If the car wash workers can organize, any workers can organize.
In 2015 demonstrators including union leaders and elected officials
blocked traffic and were arrested in front of a small car wash in Brooklyn.
It was an empowering moment.
These workers were willing to stand out there to fight for their rights
and for basic human dignity.
I mean that's something that you take with you for the rest of your life.
And you have the ability to make change by coming together
and when you do that, sometimes you find that you've got some friends on your side.
In the past six years industries like car washes that employ low skilled workers
have been the target of lawsuits for alleged underpayment of wages.
And they both engage in rampant labor law violations.
An ambitious unionization drive.
Let's hear it then!
And a successful campaign to raise the minimum wage in New York
to 15 dollars per hour.
We're gonna lead the way, the nation's going to watch us
and we're gonna raise up this state.
But here's what really happened.
Instead of helping New York's low wage workers
the movement is destroying their jobs
it's pushed some car washes to replace their employees with machines
and others to close down.
Increasingly, workers 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 the going rate.
At the same time, businesses that have chosen to automate are benefitting.
Thank you so much for $15 dollars an hour, the best thing that could happen to us.
Because outlawing cheap labor
makes it harder for new competitors to undercut them on price and service.
This is an in depth look at the real world consequences
when politicians interfere with a complex industry that they don't understand
enabled by media coverage that rarely questions their simplistic tale
of exploited workers in need of protection.
Protect against who?
The car wash campaign serves as a model for what might be possible.
In 2012 a coalition of progressive groups led by the national retail workers union
launched an ambitious campaign to transform New York City's car wash industry.
The genesis of the campaign came out of the realization that you had an industry
which was really just a breeding ground for terrible conditions
hottest days of the year and the coldest days of the year
these workers are outside, working 60-70 hours a week and sometimes more
and not even getting payed the minimum wage.
I think workers felt that they didn't have many choices
and they really had no one that they could turn to.
And we felt that we could have a real impact on the industry.
But the truth is that almost from day one
nothing about the car wash campaign has gone as planned.
For starters, it turns out that most workers don't want thelp from organized labor.
After 6 years organizers have unionized 11 businesses
or about 4% of the city's car washes.
Two of them have since closed down and the union withdrew at three more
because of a lack of support from the workers.
There are just 6 unionized shops remaining,
or about 2% of the city's registered car washes.
Ervin Par is an immigrant from Guatemala who works at Main Street Car Wash in Queens
one of the city's six remaining unionized shops.
Organizers have held two strikes at this location in the past few years.
And the New York Times has covered allegations of worker mistreatment here.
Now Main Street could become the fourth car wash
where the workers pressured the union to withdraw.
Protect against who?
At this particular time we represent the workers there
and we certainly hope that we'll be able to continue to do that.
With the unionization drive floundering,
the movement's leaders shifted their focus to getting the city and state to mandate change.
The most significant government intervention championed by the union
was an increase in the minimum wage to $15 per hour.
New York is the progressive capitol of the nation.
We fight for fairness, we fight for justice.
This move is upending the industry, but not in the way activists intended.
We've heard over the years from employers repeatedly
that any time that we've made changes within the industry
that either they'd all automate or the industry would suffer massive shutdowns.
We haven't seen that happen to date.
In reality, that's exactly what's happening.
The $15 dollar minimum wage is driving many New York car washes to replace men with machines.
Such as at this large operation in Queens that installed a new arch for hosing down vehicles
which will replace about 4 workers.
Like many of the city's car washes, this one was designed at a time when manual labor cost less
than installing and maintaining machinery.
Labor was cheap, yeah, real cheap.
Amir Malki is a second generation car wash builder.
When he started in the industry in the 1980s
operators all over the city were actually dismantling machinery
because rag, hose and brush wielding men did a better job for less.
Today, it's reversing.
Labor's expensive and we need the proper equipment to clean
so we don't have to use extra men.
It's not just renovations,
new fully automated car washes are opening up
such as this state of the art outfit near JFK airport
with electronic gates, a self serve vacuum and a single manager on site
making sure everything is running smoothly.
Car wash owners are choosing to automate even though it entails substantial risk.
Take Best Auto Spa in Brooklyn, one of the city's premiere handwashes.
Drawing clients who care deeply about the appearance of their cars
and are willing to pay more for the human touch.
The $15 minimum wage means that this business model is simply no longer viable.
So Best Auto Spa is transforming from the equivalent of an artisanal bistro
to becoming just another fast food joint.
Two years ago the owner installed $2000 worth of equipment
which allowed him to lay off 8 workers.
Now he's facing another policy change that would further increase his labor costs.
