Minimizing the Worker: Why Attacks on Raising the Minimum Wage Come Up Short

Minimizing the Worker: Why Attacks on Raising the Minimum Wage Come Up Short

Minimizing the Worker: Why Attacks on Raising the Minimum Wage Come Up Short

Over the course of a generation productivity in the American workplace has doubled and CEO pay has increased exponentially. So with all that success, why has the minimum wage failed to keep pace even with simple cost-of-living increases? And why should anyone willing and able to work full-time be living below the poverty line?

   

Minimizing the Worker: Why Attacks on Raising the Minimum Wage Come Up Short

image by: Dandelion Salad

The federal minimum wage is $7.25 per hour. While running for president Barack Obama proposed increasing it to $9. The Center for American Progress proposes a formula that the Washington Post reports would make it $10.04. Senator Tom Harkin and Representative George Miller are pushing for $10.10—a bandwagon on which President Obama has jumped. The City of Seattle is going with $15. Rep. Barbara Lee is pushing for California to go all the way to $26.

That's a lot of numbers. And you can find even more arguments for and against an increase, as well as several on why there shouldn't be any minimum wage. Some of these arguments are partisan politics as usual, but others seem to be genuine disagreements among experts about the effects that minimum wage in general, and raising it in particular, have/would have on the economy.

But there's one point on which everyone agrees: adjusted for inflation, today's minimum wage is around 30% lower than it was a generation ago. This despite the fact that during the same timeframe worker productivity has doubled.

U.S. Minimum Wage

The question that opponents of a minimum wage increase (we'll called them OMWIs) should be compelled to answer is why those at the bottom end of the wage-earning spectrum are worth less today than they were previously.

While the OMWIs are at it, they might also tell us how it can be a good thing to have more full-time workers falling below the poverty line, because that is a direct result of the failure of the minimum wage to keep pace with cost-of-living increases. When I was born in 1968, a minimum-wage job was just enough to keep a family of three above the poverty line (at least if the wage-earner worked full-time for the entire 52 weeks of the year). But since the early 1980s that same minimum wage job has not been enough to keep even just a two-person household out of poverty.

As pointed out by Moyers & Company writer John Light, minimum wage fell off track in 1981, when, in an effort to combat inflation, the minimum wage was frozen at $3.35 per hour until 1990, by which point the old gray mare wasn't what she used to be. As if that weren't setback enough for those on the bottom rung of the economic ladder, between 1997 and 2007 the minimum wage was once again frozen.

These freezes at the bottom of society were not reflected at the top. Quite the contrary. Whereas in 1980 CEO pay was (depending on whose numbers you use) somewhere between 26 and 42 times that of the average wage-earner, today CEO's make 230–380 times more.

Since the average wage-earner makes more than double the minimum wage, that means a minimum-wage-earner has to labor for about four months to make what your average CEO gets for putting in an hour's worth of work.

Were increases in the minimum wage tied to increases in CEO pay (and why shouldn't they be? OMWIs offer all kinds of arguments for why CEOs deserve more money, but not about why a CEO's worth increases more rapidly over time), the minimum wage would be over $2 per hour higher than Rep. Barbara Lee's $26/hr. proposal.

Too high? How about tying it to that increased productivity we mentioned earlier? In that case the minimum wage would be somewhere around $20 per hour. Still too high? How about tying it just to the overall increase in average wages? In that case we'd be looking at something above the $10.10 movement. Still too high? How about just keeping pace with inflation and keeping the minimum-wager above the poverty line? That would mean bumping it up to $9.25.

Let's keep in mind that being above the poverty line means you're in the land of milk and honey. Currently the poverty line for a two-person household is set at $16,078 (in 2013 dollars). Unless you're completely out of touch with economic reality, you realize that $16,078 is not enough money for one person to provide comfortably for herself, never mind for someone else as well. Nonetheless, today's minimum wage earns a full-time worker almost $500 less than that. (Before taxes, which are going to take about 10% off the top.)

OMWIs never seem to mind the gap between the rich and the poor, seeming to live in—or feigning—ignorance of poverty's damaging effects not just on the poor, but on the whole of society. Poor people have less to spend. Poor people are less educated, less well nourished. Poor people require more social services. Poverty breeds crime and discontent. Poverty is so damaging that Nobel Prize-winning economist Milton Friedman advocated simply giving the poor money to help them stay above the poverty line.

Proponents of raising the minimum wage ask for no such thing. They simply want to ensure that no-one willing and able to work full-time be made to suffer the oppression that is poverty.

"We know our economy is stronger when we reward an honest day’s work with honest wages," President Obama said in his 2013 State of the Union address. "But today, a full-time worker making the minimum wage earns $14,500 a year. Even with the tax relief we put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong."

There are all sorts of ways to talk about why increasing the minimum wage is wrong. But without the power to explain why it's right for a full-time worker to live in poverty, or why CEOs should enjoy increases at a hundred-fold faster rate than their average employees, the OMWI argument falls short.


 About the Author:

Except for a four-month sojourn in Comoros (a small island nation near the northwest of Madagascar), Greggory Moore has lived his entire life in Southern California.  Currently he resides in Long Beach, CA, where he engages in a variety of activities, including playing in the band MOVE, performing as a member of RIOTstage, and, of course, writing. 

His work has appeared in the Los Angeles Times, OC Weekly, Daily Kos, the Long Beach Post, Random Lengths News, The District Weekly, GreaterLongBeach.com, and a variety of academic and literary journals.  HIs first novel, The Use of Regret, was published in 2011, and he is currently at work on his follow-up.  For more information:  greggorymoore.com

 

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Last Updated : Monday, September 19, 2022