Rising costs of living are hurting LGBTQ+ people. Increasing the minimum wage can help.

Rising costs of living are hurting LGBTQ+ people. Increasing the minimum wage can help.
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Rising costs of living across the country are having significant effects on the LGBTQ+ community. Price increases have reached everything from gas to groceries – and even cocktails.

The increase in bar tabs has plagued the nightlife in various hotspots of Los Angeles’s LGBTQ+ enclave of West Hollywood (WeHo). When the space previously occupied by Gold Coast – a long-time gay dive catering to gays of a certain age – was filled by Or Bar in December, it was met with full-throated criticism from locals for charging $24 for cocktails.

But this is not an isolated event. The Abbey, arguably WeHo’s most prominent queer nightclub, has also raised the prices of its signature martinis.

While there are many factors attributing to rising costs, such as Covid-related disruptions in supply lines and Russia’s invasion of Ukraine, for The Abbey’s general manager Todd Barnes, the primary culprit is the city of West Hollywood’s recent increase in its minimum wage.

“Because of the minimum wage, starting next week, I’m actually going to be having a couple of cocktails that are at the $20 mark, which we’ve never had before,” said Barnes. “The average right now is about $18 for one of our martinis.”

As of January 1st, 2023, the hourly rate is now $18.35 for hotel employees, $17.50 for large business employees, and $17 for small business employees. Starting July 1st, 2023, these rates will increase again to $18.86 for all categories. By contrast, the minimum wage for the rest of California is $15.50 an hour. 

Full-time employees will receive at least 96 compensated hours and 80 uncompensated hours per year for sick leave, vacation, or personal necessity. Part-time employees will receive paid and uncompensated hours proportional to someone who works 40 hours a week. This latter caveat is a sticking point for Barnes.

“The major reasons for prices going up are the offset of labor,” posited Barnes. “It’s not just the extra dollar an hour, it’s the 96 hours of paid time off. It’s basically two weeks paid vacation for any employee. Now, because people are taking time off, we’re actually paying over $35 an hour for what used to be just a minimum wage job, just to have an employee cover someone else’s shift. So when you’ve got 180 employees, and every one of them has two weeks paid vacation, you’re looking at a minimum of a third of your shifts at $35 an hour, which is really unsustainable.”

To some extent, Barnes’ concerns are valid. In August 2021, the West Hollywood City Council held a study session regarding its minimum wage, as well as its living wage, which is the minimum income necessary for a worker to meet their basic needs. It also reviewed both the potential positive and negative effects of increasing the minimum wage.

According to this study, “increasing wages in adherence to the City of West Hollywood’s Minimum Wage Ordinance does impact business costs in West Hollywood. For some businesses, there may be other co-factors in costs, such as inflation, COVID-19 impacts, supply chain issues, and the general rising costs of goods sold, rents, utilities, and more.”

But increasing the city’s minimum wage also has myriad benefits for both individuals and the community. The study also found “the benefits of increasing the minimum wage are, most fundamentally, the positive impact on the earnings of the working poor. The benefits of receiving an increased minimum wage can lead to reductions in income inequality and reliance of government public assistance programs and can result in long-term social benefits including improved morale, improved health, and more.”

Since both the minimum wage increases for California in general and West Hollywood specifically were implemented less than a year ago, any potential positive or negative impact on their economies is speculative.

To glean more tangible insights, it’s more pragmatic to look at Seattle, which spearheaded its own minimum wage increase nearly a decade ago. In 2013, the city passed a law that upped wages from the state’s rate of $9 to $15 over the course of 7 years. The results were nuanced and somewhat varied. According to a study released by the University of California Berkley in 2018, “the wage hikes increased pay and have not led to job losses.”

Another study conducted by Mark C. Long, a faculty member of the Evans School of Public Policy & Governance, stated, “Findings show that inequality among workers who earned less than the city’s median hourly wage ($26.42) was reduced modestly as workers in the lowest wage jobs saw large increases in hourly wages. There is no evidence to suggest, however, that Seattle’s minimum wage lowered the overall level of earnings inequality across all workers in the city, which substantially widened during this period.”

