Phoenix Coffee Shop Proving $15 Minimum Wage Is Possible

“We have had this long-term vision of how coffee can be a career path for individuals.”

Adrian Garcia started working at Xanadu Coffee in downtown Phoenix as a barista when the shop opened in October. 

It was the promise of the $15 minimum wage that first attracted him to the job — something unheard of in most service positions.

“Being that this pandemic affects how often people are able to tip and actually support their local businesses, earning a tip-based wage was not very feasible,” Garcia told The Copper Courier. 

The additional money he’s earned since switching jobs allowed him more time to focus on school, where he’s studying medical billing and coding. 

“I’m way more equipped to handle my work/life/school balance a lot better,” Garcia said. 

An Ambitious Goal

Xanadu Coffee Company has existed as a wholesale coffee roaster and resource for coffee equipment repairs for more than a decade. 

But last fall marked its first foray into a retail space, when they set up shop at 625 N. 7th Street, right off the Interstate 10 exit. 

Giving workers an actual living wage was a priority from the start for co-owner Jessica Bueno.

“We felt that that investment was really important to make in our baristas, I mean especially in the time of COVID, but previously, for years, we had been working towards this,” Bueno said.  

Bueno, who is also a member of the Phoenix Elementary School District governing board, said her passion for community development and a background in the service industry influences how she runs her business. 

“We have had this long-term vision of how coffee can be a career path for individuals,” she said. 

How They Do It

One of the arguments against a $15 minimum wage is that small businesses can’t afford to pay workers that much. 

But Bueno and Garcia both think Xanadu proves this misconception wrong. 

“We don’t accept tips, so our prices do reflect that,” Bueno said, “And we have that $15 an hour, but we also have different revenue streams that help us really solidify our business model.” 

Garcia said he also doesn’t see the higher pay as “unsustainable.”

“I think it’s possible, so long as you have a business that is bringing the quality that is associated with a living wage,” he said. 

Bueno said some customers have been taken aback by their no-tip policy, and they have to explain that it actually benefits baristas. 

“A lot of people are like, ‘well why don’t you accept tips?” she said. “And it’s like, ‘Oh, you know. because we’re providing a livable wage currently and yeah, we include it in the prices, so we’ll take care of it from here.’” 

But Garcia said once some people learn about how the shop pays its workers, they come back to support Xanadu’s philosophy. 

While some people argue a raise in minimum wage will drive up costs to customers, Bueno said Xanadu’s revenue from wholesale and repair work helps keep their prices comparable to other shops. 

A Xanadu 16-ounce cold brew costs $4—again, with no tip—while the same size cold brew from a nearby Starbucks is $4.35. While other Xanadu items do cost more than the chain, the highest price is $6.25 for a 12-ounce hot latte.

Xanadu also roasts its own coffee and prioritizes locally sourced ingredients, adding value to their products. 

Not Just a Local Issue

A $15 federal minimum wage has been part of the national conversation packed into  COVID-19 relief bills. 

President Joe Biden’s $1.9 trillion aid package includes the Raise the Wage Act, which would gradually bump the nation’s minimum wage up to $15 an hour by 2025. 

The federal minimum wage is currently $7.25 an hour and hasn’t been increased since 2009. 

The minimum wage for tipped workers is just $2.13 an hour. The Raise the Wge Act would phase out legal lower wages like this one, as well as for workers with disabilities. 

According to the Economic Policy Institute, a $15 minimum wage would give about 835,000 Arizona workers a raise. Nationally, it would increase pay for nearly 32 million workers, or 21% of the country’s workforce.

Some Arizonans have already benefited from an increased minimum wage. Flagstaff raised its minimum wage to $15 this year, while Tucson announced plans to increase starting pay for city employees to $15. 

Bueno wants to see more businesses take on the responsibility of paying a living wage. She attended a rally outside of Sen. Kyrsten Sinema’s Phoenix office to support the Raise the Wage Act last week. 

“I’m just hoping at a national level the $15 minimum wage does get increased … I think it’s a very much needed act to pass and that’s why I’m standing up and showing businesses how it can be done,” Bueno said.