When Dr. Reza Hamzaee first came to the United States in 1974, he made $2 an hour as a student working in an office at the University of California-Santa Barbara.
The federal minimum wage grew by 10 cents the following year, and by another dollar by 1980, in accordance with the Fair Labor Standards Act.
Using a practical equation, he believes the current minimum wage rate of $7.25 isn’t where it should be. Given the last 33 years of high and low rates of inflation, a more realistic value should really be at $14 or $15 an hour, he said.
“This is when you don’t want to give them a raise, but you have the same basket of goods and services,” said Dr. Hamzaee, now an economics professor at Missouri Western State University.
Fast-food workers went on strike last week, demanding an increase in the federal minimum wage. The Economic Policy Institute, a nonprofit organization aimed to protect the low to middle class, said top restaurant executives make more in a single morning than one of their minimum-wage employees does in an entire year. Many advocacy groups organized strikes around the country, including Kansas City, on Aug. 29.
“Raising the minimum wage has always been good, in my opinion,” Dr. Hamzaee said. “It’s good stability for society.”
Jobs that nobody else wants
The Bureau of Labor Statistics shows close to 4 percent of Missouri workers made the minimum wage, $5.15 an hour, in 2003. That number swelled to 8 percent at $7.25 an hour just seven years later, when the economy crashed. More people started making minimum wage that year, most likely from losing their higher-paying jobs and taking lower-paying ones.
However, in the last three years, the number of hourly-paid Missourians making equal to or below the federal minimum wage decreased.
“We have a lot of jobs that nobody can do or doesn’t want to do,” Dr. Hamzaee said. “If those janitors aren’t available at the airport, then what? If we raise the wage, we will have more people to do those jobs.”
Another factor in labor economics is twofold: the percentage of businesses that have minimum-wage workers and the percentage of minimum-wage workers that make up a company.
“We have studied several places,” Dr. Hamzaee said. “Overall, as a nation, studies show that in certain places (raising minimum wage) can increase productivity and employment.”
If a company has less than 10 percent of its employees making minimum wage, a change to the hourly rate won’t hurt as much as a business that has a majority of employees making the minimum wage.
Chris Frangiadis chooses to pay some of his employees more as an incentive.
“It’s harder than most places,” he said of his Downtown restaurant, Piatto 614. “It’s not an idiot-proof restaurant where you’re just a pair of hands. In a sense, they are skilled positions.”
He spends a lot of time training his cooks to make homemade pastas, breads and recipes from scratch. By paying them more, it keeps them from going down the street and working at another restaurant, he said.
“I think the free market doesn’t bear that, or we wouldn’t be talking about this,” he said. “There are obviously people willing to work for (minimum wage).”
Besides his servers, the restaurant owner pays his cooks, bookkeeper and dishwashers more than the federal minimum wage.
“I think businesses have to do what is good for business,” Mr. Frangiadis said. “I don’t pay them more money because I want to make less money. I pay them more because I hope it will make me more money.”
The federal minimum wage for servers, however, is $3.65 an hour, plus tips. Mr. Frangiadis said his servers take home an average of $350 to $400 a week.
Making a budget
It’s not bad money for Paul Frazier.
“The thing I like about waiting tables is it’s an excellent fall-back job,” he said.
The 27-year-old server has been waiting tables at Piatto 614 since it opened last year. While he doesn’t have a wife and children to support, like a lot of employees making minimum wage, he said budgeting still is important.
“You have to be frugal and smart with your money,” he said. “I don’t buy new cars or new clothes all the time. Generally, I try to budget my money out, and there’s a lot of things I can’t do.”
Mr. Frazier works a second job, out of aspiration, and lives in an apartment with a roommate. It’s the kind of life the current service industry could support.
“It wasn’t meant to raise a family on,” Doug Hutton previously told the News-Press regarding minimum-wage jobs.
Mr. Hutton, who owns Cold Stone Creamery and co-owns Dunkin’ Donuts and Arby’s, said the service industry was meant to be part-time, for students.
“All your money, as a waiter, comes from tips,” Mr. Frazier said. “The paycheck is the extra. It’s fairly marginal in terms of my income.”
And therein lies another debate: The survival of families on minimum wage and the businesses that rely on them.
“The business climate for a small-business owner is absolutely brutal,” Mr. Frangiadis said. “We’ve been open 11 months and there’s not one employee in my restaurant, including my dishwasher, that doesn’t make more money than me. It’s terrible, but that’s a reflection of all of what small business has to do to stay in business.”