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Chipotle's decision to raise minimum wage to $15 may push other restaurants to follow suit

via Mike Mozart / Flickr

The Biden administration was prevented from inserting a $15 per-hour federal minimum wage in its $1.9 trillion coronavirus relief package in February due to a ruling by the Senate parliamentarian. It was the closest the federal government has come to raising the minimum wage to a level that activists have been fighting for over the past decade.

However, an unusual set of circumstances have aligned that could push the private sector into creating a de facto $15 minimum wage without any government mandate.

The restaurant business was shaken on Monday when Chipotle announced it was raising its current average wage of $13 an hour by another two dollars, bringing it to around $15. The change should be in full effect by June.

The Newport Beach, California-based company currently has 2,800 restaurants in the U.S. and Canada and employs nearly 100,000 people. The chain is looking to expand by another 200 restaurants this year.

Chipotle made the move to get a competitive advantage over its fast-food rivals at a time when there is a labor shortage in the restaurant business. Many people in the industry lost their jobs due to the pandemic, and a lot of them aren't returning due to low wages, childcare conflicts, closed schools, and an increase in unemployment benefits.

The restaurant chain believes that it can pay for the increase in labor costs by raising the prices of its food by a modest 3%.

Chipotle hopes that a pay raise along with new programs that put employees on track to become store managers within four years, earning an attractive $100,000 a year salary, will lure the best employees away from other chains.

"Wage inflation is real and employee availability is very tough and Chipotle is trying to stay ahead of the curve and maintain its human capital advantage by moving average wages to $15/hour by June," explained Jefferies restaurant analyst Andy Barish in a research note to clients.

"This raises bigger questions as demand is surging and some people have left the industry and/or are on the 'sidelines,' given the current Federal unemployment supplements that run until September," Barish added.

Chipotle's move to stay ahead of the curve could prompt other businesses to raise their minimum wage to the $15 an hour range just to stay competitive.

A similar change is happening in the world of big-box retailers. Target and Amazon both upped their minimum wage to $15 an hour, pressuring Walmart to do so for about a third of its employees.

Chipotle's decision shows how giving workers a raise can create a win-win situation for both owners and employees. Chipotle will now get to hire the cream of the crop when it comes to restaurant workers, and by implementing new programs that put workers on a management track, will also benefit from lower turnover.

It's also a great business move because there are a lot of consumers who want to spend their money at businesses that take good care of their employees. The wage increase gives consumers another reason — besides the awesome guac —for people to choose Chipotle over other fast-casual Mexican restaurants.

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They pour their hearts into caring for others, but many can barely support their families.

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SEIU

"I know that a lot of the children, they’re starving by the time they get to my home in the morning. And a lot of times, you can just see it. They’re weak. And you can look at the parents and you can see that they’re weak. I sacrifice my groceries, I sacrifice water, sometimes I have clothing from other children ... sometimes I’ll sneak them into the bag. There have been times when I've gone to the Salvation Army if I had extra money and I know that there was a child in need."

Nicole Small, a child care worker in Detroit shared the above story. This is her reality. And she's not alone.

You see, there are people who love their jobs. I mean really love their jobs.

Their work makes them feel fulfilled. It makes them feel purposeful. They're giving back to their community. They're helping people who actually cannot help themselves. They're shaping the minds of young children whose parents are struggling to put food on the table. They are their client's backbone. They hold them up and keep them strong as life throws challenges their way. They're proud of what they do.

But they go home after spending eight or more hours at work and often can't afford to put food on their own tables.

Nicole Small, a child care worker in Detroit. All photos via SEIU, used with permission.

Many times, they have no savings, no chance for retirement. Often they can't afford to own a car, and if it's a necessity they can't get away from, they can't afford gas. Still, they refuse to feel hopeless.

This is a reality for so many child care and home care workers in this country.

They work hard every day, doing jobs that are absolutely necessary — in many cases saving lives. But they can't support themselves. They make such a low wage that basics like socks need to be budgeted for. They're on public assistance and are barely scraping by. And many of us don't know about it. But as leaders in the Fight for 15 movement, they're making their voices heard and sharing their stories.

Home care and child care  workers at a Fight for $15 rally.

Many care workers struggle every day to make ends meet:

Nicole (child care)

"To be honest with you, it’s hard not to [survive]. When you’re looking at those children, it’s hard not to. I don’t know, you just kick into survival mode ... it’s just a part of your everyday life. Does it get exhausting? Are you tired? Absolutely. But what are you going to do when you have children here and you know that they need you."

Melissa Benjamin (home care)

"As a woman and working in home care, I have found myself completely dependent on my husband for everything. Even gas to get to my job. Because my job doesn’t pay a wage where I can support that. And so it creates this co-dependency on other people ... and there’s not a lot of dignity in that."

