What Does California’s New Minimum wage Buy? A Long Commute and a Room

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Spending more than three hours in a car each day is not unusual for Daniel Gretz. Gretz works as a security guard in Milpitas, which is in the southern part of California’s Bay Area. Each morning, he gets in the car and drives about 97 miles up Route 101 from Greenfield where he lives with his brother’s family.

Gretz had grown up in nearby Cupertino and has over the years seen housing and rental prices sky rocket.

“There are more and more people moving outside the Bay and then commuting to work,” says Gretz. Five years ago, when he first moved to Greenfield, his commute was “an hour and 15 minutes max. Now, on a good day, it’s an hour 45 minutes. On Friday, I leave work at 4:30 and not get home until 7 o’clock.”

Trying to survive on hourly pay of $15 an hour, Gretz feels he has no choice but to make the daily trek up and down the 101. Moving closer to Milpitas and San Jose would mean renting a place that would swallow up majority of his monthly paycheck.

As California becomes the first state to approve a proposal for $15 minimum wage, the question becomes: Is $15 an hour enough?

On Monday, California governor Jerry Brown signed a bill that will gradually increase California’s minimum wage over the next six years until it reaches $15 an hour by 2022. Thanks to a 2014 ballot initiative, San Francisco will have a $15 minimum wage by July 2018. And while $15 an hour will benefit many of California’s low-wage workers, in the Bay Area it is barely enough to live on. Stagnant wages have not kept up with the rents, which have gone up by more than 10% each year.

In search of lower rents, Bay Area residents have moved further away from their jobs — often traveling from one Bay Area city to another for work. According to the U.S. census, for most workers in the Bay Area their commute to work is about 30 minutes long. For those earning $15 and less, however, it can sometimes be as long as one to two hours each way.

The Bay Area consists of 101 cities, nine counties and spans about 7,000 square miles. It is home to more than seven million people. To picture how sprawling the Bay Area is, consider this: New York City — home to more than eight million people — is just 304.6 square miles. The Bay Area is about 23 times as large.

‘Moving day sux’

Above a bar on Mission street in San Francisco, is an open space where the neighborhood youth gather most days. The space belongs to Homies Organizing the Mission to Empower Youth (Homey), a community organization focused on helping at-risk youth. Near the staircase on the second floor is a whiteboard. On it, written in red marker is: “Moving day sux.”

The organization renting the space above Homey was recently evicted and had just moved out, says Carlos Gutierrez, director of operations of Homey, when asked about the note. Homey was able to extend its lease, but its rent has almost doubled. Most of the people working at Homey have grown up in the Mission, but in the recent years have had to move to places like Oakland and Stockton after being either evicted or having their rents hiked too far. A drive from Stockton to San Francisco is about two hours each way.

“People born in San Francisco can’t afford to live in San Francisco,” says Gutierrez, 36, who has moved to Oakland with his teenage son. As a result, he says, San Francisco has become a commuter city.

San Francisco, Oakland and San Jose — all cities in the Bay Area — are among the 10 most expensive cities to rent a one-bedroom apartment, according to Zumper, a startup that connects people with houses and apartments for rent. In December, median rent for a one-bedroom apartment in San Francisco was $3,500, highest in the nation. At $2,190, Oakland was the fourth most expensive city and San Jose was sixth, with median rents for one-bedroom apartments reaching $2,130.

In Oakland, where Gutierrez lives, the rent for one-bedroom apartments increased by 19% in 2015. Rent of two-bedroom apartments increased by 13.3%, reaching $2,550. In the U.S., affordable housing is defined as housing that costs about 30% of one’s monthly take home pay. For a $2,190 one-bedroom apartment to be affordable, one would have to make about $7,300 a month, which is equivalent to about $87,600. The annual salary for someone earning $15 an hour? A little more than $31,200.

Working at Homey, Gutierrez earns between $30,000 to $35,000 a year. His rent in Oakland is $1,200. After taxes, his rent is more than half of his take-home pay, he says. His daily train rides to and from work add up as well. He also has more than $40,000 in student loans. Despite all that, he can’t imagine leaving San Francisco area and the community that he has grown up in and cares about.

“We are here to stay. They can’t get rid of us. The lot of us, we are not going anywhere,” he says.

“We are the cockroach people,” jokes Robert Eligio Alfaro, executive director of Homey, who sits at a desk across from Gutierrez.

“We find a way to stay here, be here,” Gutierrez continues.

It was the ethnically diverse communities that made San Francisco what it is today, says Alfaro. “And in no way do these people feel that they are going to leave their communities or give it to up to someone who has more money,” he says.

Organizations like Homey have been working with other organizations that tackle issues like affordable and low-income housing. According to Alfaro and Gutierrez, the two objectives are closely related as homelessness, moving from place to place and feeling insecure about housing can contribute to a rise in at-risk youth.

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Like some of Homey’s employees, Gretz did not always have such a long commute to work.

Back in 2011, during the recession, the security company Gretz worked for was acquired. Afterward, he was told that his pay would be reduced: from $24 to $14 an hour.

“They basically said: ‘Start putting your resume together.’ They didn’t think I was going to stay, but it was better to have a paycheck than nothing at all,” says Gretz. At the time, the U.S. unemployment rate was still between 8% to 9%. “Everybody was kind of feeling the pinch — it was not the best time to find something else.”

Back when he earned $24 an hour, Gretz rented a studio for $1,100 a month. When his rent went up and his pay was slashed, keeping a place on his own was not financially feasible.

“When you get the rug taken out from underneath you and are making $10 less an hour, you have to make some serious financial adjustments,” he says. In the months that followed, he refinanced his car, leaned on his credit cards too much and moved in with his disabled brother, who had just recently bought a house for his family. And while his brother’s house was 97 miles away from Gretz’s workplace, he says that if he were to accept jobs closer, the pay would be lower.

