The $15 Minimum Wage Is Turning Hard Workers Into Black Market Lawbreakers

The $15 Minimum Wage Is Turning Hard Workers Into Black Market Lawbreakers


If the car wash workers can organize, any
workers can organize. In 2015 demonstrators including union leaders
and elected officials blocked traffic and were arrested in front
of a small car wash in Brooklyn. It was an empowering moment. These workers were willing to stand out there
to fight for their rights and for basic human dignity. I mean that’s something that you take with
you for the rest of your life. And you have the ability to make change by
coming together and when you do that, sometimes you find that
you’ve got some friends on your side. In the past six years industries like car
washes that employ low skilled workers have been the target of lawsuits for alleged
underpayment of wages. And they both engage in rampant labor law
violations. An ambitious unionization drive. Let’s hear it then! And a successful campaign to raise the minimum
wage in New York to 15 dollars per hour. We’re gonna lead the way, the nation’s going
to watch us and we’re gonna raise up this state. But here’s what really happened. Instead of helping New York’s low wage workers the movement is destroying their jobs it’s pushed some car washes to replace their
employees with machines and others to close down. Increasingly, workers have no choice but to
ply their trade out of illegal vans parked on the street. Because the minimum wage has made it illegal
for anyone to hire them at the going rate. At the same time, businesses that have chosen
to automate are benefitting. Thank you so much for $15 dollars an hour,
the best thing that could happen to us. Because outlawing cheap labor makes it harder for new competitors to undercut
them on price and service. This is an in depth look at the real world
consequences when politicians interfere with a complex
industry that they don’t understand enabled by media coverage that rarely questions
their simplistic tale of exploited workers in need of protection. Protect against who? The car wash campaign serves as a model for
what might be possible. In 2012 a coalition of progressive groups
led by the national retail workers union launched an ambitious campaign to transform
New York City’s car wash industry. The genesis of the campaign came out of the
realization that you had an industry which was really just a breeding ground for
terrible conditions hottest days of the year and the coldest days
of the year these workers are outside, working 60-70 hours
a week and sometimes more and not even getting payed the minimum wage. I think workers felt that they didn’t have
many choices and they really had no one that they could
turn to. And we felt that we could have a real impact
on the industry. But the truth is that almost from day one nothing about the car wash campaign has gone
as planned. For starters, it turns out that most workers
don’t want thelp from organized labor. After 6 years organizers have unionized 11
businesses or about 4% of the city’s car washes. Two of them have since closed down and the
union withdrew at three more because of a lack of support from the workers. There are just 6 unionized shops remaining, or about 2% of the city’s registered car washes. Ervin Par is an immigrant from Guatemala who
works at Main Street Car Wash in Queens one of the city’s six remaining unionized
shops. Organizers have held two strikes at this location
in the past few years. And the New York Times has covered allegations
of worker mistreatment here. Now Main Street could become the fourth car
wash where the workers pressured the union to withdraw. Protect against who? At this particular time we represent the workers
there and we certainly hope that we’ll be able to
continue to do that. With the unionization drive floundering, the movement’s leaders shifted their focus
to getting the city and state to mandate change. The most significant government intervention
championed by the union was an increase in the minimum wage to $15
per hour. New York is the progressive capitol of the
nation. We fight for fairness, we fight for justice. This move is upending the industry, but not
in the way activists intended. We’ve heard over the years from employers
repeatedly that any time that we’ve made changes within
the industry that either they’d all automate or the industry
would suffer massive shutdowns. We haven’t seen that happen to date. In reality, that’s exactly what’s happening. The $15 dollar minimum wage is driving many
New York car washes to replace men with machines. Such as at this large operation in Queens
that installed a new arch for hosing down vehicles which will replace about 4 workers. Like many of the city’s car washes, this one
was designed at a time when manual labor cost less than installing and maintaining machinery. Labor was cheap, yeah, real cheap. Amir Malki is a second generation car wash
builder. When he started in the industry in the 1980s operators all over the city were actually
dismantling machinery because rag, hose and brush wielding men did
a better job for less. Today, it’s reversing. Labor’s expensive and we need the proper equipment
to clean so we don’t have to use extra men. It’s not just renovations, new fully automated car washes are opening
up such as this state of the art outfit near
JFK airport with electronic gates, a self serve vacuum
and a single manager on site making sure everything is running smoothly. Car wash owners are choosing to automate even
though it entails substantial risk. Take Best Auto Spa in Brooklyn, one of the
city’s premiere handwashes. Drawing clients who care deeply about the
appearance of their cars and are willing to pay more for the human
touch. The $15 minimum wage means that this business
model is simply no longer viable. So Best Auto Spa is transforming from the
