03:15.789 --> 00:03:18.870 the clock like that pushes your actual hourly 00:03:18.870 --> 00:03:21.990 take home pay down to effectively like six or 00:03:21.990 --> 00:03:24.340 five dollars an hour. Right. It fundamentally 00:03:24.340 --> 00:03:26.919 breaks the math of survival. Like, the sources 00:03:26.919 --> 00:03:29.199 highlight this data from MIT where they calculate 00:03:29.199 --> 00:03:31.159 a regional living wage. Oh, yeah, the bare minimum 00:03:31.159 --> 00:03:33.460 to survive. Exactly. The bare minimum required 00:03:33.460 --> 00:03:36.000 just to cover food, housing, and transportation. 00:03:36.460 --> 00:03:39.060 And in a place like New York City, fast food 00:03:39.060 --> 00:03:41.819 wages were so far below that threshold that workers 00:03:41.819 --> 00:03:43.840 holding down multiple jobs were still qualifying 00:03:43.840 --> 00:03:46.280 for and relying on government assistance programs 00:03:46.280 --> 00:03:50.020 like food stamps just to survive. And that economic 00:03:50.020 --> 00:03:52.360 strain, it just created a powder keg. Oh, absolutely. 00:03:52.680 --> 00:03:56.620 And this initial 2012 walkout, it really seized 00:03:56.620 --> 00:04:00.400 on this growing public frustration with economic 00:04:00.400 --> 00:04:03.840 inequality, which had been dominating the cultural 00:04:03.840 --> 00:04:05.719 conversation since Occupy Wall Street. Right. 00:04:05.819 --> 00:04:08.919 The timing was perfect. It was. And it snowballed. 00:04:08.939 --> 00:04:13.219 By April 2015, tens of thousands of workers in 00:04:13.219 --> 00:04:16.639 over 200 cities were protesting. Labor organizers 00:04:16.639 --> 00:04:19.680 described it as the largest protest by low -wage 00:04:19.680 --> 00:04:23.050 workers in U .S. history. It's like, it's like 00:04:23.050 --> 00:04:24.970 running on a treadmill where the belt keeps speeding 00:04:24.970 --> 00:04:27.389 up, but your legs are only allowed to move at 00:04:27.389 --> 00:04:30.089 a 2009 pace. That's a great way to put it. And 00:04:30.089 --> 00:04:31.970 the tactical shift here is actually what caught 00:04:31.970 --> 00:04:34.769 the attention of labor historians. Like, uh, 00:04:34.850 --> 00:04:37.170 Gary Chason, he's an industrial relations professor 00:04:37.170 --> 00:04:39.410 cited in our research. What did he say? Well, 00:04:39.410 --> 00:04:41.170 he pointed out that traditional labor strikes 00:04:41.170 --> 00:04:43.730 usually operate defensively, right? Like, they're 00:04:43.730 --> 00:04:45.689 initiated by a group of workers who already have 00:04:45.689 --> 00:04:47.269 a union. Right, they already have a collective 00:04:47.269 --> 00:04:49.649 bargaining agreement. Exactly. And they're striking 00:04:49.649 --> 00:04:52.550 to protect or incre... improve their existing 00:04:52.550 --> 00:04:55.920 castle. But the fight for $15 wasn't about protecting 00:04:55.920 --> 00:04:58.519 a castle. It was about trying to build one for 00:04:58.519 --> 00:05:00.560 people on the absolute fringe of the economy. 00:05:01.019 --> 00:05:02.680 Precisely. I mean, it was a community -based 00:05:02.680 --> 00:05:05.300 organizing effort aimed at an industry with notoriously 00:05:05.300 --> 00:05:08.139 high turnover. And traditional unionizing and 00:05:08.139 --> 00:05:10.879 fast food is incredibly difficult. Almost impossible. 00:05:11.100 --> 00:05:14.040 Yeah. So chase on, liken the tactics much more 00:05:14.040 --> 00:05:16.600 to the civil rights movement than to, like, a 00:05:16.600 --> 00:05:19.139 20th century autoworker strike. Wow. And you 00:05:19.139 --> 00:05:21.399 could really see that merging of tactics on the 00:05:21.399 --> 00:05:23.120 streets, couldn't you? Definitely. I mean, it 00:05:23.120 --> 00:05:25.939 evolved far past standard picket lines. They 00:05:25.939 --> 00:05:28.459 were doing sit -ins and calculated acts of civil 00:05:28.459 --> 00:05:33.399 disobedience. And by late 2014, these labor strikes 00:05:33.399 --> 00:05:35.920 were actively intertwining with broader civil 00:05:35.920 --> 00:05:38.699 rights protests. You had fast food workers chanting, 00:05:39.019 --> 00:05:41.339 15 in the union, marching shoulder to shoulder 00:05:41.339 --> 00:05:43.160 with Black Lives Matter protesters chanting, 00:05:43.680 --> 00:05:46.199 I can't breathe. Right. The underlying message 00:05:46.199 --> 00:05:49.139 really became this unified argument about systemic 00:05:49.139 --> 00:05:52.379 devaluation, you know, who society protects and 00:05:52.379 --> 00:05:55.589 who it just leaves exposed. Yeah. But that structural 00:05:55.589 --> 00:05:57.930 exposure isn't just isolated to the United States. 