It’s Only Fair To Raise Minimum Wage
Let’s hear a round of applause for the folks who always told us to put our faith in the free market. How right they were.
On April 15, Democrats in the Senate made another bid to raise the minimum wage from $4.25 an hour to $5.15 an hour. Two days later, a group of 20 moderate Republicans in the House trumped them with a proposal to make it $5.25 hour.
Do I hear $5.35? Do I hear $5.50? Going once, going twice …
Of course, the invisible hand of this particular market looks an awful lot like the glad hand of politics. Even the Gingrich-Dole Corp. apparently has decided to stop selling an argument the people refuse to buy. This issue finally may get to a congressional vote.
A nearly unanimous American public - some 84 percent - believes the minimum wage needs a lift. Working a 40-hour week, 52-week year for $8,840 just doesn’t seem fair.
And fair is the F-word now being used regularly whether we’re talking about shameless pay scales at upper echelons of chief executive officers or shameful pay scales at the lowest levels of workers.
Last week, for example, a few stockholders at the annual AT&T meeting had the nerve to query their own maximum-wage earner. Chairman Robert Allen, who was awarded $5.2 million in compensation and a large grant of stock options while firing 40,000 workers, was asked to justify his personal earnings during corporate downsizing. He had the audacity to explain - complain? - that he hadn’t even gotten a raise: “I made essentially what I was paid before.”
On the whole, the CEO pay scale is rising 20 percent to 30 percent while median wages are stagnant and the minimum wage has fallen, due to inflation, to a near record low. As Labor Secretary Robert Reich has said to anyone who’ll listen, “It’s hard to accept that kind of mathematics.”
Especially at the bottom.
Until now, the arguments against raising the lowest wages of workers have been twofold: (1) that minimum-wage workers are just teens or “secondary workers” (aka women) and (2) that raising wages will result in job losses.
Well, only 12 percent of the Americans who work for the minimum wage are teenagers from families with above-average incomes. Nearly two-thirds are adults over age 20.
As for the pin money myth, some 58 percent of minimum-wage workers are women whose $4.25-an-hour job brings in an average of half the family’s earnings. About 40 percent of minimum-wage workers are sole breadwinners, and the overwhelming majority of those are single moms.
It’s true that if you raise the minimum too high, some employers will make do with fewer workers. But even in the world of dueling economists, there’s general agreement that a 90-cent raise over two years will have only a minimal impact on jobs.
And even if a raise does result in some job losses, what is the point at which we have to make work worth it?
Here we get back to the F-word. The minimum wage is inextricably tied to welfare. You remember welfare reform? As it originally was cast by Bill Clinton in the 1992 election, “ending welfare as we know it” was connected to the idea that “no one who works full time and has children at home should be poor anymore.”
There was a legitimate concern that the difference between work and welfare had been erased or even reversed. Women who worked at entry-level wages were doing so for “chump change.”
Clinton’s original plan included ways to raise the value of work - boosting the federal earned income tax credit, making sure workers had health care and raising the minimum wage.
But the “Contract with America” crowd tends to believe that only the rich need incentives to work; the poor need penalties. This second round of welfare reformers wants to make work worth more by making welfare worth less - or by cutting it off.
More states are talking about throwing mothers off welfare at the end of two years. If they have no choice but to work and if work doesn’t pay enough to support their families, what exactly are they supposed to do? Give the kids to Robert Allen?
A 90-cent raise isn’t going to make anyone rich. It’s still lower in real terms than the minimum wage in the 1960s. But 90 cents will make a real - $1,872-a-year - difference.
If there’s anything Americans agree on, it’s the rock-solid belief that people who work hard should be able to feed and house their children. It’s what makes the work ethic ethical.
Anyone who doesn’t see this meager raise as a bare minimum standard of fairness once again may experience the wonders of the free marketplace. Going, going, gone.
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