The debate over the federal minimum wage has come to the surface lately with several national news items including a strike by fast food workers across the nation, news that workers at large retailers and chain restaurants were being offered advice from their employers on making ends meet and food-drives to help the employed poor, as well as calls from President Obama and others to raise the wage.
The proposals call for hiking the current $7.25 minimum hourly wage to somewhere between $9 and $10.10 from the politicians to as high as $15 a hour from the organizers of the nationwide one-day strike.
Raising the minimum wage a buck or two would certainly help the lowest paid and, despite some misconceptions, not hurt job chances or raise prices significantly on store shelves.
Data from the states that have raised their minimum wage over the federal level, plus many cities and counties, show scant evidence that higher minimum wages cause jobs to dry up. In fact Georgia, allows companies to pay employees as low as $5.15 in some situations while neighboring Florida requires a minimum of $7.79 per hour, yet the employment pictures appears about the same.
This makes sense if you think of how businesses operate with enough employees to get the job done but few superfluous positions. American businesses rarely carry un-needed employees. When they have a need they hire; When they don’t, they cut back. Another buck or two per hour won’t affect this according to empirical evidence.
Politifact.com found 3.6 million Americans or 2.6 percentage of all those employed make at or below the minimum wage. It’s thought that a small rise in their pay would reduce the poverty level numbers among poor families.
So giving them a permanent hike is a sound, but not monumental, decision. One economist estimated that even if they went to full $15 per hour and fast food restaurants wanted to pass the cost along to customers it would cause the price of a $3 menu item to only go to $3.60 – not a devastating jump.
The need to raise the wage is often tied to statistics showing how hard it is to run a household on such low pay, along with the growing economic divide between rich, who are faring well in the current economic environment, while lower-paid positions have seen flat or shrinking pay for many consecutive years.
These arguments are where the minimum wage debate derails.
A better approach is not seeking ways to help heads of households toiling at minimum wage but asking why so many adults can’t find anything but minimum wage jobs?
This goes to the heart of the national economic problem – why aren’t there enough decent-paying jobs to go around? Instead of just giving them a few more bucks, what’s needed is a path to move up to better jobs where the concerns are over benefits not what’s the lowest amount that you can legally be paid.
Entry-level jobs with minimum wage are fine for high school and college students or for anyone wanting temporary cash but they are never going to be a middle-class career path.
For an answer as to why so many people are stuck there, we must look at case by case situations. Some may lack the skills needed to get a better job; others may have seen positions outsourced or automated; while others may be in areas where industries have collapsed leaving few job choices. These problems will take much more effort and creative thinking to address.
In the long run, better jobs and more of them are needed, but that remains a distant goal, so in the meantime hiking the pay of those stuck at the minimum wage is a regrettably appropriate choice.