Over the past few weeks, the most press related to jobs has
gone to the effort by fast-food workers to be paid much more, usually $15 per
hour. It seems like an easy thing to
sympathize with – they work hard, are often educated and skilled beyond what
they do, and the companies named are immense and lucrative. The workers are not unionized, seem to have
little legal representation, and number in the millions nationwide. Their push for more money seems to symbolize
rebellion against the worsening of jobs all over the country, and many have
maintained that if we could only pay them “a living wage,” such positions would
become much better and a lot of poverty would end.
It is true that there would be some good things resulting
from a higher minimum. The bad things,
however, are more substantial. I count
six reasons why the minimum wage should not be increased.
First, not every low-paying job is with a large and very
profitable company. When I read about
workers dissatisfied with their low pay, they always seem to work at Wal-Mart,
McDonalds, Burger King, or the like, never at the corner grocery store that’s
having trouble paying its bills, the new small venture where the owner is
joined by one or two $7.25-per-hour helpers, or in the back of a small town’s
only restaurant. In reality, most
low-paid employees work for places you’ve never heard of, many of which simply
can’t, from a practical business standpoint, give them anything like $15 per
hour.
Second, the country is over 19 million jobs short, and
forcibly raising pay for many will make that number higher. I don’t know the exact effect minimum wage
raises have had in the past, and I’m not sure anyone conclusively does – the
data doesn’t always agree, and it has become politicized. I don’t need to know, though, whether this
proposed 106% increase would cut 5% or 50% of jobs now paying, say, $10 per
hour or less, or how much of the effect would be immediate and how much would be
spread out over years through attrition, decisions not to grow, and business
failures from needing to set prices too high.
I see it as common sense that some
number of jobs would go away, a number extremely likely to be substantial.
Third, demand for even low-paying jobs is great as it is,
and making it higher – possibly much
higher – will not help anyone. Even in the
last decade’s good times, a Wal-Mart opening near Chicago got 25,000 applications
for its 350 supposedly reviled jobs.
When workers needed are too scarce, businesses will generally offer more
money anyway, so the effect of a higher minimum would consistently be to force
owners to pay more than the market requires.
As before, that may not cause damage if they are unusually profitable,
but otherwise it is in effect an extra tax on employers – not what we want when
jobs are as scarce as they are.
Fourth, for many Americans the largest inequality is not
between those being paid at or near the minimum wage and others working for
more – it is between employed people and those without jobs at all. To name just one statistic, over 10 million
are officially jobless. Many of them would
be delighted to have any offer, even if for less than $15 per hour. By adding to the ranks of those who have no
way to legally support themselves, we would create an even larger gulf within
our country.
Fifth, the number of those a higher minimum would actually move
out of poverty would be remarkably small.
Twenty-four percent of those at the minimum wage are teenagers, and over
20% more are in their twenties. Most Americans
of those ages are living with employed parents.
Many are also in areas where the cost of living is too high for $15 per
hour to allow them to be truly self-supporting, even if, unlike many at food
and service positions, they work 40-hour weeks.
Sixth, forcing the lowest pay rate much higher, even if not
the more than doubling the protesters are requesting, would disproportionately
hurt businesses in less prosperous areas of the country. Although many low-paid fast-food workers are in
large cities, those in less populated areas, where the cost of living is much
lower, would not be allowed to work for less.
There are many American towns and counties where most employees, even
those we don’t think of as in the same boat as fast-food workers, earn less
than $30,000 per year, and aren’t broke either.
Police officers, teachers, and a variety of office workers, for example,
often start under that amount, and with many houses available for, believe it
or not, $50,000 or less, they often have no real financial trouble. If their jobs go away, it would be an
unmitigated loss for the higher minimum wage.
How about other ways of helping those with low income? There have also been public controversies
about unemployment benefits and food stamps.
In those cases, the liberals are right.
When we are maintaining 4.1 million out of work for 27 weeks or more,
there is no excuse for not extending those payments to 39 weeks or, preferably,
52, nationwide. Likewise, food stamps,
seldom abusable when delivered through ATM-style cards and redeemed only when
identification is presented, only assure that Americans can eat; while they need not be designed to provide
more than the basics, there should never be a question that people who need
them should have them. Yet the minimum
wage is not the same thing. People
working can survive. Confusing them with
those not assured of either is destructive.
And if their jobs would go away due to simple business decisions caused
by forced higher pay, we would have only ourselves to blame.