00:05:58.310 --> 00:06:01.050 No, not at all. Once that protest blueprint was 00:06:01.050 --> 00:06:02.889 proven effective in places like New York and 00:06:02.889 --> 00:06:06.189 Chicago, it went global. And it happened so quickly 00:06:06.189 --> 00:06:09.230 because the fast food industry relies on a franchise 00:06:09.230 --> 00:06:11.980 model. Right. Exactly. The corporate structure 00:06:11.980 --> 00:06:14.639 dictating labor costs in a Chicago drive -thru 00:06:14.639 --> 00:06:17.519 is largely the exact same corporate structure 00:06:17.519 --> 00:06:20.220 dictating operations in London or Tokyo. It's 00:06:20.220 --> 00:06:22.680 the same machine. Right. The movement effectively 00:06:22.680 --> 00:06:27.420 franchised itself. By May 2014, strikes hit 230 00:06:27.420 --> 00:06:30.720 cities globally. But what I find fascinating 00:06:30.720 --> 00:06:33.540 is how workers in different countries took the 00:06:33.540 --> 00:06:37.120 $15 framework and adapted it to their own kind 00:06:37.120 --> 00:06:39.870 of localized economic friction. Yeah, and the 00:06:39.870 --> 00:06:42.250 UK is a prime example of that. McDonald's workers 00:06:42.250 --> 00:06:44.310 there weren't just protesting the hourly rate. 00:06:44.370 --> 00:06:46.189 They were really protesting the mechanism of 00:06:46.189 --> 00:06:48.170 how they were scheduled. Oh, right. The contracts. 00:06:48.430 --> 00:06:51.629 Yes. They rallied against what are known as zero 00:06:51.629 --> 00:06:54.589 hours contracts. And an estimated 90 percent 00:06:54.589 --> 00:06:56.589 of UK McDonald's workers at the time were on 00:06:56.589 --> 00:06:58.529 these contracts. Which, I mean, is a brilliant 00:06:58.529 --> 00:07:00.470 mechanism for a corporation to mitigate risk, 00:07:00.550 --> 00:07:02.670 but it's absolutely devastating for a worker. 00:07:03.069 --> 00:07:05.110 A zero hours contract means you are officially 00:07:05.110 --> 00:07:08.550 employed. But the company is not legally obligated 00:07:08.550 --> 00:07:11.449 to give you a single hour of work in any given 00:07:11.449 --> 00:07:14.389 week Yeah, it transfers the entirety of the business 00:07:14.389 --> 00:07:17.430 risk on to the lowest paid employee Like if it 00:07:17.430 --> 00:07:19.689 rains and the restaurant is slow you get sent 00:07:19.689 --> 00:07:22.019 home and you don't get paid Wow. But you also 00:07:22.019 --> 00:07:24.680 can't easily get a second job because you're 00:07:24.680 --> 00:07:26.980 required to remain available in case your manager 00:07:26.980 --> 00:07:29.839 calls you in. That's crazy. So the UK workers 00:07:29.839 --> 00:07:33.139 adapted the chant to zero hours, no way. That 00:07:33.139 --> 00:07:36.160 makes total sense. And we saw similar solidarity 00:07:36.160 --> 00:07:38.839 flare ups everywhere. In the Philippines, workers 00:07:38.839 --> 00:07:41.420 held flash mobs in Manila demanding corporate 00:07:41.420 --> 00:07:43.819 let it go of low wages. Singing the Disney song, 00:07:43.819 --> 00:07:46.500 yeah. Right. And protests in Japan demanded a 00:07:46.500 --> 00:07:49.379 baseline of 1 ,500 yen to mirror the American 00:07:49.379 --> 00:07:52.490 $15 demand. Yeah, but you know whenever this 00:07:52.490 --> 00:07:54.949 global perspective comes up you inevitably see 00:07:54.949 --> 00:07:57.730 labor advocates point to Scandinavia They look 00:07:57.730 --> 00:08:00.850 at Denmark and say look Denmark has incredibly 00:08:00.850 --> 00:08:04.509 high wage floors Powerful unions and fast food 00:08:04.509 --> 00:08:07.470 giants still operate profitably there. It proves 00:08:07.470 --> 00:08:11.189 the American model is just greedy Wait, can we 00:08:11.189 --> 00:08:14.129 really just copy paste a Scandinavian economic 00:08:14.129 --> 00:08:16.649 model into the American fast food industry? Okay, 00:08:16.670 --> 00:08:19.079 here's where it gets really interesting because 00:08:19.079 --> 00:08:21.879 the economic analysis requires us to look past 00:08:21.879 --> 00:08:25.740 that surface comparison. Stephen Caldera, he's 00:08:25.740 --> 00:08:28.139 the CEO of the International Franchise Association, 00:08:28.740 --> 00:08:31.639 he pushed back hard on that exact narrative in 00:08:31.639 --> 00:08:33.659 our