This week, in honor of Halloween, a scary story about life at the bottom end of the payscale. It comes via Seven Days at Minimum Wage, a project focused on bringing the experiences of full-time minimum wage workers to light. Below is day one:
I’ve been there. This is just to payful to watch. The poor just keep getting poorer.
payful=painful
too painful to watch
payful=painful
too painful to watch
– glad you corrected that. I almost thought you meant “playful.” But yes, painful’s a good word for it.
If good intentions paid a bill or two minimum wage hikes would be a good idea. As it is though, it doesn’t take a degree in economics to see that minimum wage increases hurt the poor and help no one other than politicians trying to make you think they give a rip.
The price you pay for goods goes up when the cost to bring those goods to you goes up. When you raise the wage of unskilled positions like janitors, fast food workers, stock boys, etc, you have just created what is known as inflation. Not so much monetary inflation which effects the value of the dollar, but rather the price of what you want to buy goes up and the dollar you have today doesn’t buy what it did yesterday.
So now when you go out to eat, you pay more. When you go to the grocery store, the food you buy costs more. When you buy gas, it will cost more. Movies? More. Clothes? More. You have done nothing for the poor because the tiny amount that you’ve increased their wages is consumed by the increase in cost for all the products that they NEED. Oh, I almost forgot rent! The guys that mow the lawn at your apartment complex? Yeah, they just got a raise too, guess who pays for that.
Oh, but that’s not all we’ve done.
Everyone who makes 9 bucks an hour… 10 bucks an hour… 11 bucks an hour… 12 bucks an hour… will have a decreased standard of living. See, they didn’t get the pay raise the minimum wagers did, but they still have to pay more for all their goods that THEY need. So now all those people who may have been merely struggling before? Struggling even worse now.
Let’s not forget about the decrease in jobs and the anchor this puts on the economy as well. With businesses being forced to dole out more cash for purely unskilled labor, they will see less of a need to have so much unskilled labor. Less workers at your local coffeeshop, less janitors being hired. Less taco bell employees. Now instead of having six people on the line making your burrito, they’ll have five. Same cost to them, less workers being paid by the economy. Less seasonal work in department stores, less work for college students needing part time employment. Less work period. And some of those companies and factories will realize… hey, time to go overseas! There’s a reason tech support is outsourced to India, it’s not because Americans love talking to people in India either!
The long-term gain of wealth by an individual or a nation is better represented by productivity, time, energy, products and services than the fixed money dollar amounts you label those things with. Giving the poor more money by raising the minimum wage doesn’t fix that, it’s an artificial solution. It merely debases the markets, because nothing really changes about national productivity, besides the fact that jobs get harder because there are fewer working hands. The moment low-value labor is given a higher price tag per hour, it fundamentally re-prices the value of all labor, as the low-value labor is currently such a prevalent and integral part of our system that becomes the base comparison for the rest of labor. The only people who are hurt are those of us who are trying to escape minimum wage, as we are slowly dragged back down to it each time minimum wage passes. After all, WE don’t get a raise. Don’t think for a moment that rich people (like the politicians who think of these bills) are affected, it’s the middle class who are hurt the most. The middle class and the poor become more equally poor, while the rich exercise their wider array of options to mostly negate the negative effects. Likewise, since people are less productive due to the chaos this causes, the GDP is stifled, our economy is flustered, and the actual real borders of poverty become wider.
Which is used as an excuse to raise the minimum wage again! Argh!
The have’s will not feel an effect from a raising of the minimum wage. They’ll just fire one or two unskilled employees, make the rest work harder and laugh while the poor and middle class bear the economic brunt of the raising of the minimum wage. It just costs a coupla extra bucks to fill up that SUV. Those of us scraping by, paycheck to paycheck, get creamed.
Raising the minimum wage hurts the poor. And I have every Nobel prize winning economist on my side when I say that.
Scott,
Thanks for stopping by. It’s clear you’ve given some thought to your comment, which is why I appreciate it so much. But there are a couple things to which I’d like to respond:
I’m not being snarky; it’s just that some of the realities seem to fly in the face of our assertions. On a somewhat related note, if you’re privy to any wide-based studies that refute my earlier contentions concerning unemployment and business viability, perhaps you could direct me to them.
Great response!
I had read that article too, and spent the whole time scratching my head wondering where people get all the negative ideas they have on minimum wage laws. Most of the con arguments are based in pseudo-practical, overly simplistic thinking that people who are inexperienced in economic management and theory will buy into easily.
I’ve always understood that to get the most out of your people you need to pay them as well as you can. In business school, I remember being told that wages were best designed as a direct function of profit. There are some low wage jobs for which this holds true, but so many other larger corporations screw it up.
I used to believe business practices would naturally coincide with the interests of the people (free market zombie in my early days), but now I’m certain that many businesses do need to be nudged into responsible practices from time to time.
As a former executive and current small business owner myself, I can assure you it’s necessary far more than capitalistic idealists want to think. I can also assure you I run my own retail business as generously toward my employees as possible and the profits haven’t died off as a result. Do I turn a billion dollar profit? No. Do I do alright? Absolutely.
In my opinion businesses who rail hardest again wage increase laws are the ones least capable of running responsibly.
Count me in as a formerly conservative/currently liberal employer who favors making other businesses behave as responsibly as I’ve already done on my own.
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