Minimum Wage (Part 1)
This is the first of three posts on increasing the minimum wage. It addresses some of the popular opinions and arguments for and against increasing the minimum wage. Part 2 addresses some of the issues which complicate the process of changing the minimum wage or instituting a living wage and part 3 concludes the discussion by outlining a plan to implement a living wage.
I have seen several memes and comments about the potential minimum wage hike on social media recently that I think deserve a response. The conversation is filled with passionate people saying passionate things and I think they deserve gracious and truthful answers. These memes encompass a great deal of the argument surrounding the debate over increasing the minimum wage. On one side are the people who rightly believe that the current minimum wage is not sufficient to meet basic expenses and that people’s wages do not correspond to their skill sets or worth. They see the minimum wage debate as not one over dollars, but dignity. They believe people working full-time should be able to live on their wages. Those supporting doubling the minimum wage care about morality, not math. They want a living wage, not a minimum wage.
The other side does not necessarily disagree with wanting full-time employees to enjoy lives of dignity, but they have a more shrewd economic understanding than the first side. They realize that companies have a limited amount of money they can afford for each hour of labor. For those companies with a lot of low-wage workers, doubling the minimum wage leaves them with two options. They must either cut expenses or increase income. In most companies, that means either downsizing or passing the cost along to their customers. Those against doubling the minimum wage know that doing so will most likely lead to massive unemployment or a huge cost of living increase. Either is disastrous, especially for low wage earners. They likewise approach the issue out of concern for basic human dignity, and likewise fail to solve the problem.
Low Wage Public Servants
Several of the memes have talked about the relationship between minimum wage workers and public servants making below or around the proposed $15 hourly rate. These memes compare minimum wage to first responder pay, law enforcement pay, military pay, or teacher pay and approach the issue from one of two ways. One form of the meme suggests keeping the minimum wage as is because entry-level positions should be valued lower than public service positions. The other form suggests that the wages for both groups should increase because neither is being paid well enough. Both sides agree that the public servants should receive higher than minimum wage compensation and both sides neglect the impact of economics and market forces on either of these decisions. Both sides see the wage as an arbitrary number, or at least as a number in a vacuum, and would be content so long as the public servants’ wage is above the minimum wage. While these memes may appeal to people’s emotions, they add nothing else to the conversation.
Renting an Apartment
Other memes have pointed out that a full-time minimum wage job does not afford earners with the opportunity to rent a two-bedroom apartment. These seem to entirely miss the point. If someone needs a 2-bedroom apartment, then they most likely live with at least one other person and both parties could likely afford the apartment, utilities, and groceries on full-time minimum wage. In fact, many people would bring in a third or fourth roommate to sleep in the living room and cut the cost per person. Perhaps these memes are about minimum-wage loners. If so, I recommend a studio apartment. I know of zero living situations which require a two-bedroom apartment on a single minimum-wage income without government assistance. It’s a non-issue.
Cost of Living Increase
Another meme said “The same people supporting $15 min wage will be the same people [complaining] about how expensive everything is.” While semi-accurate, this disparaging tone of this meme does its cause more harm than good. Prices will likely increase, but as industries trend toward automation, many companies may respond by downsizing instead of increasing prices to accommodate any new wage requirements. If so, cost increases would not be as significant as suggested. Either way, the pedantic tone adds little to the debate and increases the divide.
Worth vs Compensation
Someone responded to the cost-of-living meme with a great question: “Do you suggest a better way of having people have their work be worth more?” While well-intentioned, this comment confuses worth with compensation. Many people confuse these, and in a perfect world they would be equal, but in our current system they are unrelated. For instance, how much is a parent worth? Yet how much do we compensate them? A job’s worth rarely corresponds with its pay.
The Morality of a Living Wage
The final meme I want to address quoted Robert Greenwald as saying: “If you don’t support a living wage, you’re saying that someone who works 40 hrs/week doesn’t deserve a life of dignity & should be condemned to poverty for the rest of their lives. If you don’t support a living wage, I don’t question your politics. I question your morality.” This hits toward the heart of the issue. He addresses “living wage” instead of minimum wage. His reasoning seems to suggest that all or most people who receive minimum wage are full-time employees and receive the minimum wage throughout their working lives. While this is highly unlikely, there are probably some workers with limited educational attainment, skill sets, and opportunities who work full-time minimum wage jobs throughout their lives and are unable to make ends meet because of how low their pay is. Greenwald is correct that those individuals, who are made in the image of God, are worthy of dignity and should not spend their entire lives condemned to poverty. He is right; this is a moral issue. But as is often the case, when we invite the government to help fix moral problems, they become political problems. Interestingly, Greenwald stops short of equating the proposed $15 an hour minimum with the “living wage” he references. Maybe he understands that assigning any arbitrary amount as a minimum wage will fail to eliminate poverty. Either way, he fairly characterizes poverty as a moral issue which we as a society should address.
As you may suspect, I have much more to say about this. Continue reading part 2 to learn why this is such a complicated issue and part 3 to learn about my suggested solution to this problem.