sources. What's his argument? He argued that 00:08:33.659 --> 00:08:35.399 comparing the fast food industry in Denmark to 00:08:35.399 --> 00:08:37.639 the United States is like comparing apples to 00:08:37.639 --> 00:08:39.919 autos. Apples to autos, huh. Because you can't 00:08:39.919 --> 00:08:42.480 just... copy paste a Scandinavian economic model 00:08:42.480 --> 00:08:44.399 onto a different continent and expect the exact 00:08:44.399 --> 00:08:47.000 same results. The underlying structural machinery 00:08:47.000 --> 00:08:49.779 is entirely different. Exactly. That is the core 00:08:49.779 --> 00:08:52.379 of his argument. To maintain profitability with 00:08:52.379 --> 00:08:55.100 those high Danish wages, restaurants in Denmark 00:08:55.100 --> 00:08:57.480 operate with fundamentally different mechanics. 00:08:57.639 --> 00:09:00.259 Well, they employ fewer people per location, 00:09:00.360 --> 00:09:03.379 for one, and they rely much more heavily on automated 00:09:03.379 --> 00:09:05.480 systems to take orders and process payments. 00:09:05.779 --> 00:09:08.059 Right. So, yes, the workers who do have jobs 00:09:08.059 --> 00:09:11.039 are paid significantly more, but the industry 00:09:11.039 --> 00:09:14.320 itself absorbs far less of the entry level workforce 00:09:14.320 --> 00:09:16.919 than it does in the US. Which brings us directly 00:09:16.919 --> 00:09:19.139 to the front lines of the American economy. Because 00:09:19.139 --> 00:09:21.019 when we talk about the federal minimum wage, 00:09:21.440 --> 00:09:24.460 we're largely talking about a few specific massive 00:09:24.460 --> 00:09:27.360 industries that serves the entry point for millions 00:09:27.360 --> 00:09:29.960 of Americans. Right. Let's look at the restaurant 00:09:29.960 --> 00:09:32.600 and food service sector. According to the Bureau 00:09:32.600 --> 00:09:35.840 of Labor Statistics data from 2018, this sector 00:09:35.840 --> 00:09:38.340 alone employs about 60 percent of all workers 00:09:38.340 --> 00:09:41.259 paid at or below the minimum wage. Yeah. And 00:09:41.259 --> 00:09:43.840 within that 60%, you find one of the most contentious 00:09:43.840 --> 00:09:46.539 mechanisms in American labor law, the tipped 00:09:46.539 --> 00:09:49.220 minimum wage. Under federal law, employers are 00:09:49.220 --> 00:09:51.759 allowed to pay wait staff, bartenders, and other 00:09:51.759 --> 00:09:55.320 tipped workers a baseline of just $2 .13 an hour. 00:09:55.899 --> 00:09:58.860 $2 .13. Let's map out how that tip credit is 00:09:58.860 --> 00:10:00.460 actually supposed to work. because it sounds 00:10:00.460 --> 00:10:03.879 insane. Yeah, please. The idea is that the customer's 00:10:03.879 --> 00:10:06.139 tips will bridge the gap between that $2 .13 00:10:06.139 --> 00:10:10.279 and the standard $7 .25 minimum wage. And if 00:10:10.279 --> 00:10:13.039 a waiter has a slow shift and the tips don't 00:10:13.039 --> 00:10:16.139 bridge that cap, the employer is legally required 00:10:16.139 --> 00:10:18.000 to make up the difference out of their own pocket. 00:10:18.419 --> 00:10:21.379 So the worker still hit $7 .25. Well, in theory, 00:10:21.639 --> 00:10:24.190 yes. Right. in theory. But in practice, advocates 00:10:24.190 --> 00:10:26.110 within the movement argue it's just a breeding 00:10:26.110 --> 00:10:28.889 ground for exploitation. The enforcement of that 00:10:28.889 --> 00:10:31.889 employer makeup pay is notoriously lax. Right. 00:10:32.090 --> 00:10:34.250 Furthermore, relying on the arbitrary goodwill 00:10:34.250 --> 00:10:36.730 of customers for the bulk of your income creates 00:10:36.730 --> 00:10:39.970 massive wage instability, and it often forces 00:10:39.970 --> 00:10:42.769 workers to tolerate harassment from patrons just 00:10:42.769 --> 00:10:45.169 to secure their livelihood. So scrapping this 00:10:45.169 --> 00:10:47.690 dual wage system entirely became a central pillar 00:10:47.690 --> 00:10:50.009 of the $15 movement. OK, then you look at the 00:10:50.009 --> 00:10:53.230 retail sector. Over a 11 million workers. And 00:10:53.230 --> 00:10:55.230 this is where the narrative shifts from protest 00:10:55.230 --> 00:10:57.350 to corporate strategy. Yeah, big time. Major 00:10:57.350 --> 00:11:00.090 retail giants like Target, Best Buy, and Amazon, 00:11:00.490 --> 00:11:02.250 they didn't wait for Congress to pass a federal 00:11:02.250 --> 00:11:04.950 law. They voluntarily raised their internal minimum 00:11:04.950 --> 00:11:07.529 wages to $15 an hour. They did. So if I'm playing 00:11:07.529 --> 00:11:10.330 devil's advocate here, looking at Amazon making 00:11:10.330 --> 00:11:13.429 that move, it raises the question, if massive 00:11:13.429 --> 00:11:16.610 retail giants like Amazon and Target are voluntarily 00:11:16.610 --> 00:11:19.370 bumping their pay to $15, doesn't that prove 00:11:19.370 --> 00:11:22.250 the market is fixing itself? Why push for a federal 00:11:22.250 --> 00:11:25.070 law at this point? Yeah, I mean, it's absolutely. 