The Bottom Dollar : Workers See Minimum Wage Increase as a Bit of Hope but Businesses Are Worried

Looking up “the line” at the Downtown Car Wash on Wednesday, where a group of four workers greet each newly washed vehicle with their drying rags poised, owner Bob Bush wondered how he is going to pay a higher minimum wage: Raise prices? Cut his workers’ hours? Live with a lower profit margin?

Waiting at the end of the automated track to begin his furiously paced hand drying, Luis Correa wondered which was going to be the better feeling come Oct. 1, when the money kicks in: The sheer rush that comes from opening your paycheck and seeing a higher number? Or the ability to spend the extra $15 a week on new books for his straight-A student daughter?

When President Clinton signed legislation Tuesday raising the minimum wage to $4.75, it marked the end of a long wait. California’s minimum wage--$4.25, same as the current federal wage--has not risen since 1988. For years, dueling academics have argued over whether a higher minimum wage will dampen business or decrease poverty.

Now, with the minimum wage to climb in two phases to $5.15 an hour by the fall of 1997, places like the Downtown Car Wash will become testing grounds for competing theories.

For Bush, 67, a Westside resident who bought his first Los Angeles-area carwash in 1959, even thinking about another battle with the bottom line is bone-wearying.

Business is down 40% over what it was five years ago, he said. With two locations--one downtown and one near Sunset Boulevard and Fairfax Avenue--and about 70 employees, Bush worries that the new mandate might be a signal that it’s time for him to get out of the business.

The majority of Bush’s workers earn $4.25 plus tips. The problem now, Bush worries, is that workers who are above the minimum will also ask for a raise. And Bush will probably give it to them, he said, in the name of keeping the peace and maintaining morale.

With washes running anywhere from $7.99 to more than $125 for complete detailing and other special services, Bush knows that many customers will turn to do-it-yourself facilities before they pay too much more. So he is weighing his options, all with some dread.

Good service is the key to survival, so cutting down on the number of workers per shift could threaten quality--and therefore customers. Raising prices has obvious consequences. And absorbing the extra cost of paying workers more might run the business permanently into the red.

During the next few weeks, before the mandate kicks in, Bush and his managers plan to experiment. First, they will try to increase productivity. If each person can work more quickly without sacrificing quality, the carwash might be able to get by with fewer workers per shift.

Ultimately, he said with the same sense of resignation, “two things may happen: We’ll probably have to raise our prices and then, if our volume falls off, we’ll have to cut back on labor.”

With only an on-the-edge profit level, cutting into his take isn’t feasible, Bush said. If that happens, Bush said he might have to shelve his plans to keep working for at least another five years.

It bothers Correa, 37, to think that his newfound wage hike may be eaten away by a cut in hours. He had thought little about such consequences; he had been too busy drying off the stream of newly cleaned cars and thinking optimistically about what a raise would bring.

Even with tips, his pretax weekly income is about $220, he said.

“It helps a little bit,” said Correa as he wiped out the inside of a front windshield, leaning over and grimacing as he stretched to the passenger’s side. “It will pay for my gas or a little food or maybe a couple bills.”

The extra money, he said, might make it possible for him to give more to his parents, who share their Southeast Los Angeles home with Correa and 14-year-old Marissa.

Tips, Correa said, are a crucial--if undependable--source of income.

The workers take turns driving a car off the line and finishing the drying; the finisher is the one who gets the tip, if there is one. So Correa’s pace is as quick and methodical as the whirling blue brushes of the automated wash line; the more cars he finishes, the more he makes.

If a customer has paid for more service, the finisher hand-wipes the wheels or shines trim. And though there usually isn’t a bigger tip for more service, the cars that require more extras are dried off under a cover, meaning the finisher is blessedly out of the sun for the few minutes the job takes.

“It sure is hard and it sure is hot,” Correa said. “There’s lots of pressure here--if you don’t keep it moving, the boss comes up to you and says, ‘You want to work or you want to go home?’

“But I don’t have no problem with it--I work hard, I’m motivated and I do my job.”

If his hours are cut to make up for the wage increase, Correa will be disheartened as much as disappointed.

“That won’t be no help,” he said, deflated at the thought. “I’m trying to give my daughter the best, and with my salary here, that’s really hard.”