“RAISING THE FEDERAL MINIMUM WAGE”
© 2015 John C. Merino
With an ever increasing segment of the adult population finding themselves employed in minimum wage level jobs with fast food, convenience store, home repair centers, grocery markets and mom and pop small businesses, a national push for increasing the minimum wage has gained momentum from Seattle, Washington and Los Angeles, California to New York State.
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Politicians and worker advocates pushing legislation in support of this movement have touted the argument that taxpayers are subsidizing employers primarily because a majority of these low wage employees fall below the government’s poverty line for annual income thus qualifying them for public subsidies.
From single workers to the families of those qualifying for benefits under the government poverty line threshold, the current subsidy of taxpayer assisted dollars includes: food stamps, medical coverage, travel reimbursement, rental subsidy, utility expenses, and day care for children.
It is proffered that single female heads of household are the largest beneficiaries of these tax payer based benefits.
Among the most argued points of the movement is that the burden on tax payers will be decreased as wages rise, thus lessening the current level of subsidies which directly benefit the employer at the tax payer’s expense.
The anecdotal argument against this wage increase from employers and trickle down supporters is fairly consistent. Fewer people will be hired, lay-offs will occur, cost of goods to the consumer will rise and small business will be further burdened under increasing government regulations.
The question I would ask is why should our tax dollars subsidize the profit margins of business? Typically, employers schedule minimum wage employees to work 30 hours or less each week. This threshold does not require employers then, to provide benefits………and who foots that bill………….we do, the taxpayer.
Who do you think pays for medical/dental coverage, day care costs, rent subsidies, transportation expenses, food stamps and the other basics of life for these low paid workers that many of us can afford? The taxpayer does.
The Huffington Post lists the top ten reasons to increase the Federal minimum wage to above $10.00 per hour. Here are their rationales.
One. Seven Nobel Laureates in Economics endorse the higher minimum wage to $10.10 by 2016, saying it does not lead to lower fewer jobs.
Two. Job losses from raising the minimum wage are negligible. Minimum wage has already been raised 23 times. Every time it was raised it was opposed by some few who said “it is going to lose jobs and wreck the economy” which is factually untrue as study after study has proven.
Three. It is a myth that small business owners can’t afford to pay their workers more, and therefore don’t support an increase in the minimum wage. In fact, a June 2014 survey found that more than 3 out of 5 small business owners support increasing the minimum wage to $10.10.
Four. The value of the minimum wage has fallen dramatically. Since the minimum wage was last raised in 2009, the price of apples went up 16%, bacon 67%, cheddar cheese 21%, coffee 27%, ground beef 39%, and milk 21%. The minimum wage went up 0%. Plus, in the 1960s the minimum wage was essentially half the average wage. If that was still the case it would now be $12.50 an hour.
Five. Saying we have a “free market” that will take care of workers is a myth. No corporations rely on the mythical “free market,” why should workers? Corporations lobby like crazy all the time in Washington DC and before every state and local government for direct and indirect public assistance. All levels of government provide widespread corporate welfare so why not provide some help to low wage workers? The Wall Street bailout cost over $200 billion. Fifty billionaires received taxpayer funded farm subsidies in past 2 decades. Corporate jet subsidy is $3 billion a year. Special tax breaks for hedge fund managers allow them to pay only 15% tax rate, while the people they invest for pay twice that much and their secretaries pay a higher percentage. The home mortgage deduction is $70 billion a year, with 77% going to people with incomes of over $100,000 per year. Giving workers more money is small potatoes compared with what corporations and the rich are receiving all the time.
Six. In fact, one way to look at this is that low minimum wage laws are government subsidies to low wage businesses. What do working people do if they do not have enough to eat or get sick or need housing? They turn to government for public benefits. For example in the fast food industry alone research by the University of Illinois and UC Berkeley documents that taxpayers pay about $243 billion each year in indirect subsidies to the fast food industry because they pay wages so low that taxpayers must put up $243 billion to pay for public benefits for their workers.
Seven. There is widespread religious support for living wages. Catholic support for living wages has been taught since 1891. In 1940, US Catholic Bishops stated: “The first claims of labor, WHICH TAKES PRIORITY OVER ANY CLAIMS OF THE OWNERS TO PROFITS, respects the right to a living wage.” Protestant churches were first on the record for living wages since 1908. Religious support for living wages has a long history and has been recently been reaffirmed by the Episcopal Church, the Jewish Council of Public Affairs, the Presbyterian Church, the Unitarian Universalist Association and the United Methodist Church.
Eight. Worker productivity has gone up much faster than wages. Workers are already much more productive. Using the 1968 minimum wage as benchmark, if minimum wage grew at same rate as worker productivity it would have reached $21.72 per hour.
Nine. It is a myth that the minimum wage is only for teens and entry level workers. Raising the minimum wage to $10 would impact over 15 million workers. 4.7 million working moms “would get a raise if we raise it to $10.10.” As would 2.6 million working dads for a total of 7 million parents.
Ten. There is widespread bipartisan support for raising the minimum wage. In a2015 poll, “75% of Americans, including 53% of Republicans, support raising the minimum wage to $12.50” by 2020.
Bonus point. You know the minimum wage is too low when….WALMART announced it will raise its minimum wage to $10 an hour in February of 2015.
As President Franklin Roosevelt said in 1933: “No business which depends for existence on paying less than living wages to its workers has any right to continue in this country.”
I’m John Merino and this is AMERICAN CHRONICLES.
American Chronicles is a bi-weekly locally produced feature on WRFA written and produced by retired Gebbie Foundation CEO, John C. Merino. Currently, John is an Adjunct Professor of Micro-Economics, Organizational Management, and 20th Century World History at Mercyhurst University. American Chronicles airs twice monthly, Friday mornings at 7:15 and Friday Afternoons at 4:35. American Chronicles features original stories (partly fact and partly fiction), commentary on local, state , national, world conditions and more.
Find past episodes at www.wrfalp.com/tag/american-chronicles/