00:11:25.210 --> 00:11:27.149 And the health care industry is perhaps the most 00:11:27.149 --> 00:11:31.009 glaring example of those gaps. As of 2019, health 00:11:31.009 --> 00:11:34.370 care employed roughly 18 .6 million workers. 00:11:35.029 --> 00:11:37.730 But nearly 7 million of those people were in 00:11:37.730 --> 00:11:40.509 low -paid support and service roles. The median 00:11:40.509 --> 00:11:43.049 wage for direct care workers and medical support 00:11:43.049 --> 00:11:47.730 staff was just $13 .48 an hour. Wow. The market 00:11:47.730 --> 00:11:50.350 wasn't fixing it for them. We are talking about 00:11:50.350 --> 00:11:52.549 the people physically keeping nursing homes. 00:11:52.620 --> 00:11:55.659 and hospitals functioning vastly separated from 00:11:55.659 --> 00:11:57.679 the high -earning doctors and administrators 00:11:57.679 --> 00:11:59.820 in the same facilities. Right. And because a 00:11:59.820 --> 00:12:02.399 federal shift was stalled in Congress and corporate 00:12:02.399 --> 00:12:04.720 efficiency wages only covered a fraction of the 00:12:04.720 --> 00:12:07.279 workforce, the movement had to pivot. Yeah, they 00:12:07.279 --> 00:12:09.240 changed tactics. They realized that if they couldn't 00:12:09.240 --> 00:12:11.159 change the federal law, they would just redraw 00:12:11.159 --> 00:12:14.059 the map of America, city by city, state by state. 00:12:14.299 --> 00:12:16.480 Yeah. And the initial testing ground for this 00:12:16.480 --> 00:12:19.259 localized strategy was CTAC. It's the Small Suburban 00:12:19.259 --> 00:12:21.500 Community built right around the Seattle, Tacoma 00:12:21.500 --> 00:12:25.019 International Airport. In 2014, voters narrowly 00:12:25.019 --> 00:12:26.919 passed a measure that raised the local minimum 00:12:26.919 --> 00:12:29.139 wage for transportation and hospitality workers 00:12:29.139 --> 00:12:32.539 directly to $15 an hour. Wait, immediately? Immediate. 00:12:32.919 --> 00:12:35.299 No drawn -out phase in over 10 years, just an 00:12:35.299 --> 00:12:37.600 immediate leap. Man, that was a massive shock 00:12:37.600 --> 00:12:40.440 to the system, and it provided a real -time economic 00:12:40.440 --> 00:12:43.320 laboratory. Shortly after, The city of Seattle 00:12:43.320 --> 00:12:45.879 followed suit, becoming the first major U .S. 00:12:46.000 --> 00:12:49.080 metropolis to pass a pathway to $15. Right. And 00:12:49.080 --> 00:12:51.799 it was driven by a highly organized coalition 00:12:51.799 --> 00:12:55.179 of labor unions, faith groups and local politicians. 00:12:55.500 --> 00:12:57.440 And that was really the domino that broke the 00:12:57.440 --> 00:12:59.899 dam. The momentum shifted from being a fringe 00:12:59.899 --> 00:13:03.320 protest demand to mainstream state legislation. 00:13:03.379 --> 00:13:05.799 Yeah, it really did. The statistics in our sources 00:13:05.799 --> 00:13:09.340 point to a staggering geographic reality. By 00:13:09.340 --> 00:13:13.579 2027, due to laws already passed in including 00:13:13.579 --> 00:13:16.019 massive economies like California, New York, 00:13:16.720 --> 00:13:18.080 Massachusetts, and Florida, along with Washington, 00:13:18.120 --> 00:13:21.200 D .C., and factoring in automatic inflation adjustments. 00:13:21.659 --> 00:13:24.080 48 % of the entire country will be operating 00:13:24.080 --> 00:13:27.200 under a $15 minimum wage. Almost half the country 00:13:27.200 --> 00:13:29.240 operating on a completely different wage floor 00:13:29.240 --> 00:13:31.419 than the federal standard. The economic impact 00:13:31.419 --> 00:13:34.620 is undeniable. Estimates suggest that since the 00:13:34.620 --> 00:13:37.580 movement began, roughly 26 million workers have 00:13:37.580 --> 00:13:41.059 gained $151 billion in raises. That's a lot of 00:13:41.059 --> 00:13:44.419 money. It is. But when you apply a blanket dollar 00:13:44.419 --> 00:13:47.220 amount over a deeply diverse map of local economies, 00:13:47.820 --> 00:13:50.399 you create friction. And to manage that friction, 00:13:51.000 --> 00:13:52.960 lawmakers write in exceptions. Yeah, you see 00:13:52.960 --> 00:13:55.240 this heavily in states trying to balance rural 00:13:55.240 --> 00:13:57.940 and urban economic realities. Like, New Jersey 00:13:57.940 --> 00:14:01.320 passed legislation to reach $15 an hour by 2024, 00:14:01.879 --> 00:14:04.179 but they explicitly carved out farm workers. 