Worried about this potential Economic Armageddon, I decided to do some research on my own. Oddly enough, the data I could find was mixed and not at all conclusive. I went back to the original news feed article that caught my attention in the first place, curious to see if I just missed the source citation, but none caught my eye. What did catch my eye was the advertising banner along the side of the web page - for a large fast food chain that just happens to employ a large number of minimum wage employees. Hmmm, that made me wonder.
I am thinking the article itself is not worth citing. And probably not worth writing about, except that it follows a series of bloggers, reporters and commentaries, all of whom raise a loud voice opposing an increase of minimum wage. What concerns me is these articles spend most of their time criticizing the minimum wage workforce and the mechanisms employed to obtain a better standard of living for them. Many of these critical voices use the following criteria to denounce protesters and strikers for their campaign:
- Minimum wage would only benefit teenagers. Guess again. 88% of minimum wage earners are 20 or older. About 55% of those workers are women. See Minimum Wage Mythbusters from the United States Department of Labor site, or look at the numbers yourself at U.S. Bureau of Labor Statistics from April of 2015 to see a more complete breakdown of the numbers by age groups.
- Minimum wage was not meant to provide a sustainable income. Weeellll....actually that WAS the intent of Franklin Delano Roosevelt when he passed minimum wage into law in 1933, as can be seen in his statement on National Industrial Recovery Act:
"In my Inaugural I laid down the simple proposition that nobody is going to starve in this country. It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By "business" I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white collar class as well as the men in overalls; and by living wages I mean more than a bare subsistence level-I mean the wages of decent living." - FDR (The entire statement can be found at FDR Library, additional discussion can be read at Misconceptions: Minimum Wage Jobs aren't supposed to be careers.
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- Minimum wage workers are lazy and don't want to work. They should stop whining and picketing and striking and work harder if they want to get ahead. I am sure the same was said of the 250,000 Pullman workers who went on strike in 1894 looking for better wages and better hours. Or of the 147,000 Anthracite Coal Strikers looking for better wages and conditions in 1902. Perhaps the same was said of the 400,000 Textile workers in 1934 and the 500,000 Steel workers in 1959 or of the 210,000 Postal workers in 1970 and the 185,000 UPS workers in 1997. (see 10 Greatest Labor Strikes in American History to read more). Judging by the long hours and working conditions these individuals faced, I would rule out massive laziness to account for the situation that they found themselves in. As working harder and longer hours evidently did not help them earn more money to better their lives, the tool they turned to instead is called collective bargaining. While this did not always achieve their aim, it was effective in drawing attention to the plight of the workers. In many cases, the protests and strikes resulted not only better wages and working conditions, they also brought health benefits, training and safety protocols and elimination of child labor as well as educational opportunities. What started out in many areas as a number of unsatisfied workers wanting a better life later became what is known as progress. The unification of workers has resulted in many unions. For more info check out Think Progress or take a look at this CNN Article about what unions have done for us. Based on this model, minimum wage workers are looking for a voice to better their lives, not looking to get out of working.
- Minimum wage jobs are mindless and do not require skills. All I can say is you better hope they don't hire me to flip burgers anytime soon, unless you like burnt hockey pucks served between soggy buns. And if you think dealing with the public is a cake walk and customer service is not important to business, tell it to Steve Easterbrook (CEO of McDonalds) who recently stated "If you can retain, or attract and retain the talent, and have motivated teams in a restaurant, typically we will see better levels of customer service and that will help us in the competitive environment we are in." (See CBS Chicago for full article about McDonalds attempt to raise wages over the minimum.) While the skills needed to obtain many minimum wage jobs may be lower than that of a skilled tradesman or an accountant, so is the pay.
- Minimum wage jobs are not really necessary in today's economy. Really? Without the guy frying up a storm at the fast food joint, we would have gone hungry last week when we only had ten minutes for dinner between events on a particularly hectic day. Maybe if I had planned better, we could have packed a dinner, but that would have required a trip to the grocery store, another location that typically pays at the lower end of the wage scale. Looks like I either have to rely on people in these positions or become a farmer. The latter is not a good option if you read my post about my gardening skills.
- Raising minimum wage would put the unskilled workers on par with salaries of skilled workers in professions like teaching and economists. When I read this in a blog post I actually laughed out loud. My math skills may not be too savvy, but the national median pay for K-12 teachers is somewhere around $43,000 a year while an economist is listed at $74,900 a year (per Payscale.com), which is not quite the same as earning the currently proposed federal minimum wage of $15 per hour that would result in $31,200 a year, if that person worked full time, that is.
