A Living Wage for Coffee Service Workers

The federal minimum wage has been $7.25 since 2009. A single adult in Greensboro, NC needs $20.36 an hour just to cover basic needs. The coffee industry runs on the gap between those two numbers.

COVID-19 hit low-wage earners hardest, and it made something painfully visible: the current national minimum wage isn't enough to save for emergencies, let alone survive on. Workers and consumers have both been pushing for businesses to pay higher wages. That pressure isn't going away.

Regardless of the job, everyone deserves to live on what they earn. Every job requires training and skill. The myth of "unskilled" labor is what lets businesses justify paying poverty-level wages. Many businesses are guilty of this, from corporate chains to independent shops, and coffee is no exception.

There are many in the coffee industry who continue to earn low wages. But from producers to consumers, people are looking for a more conscientious cup.

How many service workers earn minimum wage?

The service industry has the highest concentration of people earning minimum or just above minimum wage of any sector in the U.S. A lot of people don't realize that the last time the federal minimum wage of $7.25 per hour was raised was 2009. That's over 15 years without an increase.

The minimum wage hasn't kept pace with a changing economy. It's made life precarious for low-wage earners and kept many at or just above the poverty line.

Beyond poverty, those paid minimum wage often work multiple jobs or excessive hours and still can't meet their basic needs. Covering health insurance alongside rent and food is near impossible. Some are choosing between paying bills and feeding themselves.

This reality has pushed its way into political discussions. More people are demanding the legal minimum wage be raised to a living wage.

What is a living wage?

A living wage is a wage high enough for a person working full time to meet their basic needs. It doesn't cover debt repayment, long-term savings, or retirement investments. Just the basics.

Dr. Amy K. Glasmeier, professor of Economic Geography at MIT, has been collecting data since 2004 to build a living wage calculator that estimates the cost of living in specific geographic regions. It's widely used by those seeking to earn or pay a living wage in their area.

The calculator assumes 40-hour weeks, 52 weeks a year. Full time with no sick or vacation time. It doesn't account for anything that could be considered "excessive," like meals out or vacation.

For our locality of Greensboro, North Carolina, a single adult with no children would require a $20.36* hourly wage to meet basic needs. That same adult living in the Denver, Colorado metropolitan area would need $26.47* hourly. Living wage calculations take into account state and local tax rates, rent and real estate data, average costs of consumer goods, and other factors particular to each geographic region.

How is a living wage calculated?

There are multiple organizations calculating living wages, and their numbers don't agree. The Economic Policy Institute (EPI), a nonpartisan nonprofit think tank focused on low- and middle-wage workers, has developed its own calculator. The EPI factors in housing, food, transportation, health care, taxes, and optional child care. It also includes "other necessities" like clothing, household items, reading materials, and phone service.

While both MIT and EPI calculate a living wage, there's a difference. The EPI amount is generally a few thousand dollars higher than MIT's results. Both hover around $40,000* annual take-home pay.

Regardless of what you consider necessary when it comes to income and spending, the math is clear: working for minimum wage isn't sustainable.

What changes when workers earn a living wage?

For an employee, it can mean more security and a better quality of life. There are health benefits, from reduced stress and anxiety to having reliable access to food. It can mean not choosing between which essential items money gets spent on. Earning a living wage can mean being raised out of poverty. It can also open opportunities to pursue education or invest in further job training. And when low-wage workers have an increase in pay, they spend more, investing in local economies.

For business owners, it can mean improved morale and decreased turnover rates. That's especially valuable in coffee, an industry that leans heavily on quality, consistency, and good employee-customer relationships. Lower turnover also means less investment in training.

Being recognized as a responsible business goes a long way, too. With more consumer demand for ethical consumption, conscientious customers vote with their dollars by choosing to spend with businesses that align with their values.

Is a living wage enough?

Even though some businesses are making the switch to a living wage, shift workers are still struggling to keep up with rising costs, especially in bigger cities.

Elle Taylor, owner and barista at Denver, Colorado based Amethyst Coffee Company, elaborates:

No worker is 'living' right now. We all have to work 40 hours a week just to keep a roof over our head and food on our table, when food and shelter are necessary for survival and should be guaranteed rights, not for-profit enterprises.

Elle Taylor, Amethyst Coffee Company

She notes that with a living wage, there's a bit more flexibility in work schedule and less guesswork about income. But it's not enough to create real stability in an insecure housing market. "Commercial and residential rents are absurdly high and people all over... are still getting priced out of their neighborhoods," Taylor says.

As standards and cost of living rise, keeping the conversation about living wage going matters. But if real estate markets remain largely unregulated, Taylor suggests progress may stall, and at the expense of those already in precarious positions. "The conversation cannot continue unless we address the rent and landlord crisis. For-profit housing is cruel and oppressive; every person deserves to be housed."

Wealth inequality creates cascading problems for those at the bottom: housing instability, food insecurity, limited access to healthcare, and fewer paths to education. Multiple systemic changes have to happen to make real progress.

Where does the living wage conversation go from here?

A raise from the current minimum wage to a living wage has promise. But it's important not to settle on that alone as the only permanent solution for low-wage earners.

When asked about the future of living wage, Taylor states:

If we had an economic system that was not run for-profit and actually served the needs of the people, we wouldn't need to think about a 'living wage' because we wouldn't need to sell our bodies and labor power in exchange for basic human rights.

Elle Taylor, Amethyst Coffee Company

A living wage isn't an end-all solution. It's a starting point. As this conversation moves forward, we have to keep challenging ourselves to think about how to best support those who need it most.

Special thanks to Elle Taylor of Amethyst Coffee Company

*Updated on 8/21/2024 to reflect current data. Please refer to the MIT Living Wage Calculator and EPI Family Budget Calculator for up-to-date living wage and annual income data for specific localities.

Works Cited

"Characteristics of Minimum Wage Workers, 2020." BLS Reports, U.S. Bureau of Labor Statistics, 25 Feb. 2021, www.bls.gov/opub/reports/minimum-wage/2020/home.htm.

"Minimum Wage." U.S. Department of Labor, www.dol.gov/general/topic/wages/minimumwage.

"2021 Poverty Guidelines." ASPE, U.S. Department of Health and Human Services, 2021, aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines.

Glasmeier, Amy K. "Living Wage Calculator." Massachusetts Institute of Technology, livingwage.mit.edu.

"Family Budget Calculator." Economic Policy Institute, www.epi.org/resources/budget.