Minimum Wage vs. the Carwasheros

Dec 2013
33,688
19,323
Beware of watermelons
#1
Labor activists have long claimed that working conditions at New York City's car washes are the worst of the worst. In the Big Apple, an estimated 5,000 men scrub and vacuum other people's vehicles for a living. A decade ago, it was common for these so-called carwasheros, many of whom are illegal immigrants from Mexico and Latin America, to earn $3 per hour plus tips, with no extra pay for overtime. Straight cash, off the books.

When demand peaked in the winter months, they would often put in 12 hours a day, six days a week. Regulators paid little attention, so by and large car wash operators ignored labor laws.

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's 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's more than 200 car washes. Last year, Mayor Bill de Blasio signed the Car Wash Accountability Act, which created a punitive new licensing regime.

But it's a law passed in April raising the state minimum wage from $9 to $15 that will have the most profound impact on the industry. Gov. Andrew Cuomo, a Democrat, made the minimum wage hike one of his top legislative priorities, traveling around the state to build support in a red-white-and-blue R.V. To signify its importance, he named the initiative the "Mario Cuomo Economic Justice Campaign" after his recently deceased father. The $15 minimum will take effect in New York City on December 31, 2018.

It's conventional wisdom among progressives that low-skilled workers like the carwasheros stand to benefit most from high wage floors. The opposite is true. The 67 percent wage hike will obliterate jobs at car washes and further the agenda of anti-immigrant conservatives—some of whom explicitly advocate for increasing the minimum wage because it reduces employment opportunities, halting future waves of illegal immigration and encouraging those already here to return to their countries of origin.

When labor costs rise, employers hire fewer people. But some liberal economists say the law of supply and demand doesn't apply to the labor market. Nobel laureate Paul Krugman claimed in a 2014 interview with Business Insider that minimum wage increases have a negligible effect on job losses because they mostly affect service-sector positions that can't be replaced by automation.

Krugman's remarks were out of touch with reality on several counts. In much of the U.S., car washes started automating a half-century ago as operators struggled to find reliable employees. In New York City, owners bucked the national trend because they could tap into a large pool of illegal immigrants willing to work long hours for little pay. Now that labor groups have succeeded in dramatically raising labor costs, the city's car washes will simply play catch-up with the rest of the country—replacing men wielding hoses and rags with nimble units of spinning brushes and massive hot air blowers. It's already starting to happen.

Minimum Wage vs. the Carwasheros - Reason.com
 
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Dec 2013
33,688
19,323
Beware of watermelons
#2
The Free-Vacuum Revolution
Automating the exterior wash required designing brushes that could reliably wipe away every caked in spot of dirt without scratching paint or knocking out side mirrors. It was a major engineering feat. Figuring out how to mechanize an interior cleaning, however, is orders of magnitude more difficult. Only a robot capable of maneuvering around car seats and distinguishing between a misplaced wallet and a crumpled fast food wrapper could replace a human with a rag and vacuum. The technology isn't there yet, and it certainly wasn't available four decades ago.

A solution to that conundrum came via a German businessman named Joseph Enning, who in 1960 first observed the wonders of the machine-assisted car wash while working for a television manufacturer in New York City. Enning was inspired to quit his job and move back to Germany, where he founded the Mr. Wash empire, whose 34 locations cleaned 6.3 million vehicles in 2015.

In Germany, labor laws are more onerous than in the U.S., making hiring workers are more expensive. Enning, who has a Ph.D. in industrial economics, had long been interested in pushing the limits of automation. A Mr. Wash location today can do exterior cleanings on as many as 3,200 cars per day, with just six employees overseeing the work.

Enning's answer to the interior problem was straightforward: Set up an area with free vacuums and put customers to work cleaning their own vehicles. The idea would later catch on in the U.S. thanks to Benny Alford, a second-generation car wash operator in Baton Rouge, Louisiana, who traveled to Germany in 1996 to observe a Mr. Wash facility. "You just couldn't find many people who wanted to make a career out of vacuuming cars anymore," says Justin Alford, Benny's son and business partner.

Benny Alford combined the free vacuum idea with another labor-minimizing technology: Working with a firm called Innovative Control Systems, he installed the first automated sales attendant, so that customers could line up at an electronic gate and pay for a wash without ever interacting with a human. Alford opened his first exterior-only car wash tunnel with free vacuums in August 2001. The setup required only two employees on-site to make sure everything was running smoothly

"Benny's idea was to put a few things together at once," says Eric Wulf, the CEO of the International Carwash Association. "And what he did transformed the business." Benny's washed more than 200,000 cars at $3 a pop in its first year after remodeling, according to a consultant who worked closely with Alford.

Minimum Wage vs. the Carwasheros - Reason.com
 
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Jun 2016
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TX
#5
immigration does not bother me personally. if there were no entitlement programs, minimum wage and an enforced visa program it would be a positive not a negative on the economy.

I am not talking about immigration. I'm talking about illegals aliens.
 
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Feb 2014
12,580
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nunya
#6
immigration does not bother me personally. if there were no entitlement programs, minimum wage and an enforced visa program it would be a positive not a negative on the economy.
It would be a positive because the uneducated destitue would not be coming here for all of the above you listed. Instead we would be siphoning off the productive citizens of other nations.
 
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Dec 2013
33,688
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Beware of watermelons
#7
I am not talking about immigration. I'm talking about illegals aliens.
i know. there would be a much smaller number of "illegal aliens" if there was not rules and regulations in place to make it beneficial for them to enter the country illegally and stay.

remove the economic benefits and solve the majority of the problem.
 
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Dec 2013
33,688
19,323
Beware of watermelons
#8
It would be a positive because the uneducated destitue would not be coming here for all of the above you listed. Instead we would be siphoning off the productive citizens of other nations.
yup.

give me the best and the brightest.
 
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