- Minimum wage should be left to negotiation between companies and their employees and the government should have no right to set this standard. I suppose this sounds like it would make sense and is actually not a new argument. Back in 1935, minimum wage was declared unconstitutional. However later it was reenacted in in 1938 and then ruled constitutional in 1941 by the Supreme Court. But, keep in mind, many of the companies who have voiced this complaint about government interference had no problem requesting government assistance. During many of the major strikes in history, government troops have been employed against the striking workers. In the case of the U.S. Postal Strike, the National Guard was actually employed to replace the striking workers, which proved to be ineffective. In 2008, the auto industry requested (and received) a government bailout for many of the main players to remain operational.
- The economy cannot afford a higher minimum wage and there would be massive job losses if we raised the federal minimum wage. As I mentioned earlier, this appears to be very divided argument. If you read the report issued in 2014 from the CBO (Congressional Budget Office) The Effects of a MinimumwWage Increase on Employment and Family Income, or the Forbes opinion voiced by Michael Saltsman in 2014 article The Record is clear: Minimum Wage Hikes Destroy Jobs,(citing sources such as the Federal Reserve Board and the National Bureau of Economic Research), it would seem that such action would result in substantial job losses. But others, like Paul Krugman of the New York Times article Raise that Wage from 2013, and Economic Policy Institute on Raising the Federal Minimum Wage 2014 post by Doug Hall as well the United States Department of Labor web site (listed earlier) and the Center for Economic and Policy Research published by John Schmitt take another view on this that does not support that claim. All the debate over minimum wages would seem to beg the question, are businesses so impoverished that they cannot afford to pay a living wage? If they are, perhaps they should re-evaluate their model.
After some consideration, the face of the minimum wage labor force and the arguments portrayed to us on the evening news and through our news feeds look a little different. And Economic Armageddon seems less sure. Emotions run high on this subject. Some may feel threatened by a potential shift in their economic status that would result from raising the status of others. To their credit, most worked long and hard to obtain their current economic status and they feel that others should too. Since I am not in line to inherit millions, I tend to agree with them.
With this in mind, and now knowing that the vast majority of the minimum wage earners are not shiftless, lazy persons looking for a free hand out (as seems to be the prevalent opinion), I have to wonder, do the people currently working minimum wage jobs have the same potential to get ahead that many of these scathing voices had? Looking back on the short history of minimum wage during my working career cast some doubts on the feasibility of this objective in today's economy. Extending a search back 20 years, I took a look at minimum wage in my state and some basic costs associated with everyday living. According to Illinois Department of Labor, minimum wage in 1995 was $4.25 an hour. Gas at that time was $1.15 a gallon (see 1990's Flashback or Statista). Which meant with a 20 gallon tank it took about 5.4 hours work to fill the tank. Eggs were about $1.16 a dozen and milk averaged about $2.96 a gallon. Average monthly rent listed in the 1990s shows around $465 a month per The People History (though we payed an average of $500-$600 in the area we lived in), which equated to about 118 working hours. In order to invest in a future, college education seemed essential. At the time, college costs per year for a public institution were just over $3,600 for a two year institution and in the ballpark of $5,700 to attend a 4 year institution. (I have rounded these numbers, see Fast Facts from the National Center for Education Statistics to view the chart, their information is obtained from US Department of Education). A struggle, to be sure.
Fast forward to today's world. Illinois state minimum wage is set at $8.25 per hour. Gas prices where I live today are at $2.89 a gallon (Illinoisgasprices.com), which would take about 7 working hours to fill my 20 gallon tank. Other basic prices have increased as well, such as eggs at $2.49 a dozen, milk at $4.32 a gallon and rent that averages around $1000 a month for a 1 bedroom apartment (now taking 121 working hours for basic housing). These figures were obtained from Numbeo cost of living with Chicago as the base model city. Actual costs in my town are slightly lower, though not much. Moreover, college costs have soared, now averaging $8,500 yearly for attending a two year public institution and $16,800yearly for four year public institution (numbers also obtained from Fast Facts from the National Center for Education). With these costs, getting ahead looks more and more like a distant dream after the realities of just trying to stay afloat.
But what about government aid and relief agencies? If you have watched the news recently, it abounds with stories about the rising cost of groceries (remember, I mentioned the cost of eggs and milk). Available government sponsored food programs are only meant to be a supplement to family food costs, far beneath what it takes to feed a person. (Snap benefits are just under $50 a week max benefit for a single family household, less if there are more individuals in your household, providing you qualify for the maximum benefit - See USDA website for additional information.) Food pantries and other relief agencies are shrinking. If you still have time to study after longer working hours now required to put gas in your car and provide you with a place to live, you might apply for education assistance, but keep in mind Federal Pell Grants available to help advance education will only cover about $5,775 annually maximum (providing you qualify and if you are eligible for the maximum amount) based on information retrieved from US Department of Education.You might be able to get a student load (if you qualify on your low income). From the standpoint of someone struggling on minimum wage, the outlook may seem very bleak.