equivalent of an artisanal bistro to becoming just another fast food joint. Two years ago the owner installed $2000 worth
of equipment which allowed him to lay off 8 workers. Now he’s facing another policy change that
would further increase his labor costs. Employers are currently allowed to attribute
a portion of the tips earned by their workers towards meeting the minimum wage requirement. New York State is seriously considering a
proposal to eliminate the so called tip credit. If that happens come January, The owner of Vegas Auto Spa says he’ll have
no choice but to give all these employees the pink slip
and go fully automated. Then you have MM Wonder Bar, Church Avenue, you have new fully automated places opening
up like City Car Wash express on Northern Boulevard
and Staten Island, I could go on. What is your take on these examples, that I think do actually show a major trend
towards automation. I get it if you go into a car wash and the
owner has said ‘I’ve automated because of what’s going on
here.’ that it makes you think that it’s like, you
know, part of a much broader story. I’m not saying it isn’t the case, I’m justsaying that it’s like that might not necessarily be the case. It’s true that not every car wash owner is
willing to take on the risk and expense of automation and there’s another option: exit the business and relinquish their land
for more profitable uses. Which has also been happening at many New
York car washes. Several car washes were closed after their
owners were sued for paying off the books and not complying with labor regulations. We will continue to keep an eye on these businesses to ensure that they don’t stray from the path
of righteous business practices. A lawsuit contributed to closing of this car
wash in Woodside Queens, to this one in Harlem and to this one in upper
Manhattan. At each of these locations, dozens of low
wage jobs disappeared. Are workers really better off when the car
wash that they worked for closes down? Yeah, I don’t agree with your assessment that these car washes are closing as a result
of wage and hour lawsuits. That might not necessarily be the case that may be how it’s being characterized to
you. Another unintended consequence is that for business owners who choose to
stick it out and automate the $15 minimum wage actually protects them
from competition by making it harder for new car washes to
open up. Solely from being a businessman the increase
in the minimum wage makes my business so much easier. The best thing that could happen to me and
I think to the industry. Jack Belinsky is the manager of a new car
wash in Queens. It opened last year at the site of yet another
labor heavy operation that closed following a wage and hour lawsuit. The new owner converted it to a fully automated
exterior-only car wash. Meaning customers are left to vacuum the interiors
of their own vehicles. Cause we used to do the same thing with 25
people, now I’m doing it with 2. By making cheap labor illegal, the $15 minimum wage made it possible for
Belinsky to downgrade his service. Before, if I go exterior then my competition
says ‘ah, he went exterior and I’m still full service,
I’ll take all his customers.’ That never gave me a chance to go exterior, right now everybody is forced to go exterior
because of this crazy law and the minimum wage $15 an hour. Now everybody, it evened out the field. The $15 minimum wage amounts to government
prohibition of low wage work. And yet just making something illegal, won’t stop able bodied men with few alternatives from meeting a market demand for their services. These workers have few options and little
power, they live in the shadows. The irony is that progressives have pushed
car wash workers further into the shadows. Since legitimate car washes can no longer
hire them workers are going to the streets where it’s all cash, no taxes, no unions,
no worker’s comp, no insurance and certainly no wage floors. Fausto, who asked to be identified by his
first name only, is an illegal car wash worker. He’s part of a three man operation washing
cars on the curb out of a van for about $15 a pop. He’s lived in the US for 19 years and still sends a portion of his earnings back to the Dominican Republic to help support his wife and children. How the hell can you, how can I compete? Because of these guys, their paying cash,
you understand? They’re not paying the proper taxes, FICA,
insurance, but I am. And now the established car washes, left with
no choice but to install expensive machines and plaster their walls with operating licenses are the ones clamoring for the government
to enforce the minimum wage. ‘We worry for the workers, look at the rules
that we make.’ But if those rules are not enforced, those
laws are toothless. They only destroy the good guy that tries
to follow all the rules and has to compete with the bad guy that breaks
all the rules. Some of these guys working out of these vans
don’t have other employment options are you sure that it would be in their best
interest to shut them down? Yeah I actually, I do and I’m going to be
very blunt about that. You can always make the argument that you
can allow some people to skirt the law some people to skirt regulations that are
meant to protect workers in an effort to give people work opportunities. That’s a devil’s bargain. Or maybe the real devil’s bargain is championing
a set of policies that sound good at a rally but that in the real world jeopardize the
livelihood of the working poor. Which brings us back to Vegas Auto Spa, the Brooklyn car wash that progressive activists
made an example of back in 2015. Shortly after the car wash unionized, the
owner started planning his exit strategy. Two years later he found a buyer who kept
it running for one more year. Today Vegas Auto Spa is shuttered and the ripple effects of the entire movement
have been to destabilize an industry. Pushing the men and women who worked in it
even deeper into the shadows.