While the results are mixed, they do dispute Barnes’ prediction that increasing wages would render businesses “unsustainable.” His assessment alludes to a broader argument consistently used by opponents of minimum wage increases that the policy would decimate their community’s economy.

“There’s no zero truth to that idea,” said Kshama Sawant, a Seattle city council member who ran on the “Fight for 15” minimum wage platform. “And I can say that as an economist myself.”

After immigrating to the United States, Sawant earned a PhD in economics from North Carolina State University, then served as an economics educator at such institutions as Seattle University and the University of Washington Tacoma. While she was proud of her accomplishment of increasing her city’s wages, she admitted that the policy did result in a short-term increase in prices for goods and services, specifically the advent of restaurants tacking on “service charges” to offset their rising costs of labor, echoing the assessments of both Barnes and the study conducted by the City of West Hollywood. But to Sawant, the benefits of increasing the minimum wage for her city outweighed any negatives.

“For ordinary people in Seattle who were at poverty-level wages, for their wages to go up immediately, was a dramatic shift in their material standards of living. We’re talking about 100,000 workers. That’s a real effect.” She went on to relay a story of a Mcdonald’s employee who testified before the city council during the “Fight for 15” campaign.

“She gave a tearful testimony,” described Sawant, “and said that at the end of the month, she has so little left after she has paid for rent and food and medicines and her daughter’s school supplies, that she’s not even able to cobble together the dollars to buy a few trinkets for her little girl.”

Sawant also cited a ripple effect that Seattle’s wage increase had on neighboring cities.

“Many of the businesses outside Seattle were forced to increase their wages because they were forced to compete with workers who could get higher wages inside Seattle. The restaurant industry, which was viciously opposed to the increase in $15 an hour, one of the claims they made was that it would actually cause massive job losses and small business closures throughout the region. None of that happened.”

But for some in Southern California, West Hollywood’s minimum wage increase has yet to ripple into their communities. Tex, a nonbinary trans man working as a barista in Long Beach, technically benefits from California’s recent increase in the minimum wage but says the results are somewhat negligible.

“I think that it’s not enough,” he said of the current $15.50 hourly rate. “I do make tips so my actual wage could be like $18 to $25 an hour. I can say, personally, it has affected my life not so much. I mean, $130 a month, it’s paid my gas bill… kind of. It helped me cushion my gas bill, because they decided randomly to make that three times higher in December.”

Tex, who lived in Seattle before moving to Long Beach, has personally witnessed the unintended negative consequences of minimum wage increases.

“The concern is, like, how many people get kicked off Medicaid, if they make just a little bit more. In Washington, that happened to quite a few people. The wage went up, and then people got kicked off of Medicaid. It wasn’t adjusted for that. Or people lose their EBT because suddenly they’re making $1 more, but in like real terms, they’re not actually making that much more money.”

While losing access to health care is detrimental to everyone, it has a disproportionate effect on members of the trans community. Trans people often require medical care unique to their gender identity, such as hormone therapy.

“I take HRT, and that is covered by Medicaid,” Tex explained. “I haven’t had any surgeries or anything, but if I were to do that, that would be covered, which is amazing. So when people lose access to that, they’re losing that life-changing ability to not pay $10,000 for top surgery, for example.”

“For me, I mean, I don’t even know how much testosterone would cost. If I didn’t have Medicaid, I actually don’t even know what I would pay for that, on top of, like, needles, et cetera. For trans women, I’ve known quite a few who have gone through electrolysis and other procedures. But yeah, I mean, if it’s not covered, they might never do that. And that’s terrifying.”

The problem isn’t that increasing the minimum wage is ineffective. In a nation suffering from ballooning costs of living, raising the incomes of low-wage workers is crucial. But it needs to work in conjunction with other policies, such as the aforementioned Medicaid requirements. While some queer Americans may merely be dealing with $24 cocktails, others are losing access to crucial healthcare.

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