Melissa Benjamin, a home care worker in Colorado.

And as they fight for fair wages and a voice on the job, they’re worried that people don’t understand their struggle.

Denise Major (home care)

"You’re going to do work above and beyond the call of duty anyways simply because that’s someone that you love and you care about. ... It’s like you’re working but you’re still in poverty. And you’re working long hours and you’re working alone."

Denise Major, a home care worker in Pennsylvania.

Patricia Walker (home care)

"Everybody can’t do it. ... It takes a special person to go into somebody’s home and take care of them and give them that love and attention."

Sepia Coleman (home care)

"We are invisible. We’re not appreciated. We’re totally disrespected. And we have more financial struggles than time allows. We are literally the lowest paid people in our field, with the population of people that we work with."

Pavonne Scott (child care)

"We work so hard, tirelessly with the children, and then we can’t come home and pay our own bills. You’re giving so much and every day that you give goes straight to the bills. And that has been the biggest challenge."

Home care and child care  workers at a Fight for $15 rally.

Melissa (home care)

"I wish people knew that it requires skill. A lot of people will say, 'Well, it’s just home care; you’re just like a babysitter. Why would you need a fair wage for that? All you’re doing is cooking and cleaning.' But no, there’s more that goes into it than that. There’s a lot more that goes into it."

Still, they show up for work every day, in spite of the challenges, because they love their jobs and know how vital they are.

Patricia (home care)

"I love what I do. I love my people. I don’t call them clients anymore because I’ve been with them for a minute. So they’re like my family. ... I want to be involved with them and I just love what I do. That’s the only way I can say it. I love what I do."

Pavonne (child care)

"The children need teaching. The children are our future ... it’s a heavy responsibility."

Pavonne Scott, a child care worker in Florida.

Melissa (home care)

"I’m a caregiver. I know people need care, and it’s what I do. And also, I like home care because I find that people are happier in their homes. When they’re in their homes, they feel secure and valued and comfortable. Knowing that there’s a need for that has kept me in it."

Nicole (child care)

"If you really care about the children, the quality of their education and the quality of their life, that’s what you do. You just jump in, and you help out in any area that you can."

Sepia (home care)

"I know that I am doing a good service to someone who is in need of care. And I know that one day, it could be me ... that’s what keeps me motivated and keeps me going."

Sepia Coleman, a home care worker in Tennessee.

And they’re fighting for $15 and a union because it gives them hope that better days are around the corner.

Denise (home care)

"I know I have a voice now. I know I no longer have to suffer in silence, and I can help other home care workers to kind of help them help themselves. ... We have a unique situation because we all work in separate places, so we rarely ever congregate unless it’s a rally or something like that. ... So I just want to let other home care workers know that we’re not alone. ... We have a voice and we can call each other. And we can kind of feel like we’re not on an island by ourselves and feeling stuck and helpless."

Sepia (home care)

"Everybody that has a job should have dignity and respect ... every job is not for everybody. But if the job is done in the best of performing, please show that person that you appreciate them. Don’t have a person working for your company eight or nine, 10 years, and they have to come and beg you for the compensation of a raise. It’s not fair to them. We’re not slaves, we’re people."

Patricia (home care)

"I ride the bus to my clients every day. I can’t afford a car. It’s very important to me that no one that’s coming up after me has to go through what I’m going through. Or what I’ve been through."

Patricia Walker, a home care worker in Florida.

Nicole (child care)

"It means that our children will be able to be more competitive when they go to a standard school like kindergarten or middle school ... they’ll have a better education and they’ll have a better quality of life. That’s what it means to me for the children. And what it means to me for myself? It means that I can give them more."

Melissa (home care)

"That’s what this movement is about. It’s about dignity. Giving dignity to the home care workers and the client."

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There are mothers with full-time jobs who go hungry in order to feed their kids.

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It can be easy to forget that real people lie at the center of every movement.

From the fight for religious freedom to the ongoing struggles for racial, gender, and socioeconomic equality, these movements are carried by regular people: mothers, fathers, sisters, brothers, and friends who are working every day to make their voices heard.

The Fight for $15 is no different. It's about people fighting to survive.

Take, for instance, Adriana, a mother who has worked at McDonald's for five years.


Adriana's take-home pay for one two-week, full-time pay period was $508.38.

And like all of us, she has bills to pay.

She pays $100 per week in childcare for her son. Heat and water cost her $300 per month, and her rent is $500. With expenses for just those necessities already exceeding more than twice what she brought home for that two-week pay period — how is she supposed to pay for groceries? Emergency medical care? Internet so that her son can get his homework done? It's almost impossible.

What are workers supposed to do when they're working 40+ hours per week, doing necessary jobs, only to find that they're unable to make ends meet?

