The raise in minimum wage came after years of struggle
September 17, 2021
On August 26, 2021, Bowdoin College announced they would raise the minimum wage to $17 an hour for hourly workers ten months earlier than the expected date. According to Senior Vice President for Finance and Administration and Treasurer Matt Orlando, the accelerated raise in minimum wage reflected changing labor conditions in Maine. Back in 2019, the College announced they would raise hourly wages at different rates every year, leading up to 17 dollars an hour in 2022. In the statement put forward by the College, it mentions:
“This decision … is the result of excellent and comprehensive work by Matt Orlando and his team that included a regular review over the past several months of our compensation and benefits and an analysis of changing market conditions locally and in Maine.”
While there has been labor from the side of the administration put into making the wage increase possible, the story told by the College omits important details which must be brought to the Bowdoin community’s attention so the current and next generations of students can know the full story. The raise in the minimum wage would not have been possible without housekeepers bravely speaking up about the issues they faced, without investigations conducted by the Orient and without the work of Bowdoin Labor Alliance and the support of staff, faculty and students.
To give more context, in May 2018, the Orient published an article about facilities workers—groundskeepers and housekeepers—struggling to make ends meet with the pay they received from Bowdoin. For an institution with an endowment of 1.3 billion dollars at the time, this was shocking news to many. Spurred by the news, a few students came together to create the Bowdoin Labor Alliance (BLA), a student, staff and faculty coalition formed to raise awareness on the issue and rally for the college to adopt a living wage—the minimum income necessary for a worker to meet their basic needs.
The formation of the BLA was only the beginning of a movement which saw Bowdoin students, workers and community members coming together to bring light to this issue. From its inception, the group held demonstrations that brought together around 400 students, executed a campaign during the 2019 graduation ceremony, published several articles by housekeepers and students alike and even held a discussion between Bowdoin’s student body and administration. Those actions culminated in the meeting between the board of trustees, following which the College announced in October 2019 that Bowdoin planned to increase their minimum wage from $12.65 to $14 on July 1, 2020, then to $15.50 in 2021 and to $17 by 2022.
Knowing our history is important, but we must not sit idle as history continues to write itself. The raise to 17 dollars an hour is considered well above the living wage, with the caveat that workers live by themselves or have another source of income in the household, according to MIT Living Wage Calculator. Analyzing the situation of a worker who lives by themselves, we need to take into account the rent crisis that has taken Maine by storm, causing a hike in housing prices. A worker who earns 17 dollars per hour makes around $2,620 in a month, and roughly $35,500 in a year. According to MaineHousing, the median rent price for a two-bedroom apartment in Cumberland County is $1,650, and in order for a person to live a decent life, in which housing is affordable (defined as using no more than 30 percent of gross income on housing), they must earn $66,000 a year. By this definition, for a contractual worker on the starting wage, they must rent a bedroom in a two-bedroom apartment or live with their significant other who must earn at least the same income as the contractual worker. The story gets complicated when problems such as a car breaking down or an urgent home repair being needed come in the way. In this case, money must be found fast, and if rent covers too great a part of the monthly income, the contractual workers are put in a difficult position.
The problem is not specific to Bowdoin College. It manifests itself at the state level. Since 2017, renter median income increases did not keep up with quickly rising median prices of a two-bedroom apartment. With rent prices growing way faster than the median income, Bowdoin must find a way to make sure that current and future contractual workers at the College can live decently without having to spend most of their income on rent or having to find accommodations very far away to actually be able to afford it.
While wages might have increased, an increase of 4.4 percent in Consumer Price Index (CPI), (Changes in measured CPI track changes in prices over time. A CPI is a statistical estimate constructed using the prices of a sample of representative items whose prices are collected periodically.) can be observed for the Northeast region in 2021, and of 4.1 percent for New England according to the U.S. Bureau of Labor Statistics. Fuel increased by as much as 12 percent compared to July 2020, increasing the costs on the consumers. If we look at the previously-mentioned scenario of a car breaking down, if one of the contractual workers goes through this unfortunate event, they might have to pay a price 40 percent higher compared to last year to purchase another used one.
The raise to 17 dollars an hour represents a wage increase of around ten percent, which is at least twice higher than the over-the-year percentage change in CPI for the Northeast Region. Workers are now able to afford more products and services and the increase doesn’t only cover the raise in prices.
We, Bowdoin Labor Alliance, salute the decision of the College to raise the minimum wage ahead of its time, but we also solicit on-going research to be done and for a comprehensive formula for the calculation of the minimum wage to be put in place. We solicit this formula to be made public and the campus community to understand what contributed to a change in wages. In an exchange of emails with Matt Orlando, he confirmed that the College considers a number of factors when setting wage pool increases, such as inflation, competitive market analysis by job categories, job market conditions and projections, balancing the budget/revenue constraints, wage compression, etc. He stated that if the College were to take into consideration only the change in consumer prices, the employees would have been much worse off.
According to the International Labor Organization (ILO), a minimum wage that is adjusted only on the basis of a change in the cost of living would result in a constant minimum wage in real terms, and minimum wage-earners would not see their real wages increase even in circumstances of economic growth. ILO recommends looking at France’s example which calculates the minimum wage based on the change in Consumer Price Index, while linking it to the purchasing power of blue-collar workers every year.
We, BLA, advocate for a similar formula to be implemented and to be made public but to account for the change in rent prices which are not included in the CPI. The changes in CPI and the hike in rent prices are alarming, and while Bowdoin has made the right decision of raising wages to 17 dollars an hour, an adequate formula, publicly available, should be put in place to account for market changes in the future and to ensure transparency. While the College might benevolently increase wages every year, that process is anxiety-inducing and doesn’t offer any promises to workers who have to consider quickly rising prices as they calculate their yearly budget.
This article represents the opinion of the Bowdoin Labor Alliance.
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