00:14:04.539 --> 00:14:07.100 Really? Yeah. Agricultural labor is capped at 00:14:07.100 --> 00:14:09.820 a $12 .50 minimum wage to protect the profitability 00:14:09.820 --> 00:14:12.700 of the state's farming sector. Which, I mean... 00:14:12.480 --> 00:14:14.419 It makes logical, if uncomfortable, political 00:14:14.419 --> 00:14:16.940 sense. But there is one exception hidden in the 00:14:16.940 --> 00:14:19.399 fine print of local laws in places like Chicago, 00:14:19.600 --> 00:14:22.039 Los Angeles, and San Francisco that completely 00:14:22.039 --> 00:14:24.740 threw me. Oh, the union carve -outs. Yes. In 00:14:24.740 --> 00:14:27.460 these cities, labor unions can be legally exempted 00:14:27.460 --> 00:14:30.200 from the $15 minimum wage mandate. OK, hold on. 00:14:30.559 --> 00:14:33.759 The whole chant is 15 and a union. Why on earth 00:14:33.759 --> 00:14:35.759 would a union legally exempt itself from the 00:14:35.759 --> 00:14:37.960 very wage increase it's fighting for? I know. 00:14:37.960 --> 00:14:40.039 It seems like a betrayal of the core premise. 00:14:40.179 --> 00:14:42.169 Completely paradoxical. But when you look at 00:14:42.169 --> 00:14:44.629 the mechanics of labor organizing, it's actually 00:14:44.629 --> 00:14:47.750 a highly calculated structural weapon. These 00:14:47.750 --> 00:14:49.649 exemptions are written into the legislation to 00:14:49.649 --> 00:14:52.409 act as leverage. OK, how? Well, imagine you're 00:14:52.409 --> 00:14:55.509 a hotel owner in Los Angeles. The city mandates 00:14:55.509 --> 00:14:58.789 you pay every employee $15 an hour. That raises 00:14:58.789 --> 00:15:01.789 your overhead significantly. However, the law 00:15:01.789 --> 00:15:04.929 provides a loophole. If you agree to sit down 00:15:04.929 --> 00:15:07.830 with a labor union and sign a collective bargaining 00:15:07.830 --> 00:15:10.750 agreement, you are legally allowed to negotiate 00:15:10.600 --> 00:15:14.960 a starting wage of, say, $14 an hour. I see the 00:15:14.960 --> 00:15:17.539 mechanism. The city is artificially creating 00:15:17.539 --> 00:15:20.200 a financial incentive for the employer to welcome 00:15:20.200 --> 00:15:22.440 a union. Exactly. The business gets a slight 00:15:22.440 --> 00:15:24.840 discount on their labor costs to ease the shock 00:15:24.840 --> 00:15:26.879 of the mandate, and the union suddenly gains 00:15:26.879 --> 00:15:29.279 access to a workplace that might have spent millions 00:15:29.279 --> 00:15:31.559 of dollars union busting the year before. Right. 00:15:31.820 --> 00:15:34.059 They trade a dollar on the hourly rate to secure 00:15:34.059 --> 00:15:36.759 health care benefits, grievance procedures, and 00:15:36.759 --> 00:15:39.889 long -term bargaining power. Exactly. It uses 00:15:39.889 --> 00:15:42.889 the heavy hand of municipal law to force employers 00:15:42.889 --> 00:15:46.289 to the negotiating table. But, you know, as fascinating 00:15:46.289 --> 00:15:48.649 as these localized strategies are, a patchwork 00:15:48.649 --> 00:15:51.370 of state laws inevitably leads to border bleed. 00:15:51.509 --> 00:15:53.789 Right. Where businesses just move across county 00:15:53.789 --> 00:15:57.009 lines to avoid the wage hikes. Yeah. Which naturally 00:15:57.009 --> 00:15:59.850 leads us to the ultimate battleground. The push 00:15:59.850 --> 00:16:02.250 for a blanket federal law. And this is where 00:16:02.250 --> 00:16:04.529 the economic modeling gets incredibly intense. 00:16:05.000 --> 00:16:07.039 The centerpiece of this debate in our sources 00:16:07.039 --> 00:16:10.259 is the February 2021 report from the nonpartisan 00:16:10.259 --> 00:16:14.120 Congressional Budget Office, the CBO. Yes. They 00:16:14.120 --> 00:16:17.379 analyzed the proposed Raise the Wage Act, which 00:16:17.379 --> 00:16:19.500 would have incrementally lifted the federal floor 00:16:19.500 --> 00:16:23.539 to $15 by 2025. And the CBO ledger presents a 00:16:23.539 --> 00:16:25.659 really stark tradeoff. Let's look at the side 00:16:25.659 --> 00:16:28.080 of the ledger detailing the benefits first. The 00:16:28.080 --> 00:16:30.820 agency projected that a $15 federal wage would 00:16:30.820 --> 00:16:34.120 directly boost the paychecks of 17 million workers. 