A basic tenant of any just society is that a day’s labor should provide enough to live on. The minimum wage must be a living wage – a wage to live here.
What does it cost to live here? A room in a shared house today easily runs upwards of $1,200/month. Federal and state taxes for a full-time minimum wage worker runs about $400/month. Utilities, groceries, car payments and gas easily add another $800/month. A basic Covered California subsidized health insurance plan adds another $80/month (a full-time worker won’t qualify for MediCal).
At the current $15.50 minimum wage, a full-time employee, here, is left with about $3 a day. That’s not a living wage. A single car repair, medical bill, or a rent hike, and there’s nothing left.
The results are seen in widespread help-wanted signs, as our workforce, depleting their savings to live here, packs up and leaves. And with the City Council’s recent 3-2 rejection of a vacancy tax to incentivize empty second houses to sell or rent, nothing is on the horizon that could substantially lower rents, the primary driver of our cost of living. If our goal is become like Vail or Aspen or Incline Village, an exclusive Disney-like enclave for wealthy, seasonal vacation houses served by transient workers unable to put down roots in their community, this is success. If our goal is a vibrant, thriving, and year-round community, the path we are on is unsustainable.
Both the federal and state government define housing as affordable if it consumes less than a third of one’s income. In the above example, that works out to $23/hr. But more than the absolute amount, that minimum wage needs to be tied to automatically adjust with the primary cost of living, rent – so when rent goes up, so does the minimum wage.
That is what I propose: A $23/hr minimum wage, phased in over five years, and then tied to the median cost of rent. Just enough pay so that a single room, in a shared house, is affordable to a full-time worker.
None of this is radical. In the last five years, the state of California raised the minimum wage from $11 to $15.50/hr, an increase of over 40%. Many cities in California, including San Francisco, and Emeryville have minimum wages that are already significantly higher than the state minimum, and 12 states plus the D.C. automatically tie minimum wage increases to the cost of living.
According to the Tahoe tourism industry’s own economic data in their recently published “Destination Management Plan” (Appendix B), tourism industry profits are up by 28% – over half a billion dollars – in the last 5 years. While over that same time, average tourism industry worker pay has actually decreased both in raw dollars, and, accounting for inflation, by a staggering 15%. For perspective, again accounting for inflation, if the five-year increase in tourism industry profits had gone to workers, that would represent an average annual pay increase of $2,880/year – over two months-worth of rent.
The current state minimum wage is so far below our skyrocketing cost of living, that even Vail Resorts, a mega-corporation with no great record of supporting labor rights, now pays a minimum starting wage of $20/hr so employees can have even a shot at living here.
Tahoe’s tourism economy needs to start working for locals – and raising the minimum wage is one part of making this happen.
Many have argued that local workers should not expect to live here at all, that low wage workers should live in Minden or Carson City (places which themselves are rapidly becoming unaffordable) and instead commute to Tahoe. This is classism of the highest order – a statement that Tahoe belongs to the rich, and that the “poors” who serve us, aren’t worthy to be our neighbors. Ethics aside, at a practical level, it’s a strategy that would see tremendously increased amounts of commuter traffic and long-term costs to our environment.
Many have decried that raising the minimum wage will kill jobs, with workers replaced with AI or jobs shipped overseas. This despite both the increase in profits and current epidemic of help-wanted signs throughout our tourism industry, following the 40% minimum wage increases of the last five years. Neither AI nor outsourcing can clean hotel rooms, bus tables, teach swim lessons, or assist special-needs schoolchildren.
The South Tahoe Chamber of Commerce recently made the perverse argument that we shouldn’t pay a living wage at all, because if we did, workers might no longer quality for welfare and food stamps, and children might not be poor enough to need free lunches. As if this was a bad thing. This is “Walmart reasoning” – the idea that taxpayers should…
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