What $5 more an hour could buy a low-wage worker

McDonald's french fries sit under a heat lamp during a one-day hiring event at a McDonald's restaurant on April 19, 2011 in San Francisco, Calif.

In the last few weeks, workers at big chains like Walmart and McDonald's have walked off their jobs, demanding a raise.  The average pay for workers at those places is often not much above minimum wage, and many employees say they don’t earn enough to make ends meet.

But there are a few exceptions to the low-wage service industry rule. So when you talk to workers who make more than the industry standard, what does a few more bucks an hour really mean? 

Those few more bucks an hour mean a few thousand more bucks a year, of course.

That might not sound like a lot, but that extra money can be a sort of tipping point for lots of other things, according to Johnny Smith. He’s a 32 year old with a snidely whiplash mustache who worked for many years at Trader Joe's in Los Angeles. Smith takes me to his old store, to point out just a few of the chain reactions higher pay set off in his life. 

First, we go to the parking lot, which is, as usual, a mess. Angry drivers honk and jostle their way into the store, on the hunt for holiday party appetizers. “It gets pretty brutal,” Smith says, laughing.  He’s seen fist fights break out. He rolls his eyes. “I mean, come on, you're buying produce.”

But in the middle of all that customer angst, Smith says the people working inside, behind the counter stay pretty happy. And the reason why, Smith says, mostly goes back to higher pay.  The average wage for a cashier in the U.S. is around $10 an hour. At Trader Joe's, it's more like $15.

“Obviously if you're making that much more money an hour, you want to hold on to that,” Smith says. 

Aside from being happier at work, Smith says there were more concrete changes to his life. He worked a minimum wage job before he started at Trader Joe's, and says once he was making a little more, he was able to afford gasoline. His diet went from fast food dollar menus, to fresh food, now and then. “I thought I hit the jack pot,” he says.  

Even just slightly higher wages bring small but significant differences, says  Robert Pollin, an economist at the University of Massachusetts who has interviewed dozens of workers who got raises from low to so-called "living" wages.

He asked workers what changed, and they mentioned things like paying off credit card debt, or taking a class to develop a new skill. “It's not like it helped people to dramatically get ahead,” Pollin says.  “But it enabled them to stop falling behind.”

John Castro is a cook who, until recently, made $12 an hour. He says even that was tough in an expensive city like Los Angeles.  He’s single, with no children. “That's the only reason I was barely getting by with low wages,” he says.

Then Castro got a job as a line cook in a unionized hotel in downtown L.A., and started making $17 an hour.

He says one of the best side effects of higher wages has been in an unlikely place: his love life. “It's easier to date,” he laughs. Not just because he can afford to take someone out to dinner now. But because he feels better about himself, which makes it easier to ask a person out.  

About the author

Krissy Clark is the senior reporter for Marketplace’s Wealth & Poverty Desk.

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