00:16:34.350 --> 00:16:36.750 That's massive. Furthermore, it would lift 900 00:16:36.750 --> 00:16:38.990 ,000 people entirely above the poverty line. 00:16:39.450 --> 00:16:41.090 We're talking about nearly a million Americans 00:16:41.090 --> 00:16:43.269 gaining enough capital to secure stable housing 00:16:43.269 --> 00:16:46.429 and food. But the other side of the CBO ledger 00:16:46.429 --> 00:16:49.149 shows the structural cost of doing that. It's 00:16:49.149 --> 00:16:51.950 like trying to set a single uniform speed limit 00:16:51.950 --> 00:16:54.990 for both a congested school zone in Manhattan 00:16:54.990 --> 00:16:58.830 and a barren highway in Montana. The policy just 00:16:58.830 --> 00:17:01.950 doesn't fit every environment. The CBO estimated 00:17:01.950 --> 00:17:04.289 that a blanket federal wage hike would result 00:17:04.289 --> 00:17:08.740 in the loss of 1 .4 million jobs. The mechanism 00:17:08.740 --> 00:17:11.059 behind those job losses varies. I mean, some 00:17:11.059 --> 00:17:13.319 small businesses operating on razor thin margins 00:17:13.319 --> 00:17:15.680 and low cost of living states would simply close. 00:17:16.299 --> 00:17:18.259 Others would reduce the hours of their staff 00:17:18.259 --> 00:17:20.740 to keep payroll flat. Right. And crucially, the 00:17:20.740 --> 00:17:22.960 CDO projected that this wage hike would increase 00:17:22.960 --> 00:17:26.240 the federal budget deficit by $54 billion over 00:17:26.240 --> 00:17:28.900 a 10 year window. OK, that specific number stood 00:17:28.900 --> 00:17:30.900 out to me. Why does the federal government lose 00:17:30.900 --> 00:17:34.299 $54 billion by making private companies pay their 00:17:34.299 --> 00:17:37.059 workers more? It's a great question. Because 00:17:37.059 --> 00:17:38.839 the government is actually one of the largest 00:17:38.839 --> 00:17:41.019 purchasers of goods and services in the economy. 00:17:41.259 --> 00:17:43.680 Oh, interesting. Think about health care. The 00:17:43.680 --> 00:17:46.160 federal government funds Medicare and Medicaid, 00:17:46.599 --> 00:17:49.359 which pay for services at nursing homes and hospitals. 00:17:50.039 --> 00:17:52.680 Those facilities employ millions of the low -wage 00:17:52.680 --> 00:17:55.519 workers we discussed earlier. Ah, I see. Right, 00:17:55.640 --> 00:17:57.480 so if the government mandates those workers get 00:17:57.480 --> 00:18:00.559 a raise to $15 an hour, the cost of operating 00:18:00.559 --> 00:18:02.980 those nursing homes goes up. Which means the 00:18:02.980 --> 00:18:05.039 nursing homes charge Medicare more for their 00:18:05.039 --> 00:18:07.839 services. And the cost gets passed directly back 00:18:07.839 --> 00:18:11.079 to the federal budget. Exactly. The CBO also 00:18:11.079 --> 00:18:13.940 noted it would drive up prices for general consumers 00:18:13.940 --> 00:18:17.099 and slightly drag down overall economic output. 00:18:17.359 --> 00:18:19.480 It sounds like a giant economic game of whack 00:18:19.480 --> 00:18:21.559 -a -mole. Yeah. You know, you smash the poverty 00:18:21.559 --> 00:18:24.279 mole over here, but a job loss mole pops up right 00:18:24.279 --> 00:18:26.240 next to it, and suddenly the machine is asking 00:18:26.240 --> 00:18:29.539 for $54 billion. Yeah, that's the CBO's view, 00:18:29.539 --> 00:18:32.079 but the CBO is just one model. Right. We have 00:18:32.079 --> 00:18:34.319 prominent economists looking at the exact same 00:18:34.319 --> 00:18:37.660 economy and arguing the CBO's math is fundamentally 00:18:37.660 --> 00:18:40.960 backwards. Like Michael Reich. Yes. Michael Reich, 00:18:41.180 --> 00:18:44.240 an economist at UC Berkeley. He argues that instead 00:18:44.240 --> 00:18:47.519 of blowing a $54 billion hole in the deficit, 00:18:47.940 --> 00:18:50.740 a $15 federal wage would actually generate a 00:18:50.740 --> 00:18:54.039 net gain of $65 billion in federal tax revenue 00:18:54.039 --> 00:18:57.559 annually. Wait, again, how does that work? Well, 00:18:57.559 --> 00:18:59.700 Reich's mechanism focuses on the velocity of 00:18:59.700 --> 00:19:02.029 money and the social safety net. When you give 00:19:02.029 --> 00:19:04.829 a massive raise to a low -income worker, they 00:19:04.829 --> 00:19:07.009 don't put that money into an offshore savings 00:19:07.009 --> 00:19:09.190 account. Right, they spend it. They spend it 00:19:09.190 --> 00:19:12.190 immediately on groceries, car repairs, and rent, 00:19:12.529 --> 00:19:15.029 injecting it directly back into the local economy. 