Friday, January 05, 2007

In Defense of the Federal Minimum Wage

In an Op-ed article in the Washington Post of Thursday, George Will stated that rather than increasing the Federal Minimum wage, it should be abolished. His argument is porous at best and ridiculous at worst.

Firstly, he uses numbers to back his case. One numbers argument he poses is that of the 0.6% of Americans currently earning the minimum wage, a minority (20%) are in families with earnings below the poverty line. But fewer than 20% of Americans are not currently below the poverty line. Clearly, a disproportionate number of minimum wage earners are living below the poverty line. He also points out that 29 individual states have already raised their own minimum wage. An increase in the minimum wage is good enough for those 29 states but not for the other 21? Granted, as Will points out, different states have different costs of living, but by raising the floor nationally, the higher cost states will have more leeway to implement further increases down the road. And the lower cost states will continue to see worker benefits as a result of a stronger purchasing power.

Another argument posed by Will which indirectly refutes his overall argument relates to the elasticity of demand: as price goes up (in this case the price of labor) the demand goes down. He acknowledges that the smallest of increases will have negligible effect on labor numbers. But what he ignores are the few items which have inelastic demand. These are the things which, no matter the price fluctuations, demand will always be relatively unchanged. These are the things which are necessities which working families - no matter their relation to the poverty line - must have and the cost of which have risen dramatically since the Minimum Wage was last increased in 1997. Housing. Fuel. Insurance costs. In 1997, the average gas price was $1.10. Today, it is $2.29. That is an increase of 108%. Everyone is fully aware of the astronomical increase in the price of a home in the years after 9/11. Anyone living in Hurricane Alley knows the impact Global Warming - another supposed myth propagated by liberals - has had on home insurance prices. And health insurance prices haven't fared much better. At the very least, the Minimum Wage should track the costs of inelastic goods. Allowing the free market to dictate the minimum wage would only allow companies to see how many jobs they can force single parent wage earners into taking on.

Count my family among the 60% that Mr. Will points out as having a part time minimum wage earner with an over-all house hold income above $40,000. My wife and I are a young couple, recent home owners and part of the struggling middle class that, for 6 years now, has, at best, been ignored or, at worst, beaten down by President Bush's corporate- and wealthy-friendly fiscal policies. My income is sufficient to cover our fixed - or inelastic - costs while saving a little for our future. What my wife earns at her part-time job, which pays the Florida Minimum of $6.40 per hour, while attending college is our disposable income. An increase of $1 per hour would represent an additional $30 a week we can spend on books, movies or a dinner out. For a middle class family like mine, that level of increase is the real, physical equivalent of Bush's fanciful economy stimulation as a result of his beloved tax cuts to the wealthy. I have known wealthy people and my experience has been that, if you give wealthy people more wealth, that's simply more money they can save. However, if you give people who will likely never be independently wealthy just a modest increase in income, that's more money they can use to stimulate the economy through greater spending power - spending power that they actually exercise.

I suppose, though, in Mr. Will's arguments, we're living in the lap of luxury because my wife is actually earning more than the federal minimum wage. He makes it sound as though having some extra cash in your pocket is wasted on the likes of a student or a teen. He makes it sound as though that pocket money were better suited in the lofty accounts of the Waltons or the other owners and investors of the major corporations that see to it their hourly employees' earnings remain at or around the Federal Minimum. If only he could recognize the actual impact that cash can have for one of those middle class families.


Blogger Blur said...

Fuck George Will! Isn't he a Yankees fan? What the fuck does he know? American League asshole.

7:46 AM  

Post a Comment

<< Home