Sunday, May 30, 2010

Raising the Minimum Wage ???

Raise the Minimum Wage??

I have suggested raising the minimum wage in several recent blogs, as a method for reducing the demand for illegal immigrants as well as to help alleviate domestic poverty And thereby, indirectly, alleviating some problems in our schools. 

But many readers may well react with horror to the suggestion.
Raising the minimum wage needs to be defended. I will do this in the next two blogs. Today I want to write about the morality of raising the minimum wage. I do not want to preach; I am not a prophet. But I do want to raise some questions about the morality of paying someone $7.50 an hour for doing their work.

First some facts. A family of four can expect to pay upward of $800 a month for not a very great apartment. If you drive 10 miles to work, five days a week, and drive another 10 miles a day to the store or elsewhere, it will cost you about $300 a month to operate your car. If you are a careful shopper, you may be able to feed a family of four for about $200 a month. If you earn $7.50 an hour, your monthly wage will be a bit more than $1200. Well that's just about what, according to a very conservative estimate, a family of four and needs to pay for rent, food, and transportation. Clearly a second member of the household has to go to work to pay for clothes, and the many other things Americans buy or pay for, such as insurance for the car, or health insurance. 

All this time we are not even thinking about saving any money, putting away money for old-age, or buying a home. A two-wage earner family earning minimum wage is always sure to be short of money. We have not even started thinking about vacations, or high-definition television, or cable, or telephones, computer— genuine necessities today-- or anything else people might want to do when they have a bit of leisure. Clearly that will require somebody taking a second job.

This is life on minimum wage. Here are some relevant questions:

Whose fault is it? When you raise questions about minimum wage earners, many people would say: “well if they don't like their job, why don't they get a better one?” The implication is that if people are poor, it's their own stupid fault. Why don't they get a better job?

But that question ignores the fact that many jobs, these days, pay only minimum wage. If Joe Blow gets a better job, then the minimum wage job is perhaps filled by Jane Doe, and if not by her, by Bill Roe. The industry with the highest proportion of workers with reported hourly wages at or below $7.50 is leisure and hospitality (about 14 percent). About three-fifths of all workers paid at or below the Federal minimum wage are employed in this industry, primarily in the food services and drinking places component. The jobs exist; somebody has to fill them. This scandal is not that Jane Roe makes minimum wage waiting on tables, but that the owner of the establishment does not pay her a living wage to do strenuous work.

How could her situation be improved? If the federal government raised the minimum wage, all the service jobs would pay more. Most likely the owners of restaurants and bars or other places of entertainment would not absorb the increased cost themselves but, instead, pass them on to the customers. Eating out, going out drinking, going to a hotel or casino would all be more expensive.

Before you declare, firmly, that you will not be willing to pay higher prices for entertainment or your weekend night out, consider also this: The Federal Poverty Level for 2009 was pegged at $22,000. The family that brings in $15,000.00 a year gets some money from the IRS at tax time-- the “negative income tax”--they are also entitled to food stamps, subsidized housing and other benefits. You and I pay for those anyway.
The choice is not between more money for the low wage earners or more money for us. The choice is between paying for inadequate pay scales through taxes or paying for decent pay scales when we make purchases.

We end up paying to help out the workers who earned the lowest wage. But we still have a choice. We can get our entertainment and other commodities cheaply and force the people who wait on us to run from one government agency to the other to ask for help with their food, with paying the rent, with the cost of health care. Or we can pay higher prices so that the service staff can have a decent wage, live their life in dignity, able to pay their own way without having hold out their hand to a variety of government bureaucrats.

Is a minimum wage of $7.50 morally justified? Should you and I not do our part to guarantee a decent life to everybody in our country? Think about it.