Employers are currently allowed to attribute a portion of the tips earned by their workers
towards meeting the minimum wage requirement.
New York State is seriously considering a proposal to eliminate the so called tip credit.
If that happens come January,
The owner of Vegas Auto Spa says he'll have no choice
but to give all these employees the pink slip and go fully automated.
Then you have MM Wonder Bar, Church Avenue,
you have new fully automated places opening up
like City Car Wash express on Northern Boulevard and Staten Island, I could go on.
What is your take on these examples,
that I think do actually show a major trend towards automation.
I get it if you go into a car wash and the owner has said
'I've automated because of what's going on here.'
that it makes you think that it's like, you know, part of a much broader story.
I'm not saying it isn't the case,
I'm justsaying that it's like that might not necessarily be the case.
It's true that not every car wash owner is willing to take on the risk and expense of automation
and there's another option:
exit the business and relinquish their land for more profitable uses.
Which has also been happening at many New York car washes.
Several car washes were closed after their owners were sued for paying off the books
and not complying with labor regulations.
We will continue to keep an eye on these businesses
to ensure that they don't stray from the path of righteous business practices.
A lawsuit contributed to closing of this car wash in Woodside Queens,
to this one in Harlem and to this one in upper Manhattan.
At each of these locations, dozens of low wage jobs disappeared.
Are workers really better off when the car wash that they worked for closes down?
Yeah, I don't agree with your assessment
that these car washes are closing as a result of wage and hour lawsuits.
That might not necessarily be the case
that may be how it's being characterized to you.
Another unintended consequence
is that for business owners who choose to stick it out and automate
the $15 minimum wage actually protects them from competition
by making it harder for new car washes to open up.
Solely from being a businessman the increase in the minimum wage
makes my business so much easier.
The best thing that could happen to me and I think to the industry.
Jack Belinsky is the manager of a new car wash in Queens.
It opened last year at the site of yet another labor heavy operation
that closed following a wage and hour lawsuit.
The new owner converted it to a fully automated exterior-only car wash.
Meaning customers are left to vacuum the interiors of their own vehicles.
Cause we used to do the same thing with 25 people, now I'm doing it with 2.
By making cheap labor illegal,
the $15 minimum wage made it possible for Belinsky to downgrade his service.
Before, if I go exterior then my competition says
'ah, he went exterior and I'm still full service, I'll take all his customers.'
That never gave me a chance to go exterior,
right now everybody is forced to go exterior because of this crazy law
and the minimum wage $15 an hour.
Now everybody, it evened out the field.
The $15 minimum wage amounts to government prohibition of low wage work.
And yet just making something illegal,
won't stop able bodied men with few alternatives
from meeting a market demand for their services.
These workers have few options and little power, they live in the shadows.
The irony is that progressives have pushed car wash workers further into the shadows.
Since legitimate car washes can no longer hire them
workers are going to the streets
where it's all cash, no taxes, no unions, no worker's comp, no insurance
and certainly no wage floors.
Fausto, who asked to be identified by his first name only, is an illegal car wash worker.
He's part of a three man operation washing cars on the curb out of a van for about $15 a pop.
He's lived in the US for 19 years
and still sends a portion of his earnings back to the Dominican Republic
to help support his wife and children.
How the hell can you, how can I compete?
Because of these guys, their paying cash, you understand?
They're not paying the proper taxes, FICA, insurance, but I am.
And now the established car washes, left with no choice but to install expensive machines
and plaster their walls with operating licenses
are the ones clamoring for the government to enforce the minimum wage.
'We worry for the workers, look at the rules that we make.'
But if those rules are not enforced, those laws are toothless.
They only destroy the good guy that tries to follow all the rules
and has to compete with the bad guy that breaks all the rules.
Some of these guys working out of these vans don't have other employment options
are you sure that it would be in their best interest to shut them down?
Yeah I actually, I do and I'm going to be very blunt about that.
You can always make the argument that you can allow some people to skirt the law
some people to skirt regulations that are meant to protect workers
in an effort to give people work opportunities.
That's a devil's bargain.
Or maybe the real devil's bargain is championing a set of policies that sound good at a rally
but that in the real world jeopardize the livelihood of the working poor.
Which brings us back to Vegas Auto Spa,
the Brooklyn car wash that progressive activists made an example of back in 2015.
Shortly after the car wash unionized, the owner started planning his exit strategy.
Two years later he found a buyer who kept it running for one more year.
Today Vegas Auto Spa is shuttered
and the ripple effects of the entire movement have been to destabilize an industry.
Pushing the men and women who worked in it even deeper into the shadows.