The minimum wage in the U.S. varies state by state; as of May 2016, it ranges from $7.25 to $10.50 per hour (with D.C. set to bump up to $11.50 on July 1). While some states do have slight increases scheduled years away, the sad reality is that with cost of living on the rise, it's still not enough to be a livable wage. So what does that mean?

There are veterans with full-time jobs who can't afford food.

There are parents who can only feed their kids if they themselves don't eat.

Or who give up everything so that their kids don't have to.

The people fighting for $15 work hard. They make multibillion-dollar corporations those billions of dollars.

Now, they're just asking to be compensated for it and for the freedom to form a union so they can get a seat at the table with the corporate CEOs who make so many decisions that affect their lives. They're fighting for their families and better pay so they can put money back into their neighborhoods. So they can strengthen and boost their local economy.

There's a long way to go, but the tides are turning.

New York and California have agreed to the $15 minimum wage. Thousands of workers in Pennsylvania are seeing their wages increase to $15 an hour. And the more these stories are heard, the stronger the voices of the thousands of people who are fighting for nothing more than the ability to survive can become.

If enough people stand behind them and share their stories, corporations will have no choice but to listen.

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Are you supposed to tip Uber drivers? Uber just answered in a surprising way.

I believe "Uber" is the German word for "super-convenient rides when the subway shuts down."

Which is appropriate, even though I just made it up.

The once-underdog-startup-turned-transportation-empire has become a pretty dominant force in the world of people who need to get places, which has also made it the subject of several recent controversies.

Photo by Oli Scarff/Getty Images.

First, New York City taxi owners sued Uber, saying the ride-booking service was threatening their livelihoods. Then Uber drivers got angry and sued the company, citing unfair wages and lack of proper employment status.

The company has also come under fire for spying on a reporter, a sexist campaign in France that claimed to pair passengers with beautiful women, and a "negligent" driver onboarding process that many say has led to incidents of sexual assault.

Like that area under the passenger seat, Uber has never really been squeaky clean. And now, another controversy is putting the company back into the headlights.

Uber just announced that its app won't include an option for tipping. And there's a really interesting reason.

You see, tipping is a bit confusing when it comes to ride-booking.

While Uber's official policy is that passengers don't have to tip and there is no option that allows users to tip using the app, many Uber drivers say that policy has created the misconception that drivers get tips from the company. In fact, drivers receive only the ride's fare, minus a 20-25% cut that goes to Uber.

Photo Illustration by David Ramos/Getty Images.

As part of the settlement from the class action lawsuit brought by drivers back in 2015, Uber has agreed to clarify once and for all that tips are not included in drivers' fares.

However, the company says it's still not planning on adding a tip function to the app anytime soon.

Why?

Tipping is inherently unfair because of customers' subconscious racial biases, Uber says.

While most conversations about racial bias and tipping tend to focus on the likelihood of a customer to tip based on his or her race, Uber has done its homework on research that suggests the bias goes the other way, as well.

According to The Boston Globe, an Uber spokesperson cited a study done by two Cornell University professors that found "consumers of both races discriminate against black service providers by tipping them less than white service providers.”

Photo by Spencer Platt/Getty Images.

A study published in the Yale Law Journal also found that after controlling for other variables, African-American cab drivers were tipped one-third less than white cab drivers on average. It also suggested that government-mandated tipping would directly reduce the racial tipping bias and might even reduce the tendency of drivers to refuse African-American customers.

Some have argued that race doesn't factor into how customers tip. But the data doesn't back them up.

Kiesha Seaton, an Uber driver who is black, told the Globe that she doesn't think race has anything to do with the tips she does or does not receive, saying, “It’s all about the service you provide, and if you provide top-notch, five-star service, you expect to be compensated as such." She went on to cite a large tip she once received as evidence, while admitting that she’s not sure how the experience would have played out if she were white.

Still, other Uber drivers have argued that everything from the model of the car they drive to their physical appearance can affect their tips.

In the service industry, there are obviously innumerable variables that can affect tipping behavior, ranging from the general mood of the customer or server to their economic status to the widely misunderstood and confusing language of a tipping policy.

Photo by Spencer Platt/Getty Images.

In a perfect system, Uber wouldn't need a tipping feature.

The company would simply pay their drivers a fair living wage and negate the need for the customer to provide extra in the form of tips.

Joe's Crab Shack recently became the first major restaurant chain to test out that concept. The restaurant raised its servers' starting wage to $14 an hour (from just over $2) and banned tipping. CEO Ray Blanchette argued that it would increase employee retention and guarantee that servers take home a consistent paycheck even if they work on slow nights — something that could be financially devastating to a server under the old model.

If Uber wants to make its employees happy, clear up all the tipping confusion, and account for unfortunate racial discrepancies, it might want to try paying its drivers a living wage.

Frankly, if Uber can afford to deliver kittens to your door once a year, it can probably afford to treat its workers fairly.

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