Los Angeles County, a region with which I am well familiar, recently approved a minimum wage hike to $15 an hour over the next several years.
I'll admit that when the $15 an hour minimum wage was initially being discussed - towards the tail end of the Occupy movement and shortly before a measure to establish the wage appeared on a Seattle ballot - I was skeptical of the idea and disposed to oppose it on the typical economic alarmism and sneering at the demographic stereotypically assigned to such jobs.
After having the discussion over and over again, and researching the issue, I eventually came around. By the time the LA County bill passed, I was getting pissed off by short sighted and flawed macros such as this one, which was running the conservative circuit on my Facebook feed today:
Besides the fact that this seems to think that the minimum wage would only apply to fast food workers, rather than raising everyone's wages; it also ignores the critical fact that the emergency personnel (as well as many retail clerks, military personnel, office professionals, manual laborers, and professional artists) are in fact also severely underpaid. It suffers from an elitist conceit that appears to argue that, because a person is new to the workforce, or performs a menial task, they are not permitted to make enough money.
I entered into an argument over a similar graphic to this one and was so put off by my opponent's cavalier dismissal of basic human dignity (complaining that such dignity comes at the expense of making him pay a marginal increase in his cost of living) that I collected the various data that had informed my reformed opinion.
Society is a cooperative enterprise. In the various liberal traditions, including democratic ones such as our republic, that enterprise further becomes collaborative. The system exists for the benefit of everyone, not simply to prop up the lifestyles of a few elite. We are remiss if we do not maintain this cooperation or advance the enterprise in a way that at is at least as beneficial to subsequent generations, and we ought to strive to constantly improve. To promote a paradigm in which entire segments of society are impoverished is antithetical to the entire premise. This is the gestalt behind the 1938 Fair Labor Standards Act, which established that workers will receive wages sufficient to maintain “the minimum standard of living necessary for health, efficiency, and general well-being.” These words, appear to me to establish that there is a legal requirement that the minimum wage be a living wage.
An easy way to check the level "necessary for health, efficiency, and general well-being" is to examine the welfare system. This system, established as a safety net, is designed to meet the needs of a person and their dependents in a manner consistent with basic human dignity. A 2013 study by the CATO institute concluded that 34 states and the District of Columbia pay welfare benefits with a value above the minimum wage. Of the 16 other states, 10 of them are among the states with the lowest cost of living in the nation and 6 of them - Mississippi, Tennessee, Arkansas, Idaho, Florida, and Kentucky - are in the bottom quartile of national average income. And a recent DoD review found that record numbers of soldiers were on supplemental income - primarily food stamps - in 2014.
The fact that the economic safety net is set at a level above the minimum amount of money we agree can be paid to a person is the clearest possible indicator that the minimum wage is too low.
What does the social safety net say a dignified wage is? In California, the maximum welfare benefit is equivalent to a pre-tax income of $37,160/year, or $17.87/hour. This benefit includes support for dependents, as the MIT calculator for a single person living in LA county with no dependents needs to make $12.44/hour - an increase of 38% over the current state minimum wage and 24.4% over the state minimum wage in January of 2016. A couple with one person working needs to make $19.53/hour. A single parent needs to make over $25/hour.
The California minimum wage in 2016, $10/hr, will still fail to match the highest buying power the minimum wage has had - the minimum wage in 1968 had an inflation-adjusted purchasing power of $10.51 in 2012.
In the post-recession economy, we are not just talking about 16 year old kids starting their first jobs when we talk about the minimum wage. We are talking about people re-entering the workplace. We are talking about people who had to accept any job they could find after layoffs. In 2013, Pew estimated that as many as half of minimum wage workers were adults. The 2013 Bureau of Labor Statistics report shows 49.6% of workers making minimum wage or lower were over the age of 25. The economic policy institute shows that the average age of a minimum wage worker is 35. 88% of them are over 20 and 28% have children. 55% work full-time.
This means that when we talk about keeping the minimum wage too low to make a living, we are impoverishing people who are trying to support families and in many cases find a way back to a job they lost circa 2008 through no fault of their own. We are additionally impoverishing people who, without additional income, are likely to become saddled with student debt, if they can pursue an education at all. These same people are increasingly likely to return to live at home, if they can ever reach a financial position to leave in the first place.
So in 34 states and the District of Columbia, the social safety net is not simply helping people "get back on their feet". The social safety net is practically a part of the wage structure. In nearly 75% of the nation, business is allowed to operate with increased overhead because the government is subsidizing wages for them. In cases where workers are holding two or three part-time jobs which are not required to provide any benefits, the government is also subsidizing the benefits.
It's time to adjust the wage.
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