Gretz, who has been actively trying to unionize security guards in the Bay Area, has recently received a $1 raise and now makes $15 an hour. He says it is “mind boggling” to him how people earning minimum wage make ends meet. California’s current minimum wage is $10 an hour. In San Francisco, the minimum wage is $12.25.

“If I am struggling [on $15 an hour], what must they be going through?” he says.

Protesters rally and close down a McDonald&rsquo;s restaurant in downtown Oakland in May 2014. Photograph: Kim Kulish/Corbis<br /></dt><dd class=

‘Just one room. It’s all I can afford’

One of the people feeling the pinch is Ernestina “Tina” Sandoval, 40, who lives just outside of San Francisco in Richmond, California. Sandoval works overnight 10 p.m. to 6 a.m. shifts at a McDonald’s and is paid $11.52 an hour.

Mother of two — a 17-year-old daughter and a 10-year-old son — she often struggles to make ends meet. To save money, she often walks to and from work, which takes about 30 minutes each way.

“If it’s between my daughter and myself, I’d rather have my daughter have those $5. She is a teenager. Have some change for lunch,” says Sandoval.

For Sandoval, the difference between earning $11.52 an hour and $15 an hour would be continuing to rent a room for the three of them in a relative’s home and moving into a one-bedroom place of their own.

“At the moment, I rent a room in a house. Just one room. It’s all I can afford,” she says. Still, the one room is more than what her family had a few years ago, when they lost their home during the recession.

“I walked into the police department and said: ‘I am homeless and I don’t know what to do,'” says Sandoval. The police helped place her into a family shelter in Richmond — right across the street from the McDonald’s, where she applied for a job. For the next eight months, Sandoval continued to live in the shelter and work at the McDonald’s where she still works.

Today, she continues to fight for $15 an hour — a wage that she says McDonald’s, a multimillion dollar company, can afford.

“Those $15, it would make a big difference,” she says.

Written by Jana Kasperdevic of The Guardian

(Source: MSN)

Idled Workers Return to U.S. Labor Force

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Michael Mulvey of USA Today

Hundreds of thousands of Americans are streaming back into an improving labor market as employers raise wages and hire less skilled job candidates to cope with an intensifying worker shortage.

The portion of the U.S. population working or looking for jobs — known as the labor force participation rate — has risen to 62.9% from 62.4% since September, Labor Department figures show. The rate had been falling since 2008, mostly because of baby boomer retirements, and that’s still expected to be the long-term trend.

Yet part of the decline was caused by a bruising post-recession job market that prompted discouraged workers to drop out of the labor force and many other unemployed Americans to retire, go on disability or return to school.

At least some of those idled workers are returning to work or looking again now that the jobless rate has fallen to 4.9%, a level many economists consider full employment. They’ve been drawn back by employers who are raising pay or becoming less selective..

“We’re just hearing a lot more openness” from employers, says Tim Gates, of staffing firm Adecco.

Wells Fargo said recently the rebound appears to be driven by the less educated, including discouraged workers who had been on the sidelines. Since September, the participation rate for college graduates with at least a Bachelors degree has dropped to 73.8% from 74.4%. The rate for other groups, including high school graduates and those with less than a high school diploma, has climbed at least half a percentage point.

Even so, their unemployment rate has declined, indicating that many of those returning are landing jobs despite increased competition from their peers.

Other groups are also coming bac, including retirees, the disabled and people in school, according to a Goldman Sachs analysis. Many are enticed by rising wages. Although average wage growth across the economy has been tepid at about 2% nationally, average earnings for private-sector employees in the same job at least 12 months jumped 4.1% in the fourth quarter, according to payroll processor ADP.

Companies are also getting creative. Adecco’s Gates says some manufacturers unable to find experienced workers are splitting jobs into two positions and hiring less skilled candidates for the simpler tasks. Others are bringing on unskilled workers and training them, a strategy rarely deployed when unemployment was elevated after the recession, says Becca Dernberger, of Manpower’s Northeast division.

Written by Paul Davidson of USA Today

(Source: USA Today)

Women Still Shorted on Wages and Good Jobs

If you’re a woman, maybe now is a good time to consider getting into data entry keying.

That’s one of the precious few jobs in which women can expect to earn a median wage about $50 a week more than their male counterparts.

Of course, it’s not a great job. According to the Bureau of Labor Statistics, a data entry keyer operates a keyboard to enter data, and she (it’s “she” 75 percent of the time) earns a little less $30,000 a year.

Tuesday is International Women’s Day, a good time to review the data on how women fare in the U.S. labor market. Last year, the average full-time female employee made a median of $726 a week. That’s 81 cents for every dollar made by the median man, and it’s actually a bigger gap than the 83 cents per dollar the median woman made in 2014.

In the U.S., certain jobs (like data entry keying) are far more likely to be held by women than men (and vice versa). Here’s how our labor market breaks down by gender, with blue indicating occupations that have a higher percentage of women workers than five years ago:

Women make up about 95 percent of all child care workers, earning a median wage of $475 a week (for personal care and service occupations). Men, on the other hand, still make up more than 80 percent of aerospace engineers, chemical engineers and software developers, who make about four times as much.

In the last five years, those gender lines haven’t shifted much at all. Women are now less likely to be models and religious directors (red dots) and slightly more likely (blue dots) to be tailors, clerks and financial analysts.

Men also tend to make more within occupational categories. That’s true for nearly every profession with weekly wage data available, except for retail and wholesale buyers, data entry keyers and accounting clerks. As you can see, the gap between men and women is wider the higher up the pay scale you go.

Written by Mark Fahey of CNBC

(Source: CNBC)