Covid and the Minimum Wage: It Hurts

Covid caused a very odd thing: the working poor got a raise.

Via stimulus checks, federally funded jumps in unemployment payments, and looser state-based unemployment qualifications (specifically the inclusion of gig workers and independent contractors who weren’t before eligible for regular unemployment benefits) many Americans suddenly had money. It may still not have been much but it was closer to enough. People were not forced to work lousy jobs for lousy wages to enrich lousy people already wealthy enough to own spaceships.

Then another odd thing. As people were allowed to return to work, many didn’t. They were making more not working, math simple enough that in 25 states the federal supplement to unemployment was dropped so that unemployment again paid less than minimum wage. State governments forced people at economic gunpoint to accept soulless jobs. Meanwhile, in 21 states, the minimum wage is unchanged from ten years ago.

There were briefly two completely different systems in America, until the federal money ended in September: one which provided available funds, and one which withheld them to force Americans into low-paying jobs. Forcing people to work for less money than what feeds them is akin to slavery but economists may have a more modern term today.

Some misty years ago jobs that used to put minimum wage spending money into the hands of teenagers became a primary income source for adults. This sleight of hand hid that it is impossible to actually earn a living that way, with the federal minimum wage at $7.25. Keeping Americans in a state of semi-poverty (the “working poor”) has become a business model.

In 2011, as a forcibly retired older man I worked a number of minimum wage jobs, sweeping and stocking and silently accepting patron abuse. I can assure you the famous “Karens” of 2021 demanding to speak to the manager were already well-established then. I was the victim of their economically entitled wrath nearly daily, with my Caucasianess no shield.

I rolled those experiences under our apartheid of dollars into a book called The Ghosts of Tom Joad nobody read because Bernie had not yet told us it was okay to feel bad for the working white poor. Now, ten years later with our dual layered under-economy, it was time for me to take another look.

In Hawaii, where I live, restaurants and small businesses complained about a labor shortage even as the state with the nation’s strictest lockdown had the nation’s highest unemployment rate at 22 percent. I decided to check on this. Almost all of my applications were ghosted, meaning I never heard anything back. For the ones where I did learn more, here is what I found.

You need a hard shell against any notions of equality. One of the most expensive restaurants in town, where tabs run hundreds of dollars, offered $12 a hour for hosts to maintain their high standards for service and politeness while also maintaining the guest restrooms throughout the evening. Working there would not have been much different than the view out my window, where I can see a park that became a homeless encampment in front of a small harbor filled with superyachts the size of WWII destroyers.

No one cares too much about equal opportunity. I was told tourists expect to see a “local boy” in a role, not a white guy. I fielded lots of probably illegal questions related to my age, as well as a large scoop of techno-aggressions about things like whether I had a smartphone. Some ads openly asked for a woman server, or an attractive female assistant. One offered a job called “Beach Babe.”

Another ad said “We are looking for reliable, friendly, and customer service oriented hostesses to provide entertainment on our Adult Fun Boat. Individuals must be allowed of Fun [sic] and open minded nature. Compensation is commensurate of services provided.” Good to see, as in most third world nations, prostitution is still an option. Your employer is also your pimp, just like OnlyFans!

Some jobs were borderline criminal. One, selling timeshares, had a hyper-complex commission system such that I could have actually closed a sale and made no money. It was hard to tell if I’d be an employee, or just another mark. A doggy day care claimed I would get tips and so would be paid sub-minimum.

Another required my first hour’s wages daily for parking. A customer service job required me to first buy a logoed T-shirt for $15 and a $20 battery-powered old-timey lantern to fit their theming. Having to pay to work was a new thing since 2011. I felt like I was thirsty and all that was offered was a dentist’s spit cup.

One place said if I was a full-time student I would be paid only 85 percent of the minimum wage. A job at a tourist shooting range wanted two Asian languages, had eight hour shifts with no scheduled break, and required me to pick up lead. Another offer was minimum wage, but only half paid monthly. The other half was withheld for three months pending a manager’s decision it was deserved as a “bonus.” Unclear how much of this was legal, but what are you going to do, call 911?

There were also some nice people seeking to hire — polite, with a whattya ya gonna do attitude. But the difference between the overseer who beat his charges with pleasure and the one who was just doing his job is slight.

While I was asked to prove my vaccination status, not a single employer asked me to prove any claimed skills. The most common question — sometimes the only question — was, can you work Saturdays? And why not. The only real qualification was that I could do the job cheaper than a robot (three in ten small businesses automated job tasks during the pandemic.)

Some of the least attractive places to work were small owner-run restaurants. The expectation was that for low wages I would work like the entrepreneur himself, putting in the sweat equity. One owner complained about employees who whined over not being paid when closing ran late. He wanted me to subsidize his business with my free labor.

To him hard work represented unlimited potential, without realizing he structured my job to specifically not include any chance for a raise. There was no reason to do a good job today, and less to be better tomorrow. You can’t work “harder” because your salary is capped. The goal was to work just enough not to get fired. The reward was not having to apply for a new job at the burger hut across the street.

What Covid exposed us to is a terrible thing. The minimum wage allows employers of the under-economy to conspire to pay the same wage. If they fixed prices this way it would be illegal. Employers seem to have taken the bit, understanding how little choice workers have, and seem determined to make their job offering more terrible than the other guy’s.

It is hard to put into words how worthless you feel in this process. Your potential employer seems to hold you in contempt, if not see you as simply a john to be ripped off under the guise of hiring you. They understand and expect to be allowed to exploit labor, backed by the government holding down wages. Half the states embraced this a step further, cutting off supplements to assist in impoverishing their own citizens.

That’s why the government controls the minimum wage, to force you back in now that the Covid fat times are over. Life’s a function of how the scale is rigged, not weight.

“Minimum wage” has become maximum wage for a whole layer of our society. Businesses have little pressure to raise salaries because they hold all the aces — the government has their back with designated wages to ensure they don’t have to get into bidding wars for talent, and the labor market is rigged so that a large number of Americans have no choice but to take these jobs.

Want to know what happens next? The Supplemental Poverty Measure (SPM) which takes into account all government aid, fell to 9.1 percent in 2020, the lowest it has been since record keeping of the SPM began. Without taking government pandemic aid into account, poverty would have risen 11.4 percent.

Imagine the fun when you visit our paradise here in Hawaii knowing the person serving at your all-you-can-eat luau is hungry. And don’t forget to tip your waitress, she needs it.

Peter Van Buren is the author of We Meant Well: How I Helped Lose the Battle for the Hearts and Minds of the Iraqi People, Hooper’s War: A Novel of WWII Japan, and Ghosts of Tom Joad: A Story of the 99 Percent.

Author of Hooper’s War: A Novel of WWII Japan and WE MEANT WELL: How I Helped Lose the Battle for the Hearts + Minds of the Iraqi People