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About the Author: Oren Garnes

18 Comments

  1. What it's really doing is pruning the businesses that malpractice labor abuse!
    Let's be real about it. It's necessary because the so called deregulated "free market" is going to just get worse, eventually there will be nothing but the black market, homeless, no middle class etc!
    You have a choice, become unionized or lose everything. Those are your choices, don't listen to libertarians, they are GOP light, they are far right!

  2. These are lies. How do I know? They tested these theories before they began the protests, they learned that because of late stage predatory capitalism, and the rampant misuse of power over the national interest rates, and the mispending of SS money on the MIC, the market would continue to become more expensive while the pay rate of everyone not regulated would go down.

  3. They also lie about businesses closing down, the only businesses that closed down were those who didn't give a shit about their workers or their families.
    Additionally, the government proved that the raising of prices on everything would continue due to this kind of deregulated capitalism because of endless housing bubbles and endless bailouts and endless speculation market bubbles. Yeah you read that right, we just had the 9th bailout 2019 of the banks by you the taxpayer all because of the establishment democrats and the GOP republicans!

  4. While there is bias on both side there are 2 points here.

    1. Unions don't push this out of the kindnessof their heart. They want more money. It's all about the dues so that guy being interviewed can get his payday.

    2. Automation as wages go up is real. In my area where they do have $15/hr. Walmart near me has 0 cashier's, it has all been converted to self checkout. McDonald's, Taco Bell, etc have reduced to 1 support cashier and a set of kiosks or mobile ordering discounts.

    An entry level tech worker (not coder) used to start at $16/hr, now they are $25+/hr.
    Most stores and service areas are not running on half staff.

    There are 2 automated carwashes, no hand washed (except 1 place that does it for fine cars at $80-100).

    It's just the trend

  5. No one held a gun to these car wash employees' heads and forced them to work at a car wash. Don't like the job? Quit. Get an education, learn to speak English, and get a better job. Just paying these people $15/hr does not increase their productivity or job quality. If I owned a car wash and had to pay these degenerates $15/hr I would either fire 33% of them, automate their jobs, or simply refuse to pay the minimum wage. All minimum wage does is cause inflation and job losses.

  6. Idk I’m always looking to achieve and move forward. No matter the pay you should always take pride in what you do and work your ass off. You will never be noticed doing the bare minimum to mediocre work. Most ppl that complain are average workers who just do enough to not get fired then cry when they don’t get the big raise and or promotion. I’ll take low pay but never settle for less tha I know I deserve and if I can’t progress where I’m at, I make moves and find work elsewhere but only take the job if it can match or pay me more

  7. The USA should enact a UBI of $6500/person/year, a flat tax on value added of 33%, with payroll taxes credited in full against the flat tax. The minimum wage should then be reduced to $4/hour, net of all taxes.

  8. Seattle did the $15/hr few years back… effectively killing off over 35% of all full-time jobs in a job environment that is upwards of 80% service industry… Every "feel good", "liberal policy", effectively destroys what it halfheartedly plans to fix!!!
    Realize your elected leaders have one job, from local all the way up, to provide protection… protection & basic gov services… NOT to meddle in what was once a free market!

  9. Well, since I take it he's in America, though you wouldn't realize it since he either cannot, or refuses to speak English… is probably an illegal alien as well…. THAT IS ALSO A DRIVING PART IN LOW WAGES…… don't believe it? YOU ARE AN IDIOT!!!!!!

  10. This is all democrat garbage? they’d all still have jobs if they would just been ok with they have. It would of been better to get better jobs elsewhere ??

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