00:19:15.789 --> 00:19:17.490 Furthermore, Reich points out that if workers 00:19:17.490 --> 00:19:20.250 are making $15 an hour, millions of them will 00:19:20.250 --> 00:19:22.630 no longer qualify for federal assistance programs 00:19:22.630 --> 00:19:25.690 like SNA, the food stamp program. Oh, so the 00:19:25.690 --> 00:19:27.730 government spends drastically less on welfare. 00:19:28.130 --> 00:19:30.349 Exactly, while simultaneously collecting significantly 00:19:30.349 --> 00:19:32.589 more in payroll taxes from those higher wages. 00:19:32.670 --> 00:19:34.410 That makes a lot of sense. Yeah. And you also 00:19:34.410 --> 00:19:36.769 have researchers like Arundhra Jitdube looking 00:19:36.769 --> 00:19:40.390 at the CBO's claim of 1 .4 million lost jobs 00:19:40.390 --> 00:19:43.250 and arguing that the number is highly exaggerated 00:19:43.250 --> 00:19:46.069 by analyzing international data. and border county 00:19:46.069 --> 00:19:48.910 studies comparing a county that raised its wage 00:19:48.910 --> 00:19:52.930 to a neighboring county that didn't. Dubay estimated 00:19:52.930 --> 00:19:55.990 the actual job loss would be under 500 ,000. 00:19:56.029 --> 00:19:58.809 Which is a huge difference. It is. So the foremost 00:19:58.809 --> 00:20:01.509 economic minds in the country literally cannot 00:20:01.509 --> 00:20:04.230 agree on the math. But there is one variable 00:20:04.230 --> 00:20:06.910 in this equation that everyone agrees is accelerating. 00:20:07.009 --> 00:20:10.190 The machines. The machines. Capital labor substitution. 00:20:10.630 --> 00:20:13.990 Or, in simpler terms, automation. Yeah. Ed Renzi, 00:20:14.109 --> 00:20:16.170 the former CEO of McDonald's, has been highly 00:20:16.170 --> 00:20:18.769 vocal in our sources about this. He explicitly 00:20:18.769 --> 00:20:21.710 cited the Fight for $15 movement as the direct 00:20:21.710 --> 00:20:24.289 catalyst for the fast food industry rolling out 00:20:24.289 --> 00:20:27.049 automated ordering kiosks nationwide. Which is 00:20:27.049 --> 00:20:28.710 the classic corporate threat, right? If you demand 00:20:28.710 --> 00:20:30.390 too much money, we'll just replace you with a 00:20:30.390 --> 00:20:32.849 robot. It is a threat, but it's also a mathematical 00:20:32.849 --> 00:20:35.329 reality of capital investment. I mean, a touchscreen 00:20:35.329 --> 00:20:38.509 kiosk has a high upfront cost, but its amortized 00:20:38.509 --> 00:20:41.190 hourly cost over five years is fractions of a 00:20:41.190 --> 00:20:45.250 penny. Right. When human labor costs $7 .25 an 00:20:45.250 --> 00:20:47.809 hour, it might still be cheaper and more flexible 00:20:47.809 --> 00:20:50.450 to employ the human. But when you mandate human 00:20:50.450 --> 00:20:53.349 labor costs $15 an hour, you alter the calculus. 00:20:53.930 --> 00:20:56.109 Suddenly, the multi -million dollar investment 00:20:56.109 --> 00:20:59.289 in AI drive thrusts, automated fryers, and self 00:20:59.289 --> 00:21:01.529 -driving delivery trucks becomes the cheaper 00:21:01.529 --> 00:21:04.950 option. It tips the scale. Exactly. Critics argue 00:21:04.950 --> 00:21:06.970 that artificially jacking up the minimum wage 00:21:06.970 --> 00:21:09.910 simply pulls the future forward, rapidly destroying 00:21:09.910 --> 00:21:12.170 entry -level jobs for low -skilled workers who 00:21:12.170 --> 00:21:14.509 aren't qualified to do anything else. And if 00:21:14.509 --> 00:21:16.329 you're relying on an entry -level job to feed 00:21:16.329 --> 00:21:19.450 your family, that capital substitution is terrifying. 00:21:19.849 --> 00:21:22.170 The robot doesn't need a union, it doesn't need 00:21:22.170 --> 00:21:24.670 sleep, and it doesn't get sick. No, it doesn't. 00:21:24.670 --> 00:21:26.789 And if we connect this to the bigger picture... 00:21:26.799 --> 00:21:29.240 When you look at the broader economic consensus 00:21:29.240 --> 00:21:32.240 on this, two very distinct philosophies emerge 00:21:32.240 --> 00:21:34.700 regarding how society should handle that transition. 