{"id":4661,"date":"2016-06-05T08:18:17","date_gmt":"2016-06-05T14:18:17","guid":{"rendered":"http:\/\/admin.patheos.com\/blogs\/janetheactuary\/?p=4661"},"modified":"2016-06-05T08:18:17","modified_gmt":"2016-06-05T14:18:17","slug":"the-true-minimum-wage-the-shadow-economy-wage","status":"publish","type":"post","link":"https:\/\/www.patheos.com\/blogs\/janetheactuary\/2016\/06\/the-true-minimum-wage-the-shadow-economy-wage.html","title":{"rendered":"The “True Minimum Wage” = the Shadow Economy wage"},"content":{"rendered":"\n<\/head>

\"https:\/\/commons.wikimedia.org\/wiki\/File%3ACar_Wash%2C_San_Bernardino%2C_CA.jpg;<\/p>\n

So I checked my twitter feed this morning and saw a link to an article<\/a> on the impact of the $15 minimum wage in New York on car washes. \u00a0According to the article, New York, unlike much of the rest of the country, relied on manual labor rather than automated car washes because of the abundance of cheap, immigrant labor, which, until a decade ago, worked under the table for small hourly wages plus tips. \u00a0But, as the Reason article describes,<\/p>\n

The situation started to change in 2008, when state investigators conducted the first car wash sweeps in recent memory. The following year, the U.S. Department of Labor settled a lawsuit against one of the city\u2019s largest operators, with cumulative back wages and damages totaling $4.7 million. In 2012, the retail workers union and two affiliated labor groups launched WASH New York, a campaign to organize employees of the city\u2019s more than 200 car washes. Last year, Mayor Bill de Blasio signed the Car Wash Accountability Act, which created a punitive new licensing regime.<\/p><\/blockquote>\n

The article goes on to say that, inevitably, New York car wash companies will move to automation, and, instead of $15\/hour jobs, the employees will have no jobs at all.<\/p>\n

And that may indeed be true for these particular companies, because the close attention from the city, and the unionization, means they won\u2019t be able to just slip back into the shadow economy.<\/p>\n

But it seems to me that for a large number of small businesses, the impact of a dramatic increase in the minimum wage will be exactly that: \u00a0a move to paying (some of) their employees off the books.<\/p>\n

Back many, many years ago, I had a part-time job at a dry cleaners in high school, and it was well-known that the white high school girls who worked at the counter for minimum wage were paid on the up-and-up, but that the black men in the back were paid in cash, off the books, or paid a mix of cash and properly-recorded time. \u00a0(Remember, this was a Detroit suburb, in the 1980s; in other times and places, it\u2019d be immigrants, but there, it was men from Detroit coming to the suburbs for work.) \u00a0How much they were paid, and whether they accepted a lower-than-market wage, because they didn\u2019t need to pay taxes (and could keep welfare benefits, or perhaps pay less in child suport), I don\u2019t know. \u00a0Whether this still continues there, or how prevalent it is, I also don\u2019t know, and there\u2019s not much out there to be found via google, with the largest number of links saying, \u201cit\u2019s hard to measure.\u201d<\/p>\n

But here are a couple links:<\/p>\n