Kicking around

This was written as a response to an editorial in the Chicago Tribune. You don’t need to have read the article to understand this, as they didn’t present any new arguments, just the same ones the republican party has been using since Reaganomics was a buzzword, not a nostalgia trip.

I hung my head when I read the recent editorial on the idea of raising the minimum wage. Although many of your points were technically correct, they were truly propaganda designed to play off of peoples’ fears instead of valid arguments.

Your example of the new oven* was designed to play on rust belt fears of automation replacing laborers. The truth is, almost any piece of technology or equipment eliminates a job for somebody. With the invention of gas and electric stoves, restaurants and hotels no longer needed to keep a fire going in the kitchen. Or, closer to home, since the invention of the printing press and movable type there is little call for those skilled in Woodcuts and handwritten copies of books. Blaming the effects of technology on an increased minimum wage is simply and intentionally misleading. Yes, the raise in minimum wage might end up being the deciding factor, but chances are the change was already being considered.

The other question you fail to bring up is how are the paychecks of those remaining workers affected. If raising the minimum wage meant that 14 part -time workers depending on Food stamps and section 8 housing turned into 12 workers who were able to provide for themselves and 2 workers who needed assistance, that’s a price most of us would gladly pay.

Instead of looking at the number of "jobs" created or lost, perhaps we should also be considering hours gained and lost. Since most minimum wage positions are part time, we count two part time positions being merged into one full time position as a “lost job”. Even though the total hours worked might stay the same, or even increase. For example: Instead of having one waitress come in for a 3 hour lunch shift, and another coming in for a three hour dinner shift, one full time waitress can handle both shifts if the employer is willing to keep them on for the couple slow hours in between the mealtime rushes.

The second argument you present is: “Even as individuals reach their late 20’s, they work less and earn less the longer they were exposed to a higher minimum wage, especially as a teenager.” However you fail to give us the example that you were referring to, or any explanation as to why. Leaving us to believe that the minimum wage itself is a bad thing. Could it be that students who are working in order to help provide for their families have less time to study, and interact with other people? Which is a disadvantage that continues to haunt them through college, and as they enter the post-education workforce. Also most teens working for minimum wage through high school and college are going to be from a poor background, which means they are less likely to have family connections or the resources to afford and mount an extended job search.

Also, as workers reach your late twenties, they may begin to look less desirable for a minimum wage position because they either have, or will soon have personal, and family obligations that cannot be met at minimum wage. This means they will be less willing to stay with the company unless they begin to see an increase in their wages. Since most low wage jobs are in companies that have a relatively flat hierarchy, there is simply no place for them in the company to advance to. It may be more cost effective for the company to keep turning over younger workers who don’t care what they make per hour as long as they can go out on Friday night.

Finally you offer the EITC as the saving grace of those in poverty. When really, all it is a way to federally subsidize employers failing to pay their employees a reasonable wage. But the EITC doesn’t help on a steady on going basis. It comes in once a year and drops a pile of money all at once, only to retreat until the following year. As anybody who has ever lived check to check can tell you, those balloon payments do not last long. It might cover the overdue notices on the car, heat bill, student loans, rent and maybe even some decent shoes for the kids. But if that money was coming in over the course of the year, perhaps those overdue bills could get paid on time. Which would save those families from the threat of losing their lights, heat, or the roof over their head at Christmas. Not to mention all of the late charges and additional fees those late payments create.
In addition to these problems, like all federal programs, the IETC is also disproportionately financed by those in the lower income brackets.** So those at the bottom are essentially paying the government to ensure that they still have lousy jobs.

I was surprised you left out the oft-touted ripple effects on the economy: Minimum wage goes up, union wages go up, other people’s wages go up to compensate and prices rise to pay the new wages and inflation spirals out of control. Is the argument we’ve been fed for years really true? Sort of: local price increases can be directly effected by wage increases, or local corporate scandals, or even a bad storm. However, prices will go up regardless of wage increases at any level. As more people exist on the planet our finite resources can only stretch so far. The increased traffic on the roads leads to more time spent stopped in traffic, so fuel is wasted increasing demand and a million other examples.

Remember, currency is merely a convenient way of saying “this is the part of the world that I control.” Instead of bartering with bags of corn or bread, we simply exchange pieces of paper. If the people at the top of the corporate ladders were also suffering a loss of real buying power, I might be able to understand holding off on an increase in the minimum wage, but they are doing better comparatively better than they were 40 years ago, whereas those at the bottom are doing comparatively worse. Eventually this will expand farther into the middle class, and suddenly, there won’t be any consumers left except the top tier.

Another idea you may not have entertained is that perhaps these jobs aren’t worth doing. If a full time position doesn’t pay enough to cover the basic cost of living, maybe it shouldn’t exist. If somebody is giving 40+ hours of their life to another person, they should be able to afford basic necessities, and honestly, at least a few non-essential items so their life is worth living.
You have also forgotten the basic truth about why the minimum wage exists in the first place. Find someone who remembers the dust bowl, the mass migration of people in search of work, the massive levels of poverty, and homelessness. Talk to somebody who remembers “Hoovervilles” and food rotting in crates because people couldn’t afford to buy it, and it was cheaper to let it rot than transport it to market. Find those people who still remember, and ask them if life was better without a minimum wage.

*The story was that a restaurant bought a new oven and fired three or four of its cooks because the minimum wage went up.

** The top 10 percent of wage earners in the US paid 40% or the federal Taxes collected in 2004. They made 60% of the income. (According To the President)