00:21:34.960 --> 00:21:37.789 What are they? Well, on one side Sociologists 00:21:37.789 --> 00:21:40.569 and progressive economists view this rapid automation 00:21:40.569 --> 00:21:43.869 as the grim reaper of the working class. They 00:21:43.869 --> 00:21:46.450 argue that if low wage jobs are inevitably going 00:21:46.450 --> 00:21:48.670 to be automated out of existence just to preserve 00:21:48.670 --> 00:21:52.109 corporate profits, society needs entirely new 00:21:52.109 --> 00:21:54.730 radical safety nets. Like what? Universal basic 00:21:54.730 --> 00:21:58.750 income? Exactly, like UBI, to prevent mass destitution. 00:21:59.109 --> 00:22:01.089 But the other side of the argument views that 00:22:01.089 --> 00:22:04.089 exact same automation as a net positive for human 00:22:04.089 --> 00:22:06.940 progress. They do. Many economists argue that 00:22:06.940 --> 00:22:09.220 automation is a natural and necessary evolution 00:22:09.220 --> 00:22:12.559 that increases overall labor productivity. In 00:22:12.559 --> 00:22:15.160 their view, utilizing human potential for highly 00:22:15.160 --> 00:22:18.059 repetitive, low skill tasks is inherently inefficient. 00:22:18.660 --> 00:22:20.740 When machines take over the friars and the cash 00:22:20.740 --> 00:22:23.299 registers, it forces the labor market to evolve. 00:22:23.519 --> 00:22:26.059 ultimately shifting human workers toward higher 00:22:26.059 --> 00:22:28.740 value, higher paying tasks that require empathy, 00:22:29.200 --> 00:22:31.700 complex problem -solving, and adaptability. Things 00:22:31.700 --> 00:22:33.920 AI currently struggles with. Exactly. Man, it 00:22:33.920 --> 00:22:36.779 is incredible to step back and look at the trajectory 00:22:36.779 --> 00:22:39.279 of the sources we've examined today. I mean, 00:22:39.359 --> 00:22:42.039 a little over a decade ago, a hundred fast food 00:22:42.039 --> 00:22:44.220 workers walked out of a few restaurants in New 00:22:44.220 --> 00:22:47.119 York City because the math of their daily survival 00:22:47.119 --> 00:22:50.579 was broken. Yeah. And that localized frustration 00:22:50.579 --> 00:22:53.210 ignited a tactical blueprint that re - shaped 00:22:53.210 --> 00:22:55.789 billions of dollars in wages, altered the payroll 00:22:55.789 --> 00:22:57.950 strategies of the largest corporations on earth, 00:22:58.369 --> 00:23:01.069 and forced lawmakers to confront the deeply complicated 00:23:01.069 --> 00:23:04.410 mechanics of how we value labor. It really is 00:23:04.410 --> 00:23:07.410 wild. And as we conclude this analysis, there 00:23:07.410 --> 00:23:09.869 is one final detail embedded near the end of 00:23:09.869 --> 00:23:11.710 our sources that kind of reframes this entire 00:23:11.710 --> 00:23:14.289 debate. We spent this whole time analyzing the 00:23:14.289 --> 00:23:17.390 fight for $15, but the text notes that as we 00:23:17.390 --> 00:23:20.009 push deeper into the 2020s, local organizers 00:23:20.009 --> 00:23:22.009 have already began shifting their picket signs. 00:23:22.170 --> 00:23:25.890 No way. Yeah. The fight for $15 has organically 00:23:25.890 --> 00:23:28.309 morphed into the fight for $20 in several major 00:23:28.309 --> 00:23:32.210 cities. Wow. I guess because $15 in 2012 money 00:23:32.210 --> 00:23:34.450 does not have the same purchasing power today. 00:23:35.230 --> 00:23:37.490 The treadmill bell just sped up again. It did. 00:23:37.789 --> 00:23:40.910 Which leaves you to ponder a really profound 00:23:40.910 --> 00:23:44.349 structural question. If the cost of living and 00:23:44.349 --> 00:23:47.569 inflation continuously outpace the speed of legislation, 00:23:48.150 --> 00:23:50.509 is the entire concept of a fixed dollar minimum 00:23:50.509 --> 00:23:53.069 wage fundamentally flawed? That's a great question. 00:23:53.250 --> 00:23:55.609 Are we relying on an economic mechanism that 00:23:55.609 --> 00:23:57.849 guarantees we will need a massive disruptive 00:23:57.849 --> 00:24:00.470 new protest movement every single decade just 00:24:00.470 --> 00:24:02.509 to bring the baseline back to zero? It really 00:24:02.509 --> 00:24:05.170 makes you wonder how long it will be until A 00:24:05.170 --> 00:24:07.829 piece of paper reading $15 an hour ends up buried 00:24:07.829 --> 00:24:10.349 in a time capsule, looking just as obsolete as 00:24:10.349 --> 00:24:12.849 a flip phone. Thank you for joining us on this 00:24:12.849 --> 00:24:15.029 deep dive. Keep questioning the systems around 00:24:15.029 --> 00:24:16.150 you, and we'll catch you next time.