Universal Basic Income is better than a higher minimum wage

Sorry, AOC, but Andrew Yang was right

Shefali O'Hara
The Shadow
Published in
7 min readMar 14, 2021


Photo by Sharon McCutcheon on Unsplash

On January 19th, the Long Beach City Council approved a measure that raised the salaries of grocery store workers. During the pandemic, these workers are among those that are considered essential and the city wanted to show its appreciation for these heroes.

It’s a nice gesture, isn’t it?

As far as the details — the unanimous vote mandated a 4-month increase of $4 an hour for those who worked at supermarkets with at least 300 employees nationwide. In other words, the big chain grocery stores, the ones that can totally afford to pay their workers more, right?

That $4 an hour could make a huge difference in the lives of those hard-working essential workers, right?

Photo by The New York Public Library on Unsplash

Raising wages led to job losses

Well, it did make a big difference, but probably not in the way the City Council had anticipated.

Kroger closed two store locations. In response, the city put out a statement that said Kroger’s decision was “unfortunate”.

I’d say it’s more than “unfortunate” for those who are now out of work. On the other hand, by getting rid of a couple of Kroger’s, this does make the local bodegas more competitive. Perhaps the laid off workers can get jobs there.

One would think that after this episode, the members of the Los Angeles City Council would have reconsidered their idea of a $5 an hour hike for grocery store workers. However, one would be wrong. Los Angeles passed the pay increase and, lo and behold, three more supermarkets closed their doors.

Lest people think this is an abuse by greedy capitalists — grocery store margins are razor thin. How thin? In a conventional grocery store, the average profit margin is 2.2%. That means for every dollar in sales, the store only makes a little over two cents of profit.

Labor costs, meanwhile, run over between 20–30% of the total costs of operation. Given that the salaries of the Kroger employees…



Shefali O'Hara
The Shadow

Cancer survivor, writer, engineer. BSEE from MIT, MSEE, and MA in history. Love nature, animals, books, art, and interesting discussions.