Does that mean that I think that raising the national minimum wage from $7.25 an hour (state minimum wages vary - in Illinois the current rate is $8.25 an hour as listed on Illinois Department of Labor website) to $15 an hour is realistic? Not necessarily. However, it is a starting point for labor negotiations. After all, a car dealer sets an asking price for a vehicle with the expectation that there will be negotiation that may lead to a lower, but acceptable price point for both parties involved. Hopefully we can encourage our government to reach this middle ground based on economic realities for both the companies involved as well as the true labor force represented. Not the labor force created in the media. Not companies who rely on repressed wages to maintain profitability. Not the opinions of inflammatory articles with well placed ads. But with a real objective to better the standard of living while building and maintaining a sustainable economy.
With this in mind, and now knowing that the vast majority of the minimum wage earners are not shiftless, lazy persons looking for a free hand out (as seems to be the prevalent opinion), I have to wonder, do the people currently working minimum wage jobs have the same potential to get ahead that many of these scathing voices had? Looking back on the short history of minimum wage during my working career cast some doubts on the feasibility of this objective in today's economy. Extending a search back 20 years, I took a look at minimum wage in my state and some basic costs associated with everyday living. According to Illinois Department of Labor, minimum wage in 1995 was $4.25 an hour. Gas at that time was $1.15 a gallon (see 1990's Flashback or Statista). Which meant with a 20 gallon tank it took about 5.4 hours work to fill the tank. Eggs were about $1.16 a dozen and milk averaged about $2.96 a gallon. Average monthly rent listed in the 1990s shows around $465 a month per The People History (though we payed an average of $500-$600 in the area we lived in), which equated to about 118 working hours. In order to invest in a future, college education seemed essential. At the time, college costs per year for a public institution were just over $3,600 for a two year institution and in the ballpark of $5,700 to attend a 4 year institution. (I have rounded these numbers, see Fast Facts from the National Center for Education Statistics to view the chart, their information is obtained from US Department of Education). A struggle, to be sure.
Fast forward to today's world. Illinois state minimum wage is set at $8.25 per hour. Gas prices where I live today are at $2.89 a gallon (Illinoisgasprices.com), which would take about 7 working hours to fill my 20 gallon tank. Other basic prices have increased as well, such as eggs at $2.49 a dozen, milk at $4.32 a gallon and rent that averages around $1000 a month for a 1 bedroom apartment (now taking 121 working hours for basic housing). These figures were obtained from Numbeo cost of living with Chicago as the base model city. Actual costs in my town are slightly lower, though not much. Moreover, college costs have soared, now averaging $8,500 yearly for attending a two year public institution and $16,800yearly for four year public institution (numbers also obtained from Fast Facts from the National Center for Education). With these costs, getting ahead looks more and more like a distant dream after the realities of just trying to stay afloat.
But what about government aid and relief agencies? If you have watched the news recently, it abounds with stories about the rising cost of groceries (remember, I mentioned the cost of eggs and milk). Available government sponsored food programs are only meant to be a supplement to family food costs, far beneath what it takes to feed a person. (Snap benefits are just under $50 a week max benefit for a single family household, less if there are more individuals in your household, providing you qualify for the maximum benefit - See USDA website for additional information.) Food pantries and other relief agencies are shrinking. If you still have time to study after longer working hours now required to put gas in your car and provide you with a place to live, you might apply for education assistance, but keep in mind Federal Pell Grants available to help advance education will only cover about $5,775 annually maximum (providing you qualify and if you are eligible for the maximum amount) based on information retrieved from US Department of Education.You might be able to get a student load (if you qualify on your low income). From the standpoint of someone struggling on minimum wage, the outlook may seem very bleak.
Does that mean that I think that raising the national minimum wage from $7.25 an hour (state minimum wages vary - in Illinois the current rate is $8.25 an hour as listed on Illinois Department of Labor website) to $15 an hour is realistic? Not necessarily. However, it is a starting point for labor negotiations. After all, a car dealer sets an asking price for a vehicle with the expectation that there will be negotiation that may lead to a lower, but acceptable price point for both parties involved. Hopefully we can encourage our government to reach this middle ground based on economic realities for both the companies involved as well as the true labor force represented. Not the labor force created in the media. Not companies who rely on repressed wages to maintain profitability. Not the opinions of inflammatory articles with well placed ads. But with a real objective to better the standard of living while building and maintaining a sustainable economy.
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