24 Mar Raising the Minimum Wage
There has been much talk about the need to ensure that all Americans earn a “living wage” salary, with the fast food and retail industries being a focal point.
What I haven’t heard enough of is an open conversation about what it really means to pay fast food and retail workers $15/hour and what it means for everyone else.
My thoughts on the minimum wage are complex. I think people should be paid more, but just how much more? I’m not sure. A $15/hour wage hike affects more than just the workers who receive it – and I would argue that those workers’ skills don’t justify it. So, what does it mean for everyone else and the society at large? Let’s get into it.
Who/What are minimum wage jobs are really for?
“The purpose of the minimum wage was to stabilize the post-depression economy and protect the workers in the labor force. The minimum wage was designed to create a minimum standard of living to protect the health and well-being of employees.” Since then, many have come to accept that minimum wage paying jobs are mostly for teenagers or those new to the workforce and that these jobs help the acquire experience and skills that they can use in post-secondary education or higher levels of employment.
How will raising minimum wage affect the economy – and how long before $15/hour is the new poverty level wage?
Economists have been debating this issue for years. You can find many who advocate for the increase of the minimum wage and those don’t think it’s good idea or that the evidence to support the move isn’t all there, like Robert P. Murphy. (See his October 2015 argument here.) The fact is that there will be negative impacts on some jobs. Just look at how some companies are moving to automated services at restaurants (which they’ve been using is Asia for years). At the very least, lots of people will be replaced by kiosks.
The other question I have is: What will we do when $15/hour becomes the new $7.25/hour? Are we to constantly raise the minimum wage?
The fact of capitalism and the global economy is that, to some extent, you need poverty. You can’t have a sustainable economy without it. It would be great if everyone in America earned close to $30,000 per year, but consider the damage this does. You would no doubt see fewer people enrolling in college and trade school, which would lead to a decrease in our skilled workforce. I concede that people’s lives would be better overall if wages were higher, but the proposed model isn’t hitting the mark for me.
Consider this: If wages increase across the board, companies will raise prices for their products and services. Are you willing to pay $10 for that $5 value meal or $30 for the currently $15 item at a casual restaurant? I haven’t seen where the public is willing to pay more for fast food services or retail. This is something we must take into account.m
Let’s go another step farther: If fast food and retail companies are forced into paying higher wages, what’s to stop employees at other business from demanding the same? After all, many entry level college graduates don’t make $15/hour (I’ll get more into this below). And can you imagine the outrage when those companies whose business are easily outsourced, leave? We’ve seen this before.
By paying the aforementioned workers the same or more than some college grads, we are fostering a mentality of mediocrity and entitlement, and encouraging a lack of ambition. By pushing for an increase in the minimum wage, people will become more passive and lackadaisical about pursuing higher levels of education and higher skilled jobs. Why should you go to college when you can work at Chick-Fil-A, earn the same salary, and not be in debt?
Now, I know the argument (because I’ve made it myself): “everyone can’t go to college”. Of course not. That’s why there are vocational schools or specialized learning programs that can offer the benefit of a college degree at a fraction of the cost of college tuition.
What I want to know is this: Instead of pushing the government to apply pressure on corporations to increase their wages – which they’re not inclined to do – why not push the government to provide access to quality education for more people? This will lead to more people to higher wages and likely out of poverty. This is assuming they can find employment, of course (and this is another issue altogether). College graduates are more likely to get married… and married couples have higher incomes and are less likely to be in poverty.
There are many job openings that go unfilled because our workforce doesn’t’ have the necessary skills to fill, so business either outsource (which pisses people off) or they push to bring the qualified workforce here (which pisses people off). Most of what I see is a lot of people being pissed off and not enough people being engaged in politics at their local, state, or federal levels. And the fact is that you cannot justifiably be pissed off with government if you’re not a part of the conversation by voting, campaigning, and donating funds to candidates.
Should fast food and retail workers earn more than soldiers or teachers?
I’ve read about the benefits of raising the minimum, and I get it. In case you haven’t, you can read some of points and facts used by Senator Bernie Sanders when he introduced a bill last summer that would raise the minimum wage, over a 5-year period, to $15/hour.
How can we be serious in raising the minimum wage for fast food and retail workers when there are teachers that don’t make that much? You don’t care about education or teachers? Cool. Let’s look at the military that most people at least pretend to love and respect: most service men and women don’t make $15/hour.
Just take a look at the latest (2015) military pay scale at Defense.gov: You would have to be an E-4 who has been enlisted for at least 6 years to earn the equivalent of what many are proposing be paid to fast food and retail workers. You can argue that they get benefits, etc. But did you know that soldiers pay in for their medical insurance and other “benefits”? So, it’s not free. (They also have to cover housing and food, just like the rest of us.) Now, I don’t even know what an E-4 is, but I do know that fast food and retail employees should not be paid at the same rate as someone in the military with six years of experience.
If we are going to increase the minimum wage, then it has to apply to government employees as well (teachers, soldiers, police officers, fire fighters, etc.
I don’t know.
I fundamentally support the idea of increased wages for everyone, not just those mentioned in this article. I think employers deserve a larger piece of the pie they make profitable for their companies, but I really don’t see how we can do it the way it’s being proposed. And raising the minimum wage to $15 for food services and retail is not where our focus should be. As I said earlier, if you want to have fewer adults in the food and retail industries, retrain them, but don’t tell me the person who messed up my order or the one who withholds condiments (as if their job depended on it) should be paid $15/hour. I’ve worked in both retail and food services and it’s not difficult – annoying and frustrating, yes, but not hard or challenging. These jobs require basic skills and very little training.
I’m not dissing anyone employed in those industries (my mom worked a little at Wal-Mart back in the day), but I had to take a step back. I used to argue with people about why, at a human level, we need to raise the minimum wage. However, as I dug deeper into research and considered the state of America at this point, I think the best way to impact those individuals and the society at large is through a re-thinking of how we do things. We need to focus on providing quality education to our people and to providing training that enables minimum wage earners to not seek permanent employment in low-paying industries.
I don’t think that the government should bail out big companies by providing food stamps and other programs just to ensure that those companies’ employees “make it”, so I know that something has to happen – I just don’t know what.
If you have the answer, please let me know, because I genuinely want to know.
Below are the sources I mentioned in the article. Check them and other sources out, then make a decision about what you think.
RELATED IN THE LOOP…