Raising the Minimum Wage

 One of the most interesting proposals made by the President during the state of the union was raising the minimum wage to $9 an hour.  Let’s see $9.00 an hour after a 40 hour week gets you a whopping $360!  Wow, that puts you right across the poverty line (at $11,500 a year for a single person under 65).  No so much for a family of four though, and I hope you don’t need a car or something. Without overtime that generates about $17,280 yearly so you’ll probably be sharing that apartment with 2 or 3 other families.

 What is really interesting about this discussion are the arguments against it, like everything else it will “Crush small businesses into shedding jobs” and “force employers to outsource!”   I wonder what’s forcing them now?  However, outsourcing really isn’t a factor since the vast majority of minimum wage jobs are local, you can’t call China or India to get your lawn mowed and it’s not economical for Walmart to import workers each day.  Don’t think they haven’t thought about it though.

 Most of the jobs we’re talking about are in service industries like hotels, restaurants and retail stores.  Right now in NJ the minimum wage is $7.25 with a ballot initiative in the works to raise it to 8.25 and stick a cost of living increase on it as well.  That will have an impact on restaurant checks and hotel bills, but then again people making $9.00 an hour are still going to put all of that money back into the economy.  Maybe they’ll make enough to feed their families on a regular basis.  After all, we’re talking about working people here.  People working some of the most grinding and hard jobs there are.

Two of my favorite arguments are “let the market decide” and “That money will all go to teenagers for summer jobs.”  Are we talking about the market that decided that child labor or slavery was a good idea?  Or is this the market that decided it wasn’t?  Truth be told we are the market.  There is no magical “market” in the clouds passing judgment on the price of things, it’s just us.  We decide what we will pay and whether we’re going to allow certain profitable practices to stand.  We have standards and mostly they don’t include treating our working neighbors like bonus items at a tag sale.  There should be a realistic, livable, minimum wage, if you can’t afford to pay a person that, then you shouldn’t be in a business that has employees.

As for teenagers getting all the money, I think this shows that the arguer doesn’t have a full understanding of just how many minimum wage jobs there are, and who is doing their best to hold them down.  More than 50% of minimum wage employees are adults.  Besides, is that an argument for paying teenagers “slave wages?”  Good luck with that.

That complaint always reminds me of the phenomena of someone totally uninformed about a job judging what someone else should make at it.  Minimum wage, teachers salaries, and those of all public employees seems to always bring out the critical eyes of taxpayers who are convinced that no one should make any more than they do, and it’s even better if they make far less.  I’ve never understood the benefit of my kids getting educated by the cheapest teacher or my food being served by someone who isn’t going to make their rent because of medical expenses.  In fact I often wonder why these same taxpayers seem satisfied with any pronouncement that such and such a job doesn’t deserve a particular salary.  How would they feel if someone said that about their salary?  Still it’s our rights as taxpayers to complain about it, even when we don’t know what we’re talking about. 

I believe the bottom line here is that a higher minimum wage does boost the economy.  In fact states who mandate a higher minimum wage than the federal standard have less unemployment, even in these tough times.  Any at rate not putting a cost of living adjustment of the minimum wage really is a “slave wage.”  The price of everything else is always rising, to lock a minimum wage is just cruel and not very realistic.  One way or another, New Jersey’s is going to go up (unless you think the public question wont pass)  and get tied to cost of living.  At least that’s a start.