Stuck at $7.25

Twelve years ago this week, I sat at Boloco Atlantic Wharf with Senators Elizabeth Warren and Dick Durbin to talk about the minimum wage.

I was honored to host the conversation. I’ve long believed that paying people more isn’t just morally right — it’s operationally smart. Until someone earns a livable wage, almost nothing else matters. (For consistency, I use MIT’s Living Wage Calculator as a benchmark — and even that, some argue, is too low.) You can’t talk about culture, engagement, or loyalty if your team members are worried about rent or groceries.

At the time, the federal minimum wage had already been stuck at $7.25 for five years.

It’s still $7.25 today.

Seventeen years with no change at the federal level — the longest freeze since the minimum wage was established nearly a century ago.

Adjusted for inflation, $7.25 today has the purchasing power of about $4.83 back in 2009.

Think about that.

Back then, $4.83 an hour would have been laughable. Today, that’s effectively what the federal minimum wage feels like in 2009 dollars.

Back then, I wasn’t just advocating to “raise the minimum wage.” I was trying to introduce nuance. Compromise. Something that might actually pass both sides of the aisle — something that could align employers and employees rather than divide them further.

On the way to the event, I picked up Senator Warren at the Hynes Convention Center in my Tesla. I had been driving for Uber for a few months after stepping down as CEO. She had never been in an Uber, and she’d never been in a Tesla. So I drove her down Boylston to Atlantic Wharf.

I used the ride — rare one-on-one time — to float a couple of ideas I had been thinking about. They weren’t novel. I was borrowing from other countries where wage structures seemed more flexible and, in some cases, more effective.

The first idea was reducing the overtime multiplier from 1.5x regular pay to something more workable. If you run a restaurant, you know what happens at 1.5x. The 41st hour becomes radioactive. Employers cut shifts. Good employees get sent home. Workers juggle multiple jobs and often receive zero overtime pay in the process.

My thinking was simple: lower the penalty, keep workers with one employer longer, allow them to earn more consistently, strengthen culture, reduce churn.

It was rejected immediately. No appetite to explore it.

We were only at Arlington Street.

The second idea was youth or training wages, similar to Australia. Structured steps that allow young, inexperienced workers to enter the workforce without compressing wages for longer-tenured employees.

Rejected again.

What struck me wasn’t disagreement. It was the absence of negotiation. No curiosity. No exploration. No willingness to examine structural adjustments that might move the ball forward.

It was binary.

Raise it exactly this way. Or don’t raise it at all.

Twelve years later, here we are.

Massachusetts has moved — now around $15 per hour — but without automatic CPI indexing. So every few years, we fight again. At the federal level? Frozen.

And here’s the part that often gets missed:

If you take $15 per hour today and adjust it back to 2014 dollars — the year of that roundtable — it’s only worth about $11.83.

In other words, when we were fighting for $15, inflation quietly reduced what that number actually meant.

Years ago, I bought FightFor20.com because I assumed $15 would eventually feel low unless cost-of-living escalators were built in. I didn’t expect we’d still be debating $7.25.

Despite all of this, here’s what I believe more strongly now than I did then:

If your business model depends on paying people below a livable wage — and fighting to keep it that way — it’s not a viable business model. Not morally. Not economically. Not long term.

And I also believe that if we refuse to explore structural adjustments — overtime reform, youth tiers, tipped wage reform, automatic cost-of-living indexing — we will remain stuck.

When this photo resurfaced, I didn’t think it was a waste of time.

But it was a missed opportunity.

Nearly three decades into this industry, I’ll admit the fight in me has softened. Not only because of those who oppose raising wages — but also because rigid thinking on the other side blocks progress just as effectively.

That problem isn’t limited to wages.

It’s everywhere.

If anything needs to change, it’s our ability to negotiate nuance.