Why We Should Care – A Lot – About the “Minimum Wage”


Look at the Math and The History, Not the Politics and Doctrine

For as long as I can remember, we have had national and local battles about the minimum wage. What should it be? Should it be at all? What is the point? What are the pros and cons?

What is the History?

I have my own biases. Coming from a working-class family, I saw the issues up close. I have followed the issue ever since those early days. That we are still no further along in settling this as national policy is remarkable. That the current federal minimum wage is still $7.25 an hour is little short of criminal.

I put Minimum Wage in parenthesis in the title. I did so to highlight the subjective nature of the very title Minimum Wage. Minimum for what? Says who? Advocates for improvements have gone to referring to a Living Wage. That is a much better title, and a definition that can be more accurately nailed down.

Since time immemorial, every time increasing the minimum wage has been discussed, a predictable sequence follows. The national Chamber of Commerce, business groups, and Republicans rise up in a fit of despair. This will kill small business and lose millions of jobs, they lament. It does not happen. No doubt there are examples of such occurrences, but on a statistical level it has never happened.

What has happened was a boost to the economy. Workers almost always put their new increases right back into the economy. Think that happened with the huge tax cut we just gave the wealthy? Nope.

Raising the minimum wage can be a life-saver for a business that would like to pay its lowest paid workers a bit more. And businesses often do wish to do so, for moral reasons and for retention reasons.

But this is a hard call for an individual business to make. Doing it alone means they risk being noncompetitive in pricing or they absorb the cost. A government set standard means a business is not taking an individual risk. All businesses have that same cost to contend with, a much fairer situation.

How Should We Proceed?

I don’t know what the right level for a national living wage would be. A lot of people seem to rally around $15 an hour. I suspect that is still not enough in, say, San Francisco, but likely is well above a fair minimum in, say Mobile. But I know it’s not $7.25, not anywhere. You try living on that anywhere in the country. A good case could be made for setting a specified level. Then, move it automatically up or down based on an appropriate cost of living index by region.

Allowing politicians to decide rates on a vote whenever they decide to get around to it is wrong. Let’s define a living wage, set the numbers that support that definition, then peg it to the economy every year. Cost of living increases would be automatic and predictable. I would even support a one-year lag to foster predictability for businesses.

Remind Me, Why Are We Doing This?

We do this because it is morally wrong in the 21st century not to have a living wage in an advanced country. I know, some days it seems we do not earn that “advanced country” moniker but bear with me.

We do this, because it is good for the economy on several levels.

We do this because so basic an economic and social foundation should not be so subject to political whims.

We have an election year coming. It sure would like to see candidates come out hard and loud for these changes. Let us do the right thing and the effective thing. This is a win-win waiting to happen.

    Bill Clontz

If you find this blog worthy of your time and curiosity, I invite you to do two things:

(1) Join the conversation. Your voice counts here.

(2) Share the word about this post with friends and colleagues. Share a link in your emails and social media posts (https://agentsofreason.com). Let’s grow our circle.


1 reply to Why We Should Care – A Lot – About the “Minimum Wage”

  1. Bill, this is a very complex subject. If you apply inflation to the $7.25 set in 2009, the current minimum would be $8.47/hour. OK for a teenager living at home, but not for someone on their own renting a one bedroom apartment Local “Fair Living” wage calculations are based on medium apartment rates divided by .30, meaning housing costs should be 30% of gross income.

    Asheville has low wages (low GDP) but unusually high rental rates. We both belong to a non-profit recognizing seven metro wage categories (GEO Codes) as wage guidelines. Asheville is GEO 1, the lowest wage segment. So the “Living Wage” calculation starts getting really complicated. There are other factors as well.

    I have been thinking about this problem for a long time and have yet to land on a plan workable on a national basis.


Your Turn to Comment