The car wash industry, which employs low-skilled, mostly immigrant workers, has been the focus of an ambitious unionization drive since 2012. Working conditions at car washes were also cited as a raison d'être in the successful campaign to raise the state minimum wage to $15 per hour, which takes full effect in January of 2019.
As Reason chronicled in a feature story in our July 2016 issue, the real world impact has been mainly to push car washes to automate and to close down.
Two years later, there are more unintended consequences. The $15 minimum wage is fostering a growing black market—workers increasingly have no choice but to ply their trade out of illegal vans parked on the street, because the minimum wage has made it illegal for anyone to hire them at a competitive rate.
The minimum wage is also cartelizing the industry: Businesses that have chosen to automate are benefiting from the $15 wage floor because outlawing cheap labor makes it harder for new competitors to undercut them on price and service.
As a sequel to the 2016 article, this video takes an in-depth look at the real world consequences that result when politicians interfere with a complex industry they don't understand, enabled by media coverage that rarely questions the overly simplistic tale of exploited workers in need of protection.
"Curtains are Always Drawn" by Kai Engel is licensed under a Attribution-NonCommercial License.
"Industrial Music Box" by Kevin MacLeod is licensed under a Creative Commons Attribution license
"Desert City" by Kevin MacLeod is licensed under a Creative Commons Attribution license
"Summer Days" by Kai Engel is licensed under a Attribution-NonCommercial License.