Minimum Wage Myths
Let’s talk about minimum wage.
Currently, the federal minimum wage is set at $7.25 an hour. This varies by state, with some states’ minimum wage set over $10 an hour. (Tipped wage earners are paid $2.13 an hour.) The federal minimum wage hasn’t been raised in eleven years, while production rates have risen every year. Opponents to raising the minimum wage often state several arguments that just don’t hold up under scrutiny. Let’s take a look at some of them
“The minimum wage was never meant to support people.” Also stated as “The minimum wage was intended for teens and entry level jobs.”
The minimum wage, when first implemented, was intended to provide workers with the ability to live above a subsistence level. It was intended to allow someone working a 40 hour work week to be able to afford a decent place to live, food, and clothing. Today, nobody earning minimum wage can afford to rent an apartment in any state. That’s a far cry from the original intent of minimum wage.
Let’s assume for a moment that minimum wage was never intended to be a living wage. Let’s assume that it was only intended as a “starting wage” for teens and entry level jobs. Society has changed since 1938. Young adults can no longer pay for their college education working a minimum wage job during the summer. More and more adults are taking minimum wage jobs either to support themselves after retirement, or because they lost their job due to offshoring and they need something to pay the bills.
It’s time to change minimum wage to bring it up to the 21st century. The people working minimum wage jobs are different and have different needs than teens and entry level jobs. It’s similar to saying the 2nd Amendment covers all guns and not just the muzzle loaders that were prevalent when it was written.
Not all jobs should be paid a living wage.
To me, this is saying that people making minimum wage shouldn’t live. If someone is working forty hours a week, they should be able to support themselves with their paycheck. That is why they are working. Few people work at fast food places for fun. Dealing with customers is never fun.
Where would the CEOs of any business be without the workers? How would you get your lunch if there was nobody to cook it, bag it, and hand it to you at the drive thru? Without anyone to unload trucks and stock shelves, how would you make your purchases at stores? Minimum wage employees make all of this possible. They are the ones making the products and serving people that corporations make their billions of dollars from. Without workers, these corporations and businesses wouldn’t exist.
To me, paying those employees a living wage seems like the least those businesses should do.
Prices will go up if minimum wage is increased.
Yes, prices will go up, but here’s a dirty little secret: prices have been going up year after year even with minimum wage remaining constant.
Shocking, I know.
There are a lot of reasons why prices go up, and labor costs are part of it, but this excuse is never mentioned when CEOs are given huge raises and bonuses, nor is it used when employees get their annual raises. It only comes up when talk of raising the minimum wage comes up.
Studies have shown that prices will rise if the minimum wage is increased, but only by a few cents. What happens when the minimum wage is increased is those making that wage have more money, so they spend it, increasing sales at businesses and providing an influx of cash, offsetting the increase in wages. There’s also the matter of what the market will bear. People won’t pay $10 for a Big Mac, no matter how good it might be, so the price won’t be raised that high.
The government shouldn’t tell businesses what to pay their employees
This is one of the roles of the government: to safeguard the welfare of the little guy.
What stops corporations from dumping toxic waste in our lakes and back yards? What stops corporations from locking all exits while their employees are working? Why can’t kids under 10 work in factories and mines?
The government stepped in and made laws regulating corporations to keep them from exploiting their employees. Telling corporations they must pay their employees a minimum wage is just one more example of this.
If they raise the minimum wage, I’ll be making minimum wage.
I’ve also heard people say “If they raise the minimum wage then burger flippers will make more than EMTs.”
Raising the minimum wage to a living wage means we all get a raise. Companies don’t really want endless turnover of their employees, even if they figure it into their costs. If someone can work elsewhere under better conditions, they will leave. Raising pay over the minimum wage helps retention. That’s what happened when Ford started paying his employees a better wage. He got more people who wanted to work for him and the other employers raised their wages so they could get enough employees to build their products.
The Market should determine how much someone gets paid
In a world full of competition for employees, this should work. Look at the example I just cited with Ford. He needed employees and figured if he gave them enough money to buy one of his cars, he would come out on top, and he was right. Other manufacturers in the area followed suit and wages increased.
What happens when all the competitors decide to work together to maximize profits and minimize wages? It soon becomes apparent that it doesn’t make any difference where someone goes to work. Their “competitive” wage is the same wage the other company is paying so it doesn’t matter where they work. The owners and CEOs of the companies won’t offer decent salaries for their employees because they know “the Market” is broken and better wages don’t exist. Wages stagnate under these conditions.
People will be replaced with machines
The threat of being replaced with machines has hung over the heads of employees everywhere. They’re told any demand for higher wages will result in being replaced by a machine. Look at the kiosks being installed in McDonald’s all over the country.
The problem is, employees are being replaced by machines even without being paid higher wages. It happened in factories all across the country decades ago. It’s happening now. There are jobs that machines are better and more proficient at.
Here’s the catch: you still need people to run them. You need someone to make sure they are running right. You need someone to un-jam them when they get stuck, or a part gets turned sideways. You need someone to make the burger and ensure special orders are made right, and you need someone to give the customer their purchase. You still need someone to provide customer service. You still need people to fix the machine when it breaks down.
Even in a fully mechanized workplace, you still need human employees.
Those employees need shelter, food, and clothing at a minimum. Their wages are used to provide the ability to buy those things. Decent wages make for better employees.
The biggest employers in the US include Walmart, McDonalds, Amazon, and YUM Brands (KFC, Taco Bell, and several other fast food places.) These companies employ millions of Americans, and are well known for paying minimum wage while making billions in profits. Walmart is known for instructing new employees how to fill out applications for food stamps. This means you are paying those employees through your taxes rather than their employer. Think about that for a minute.
Paying someone less than a living wage for 40 hours of work has other consequences, too. If an employee is working 60–80 hours a week, they aren’t getting enough rest. This results in lower productivity and an increase in errors resulting in increased rework time, which hurts the bottom line. Low wages also contribute to higher turnover which means companies are paying more for constant training, lower productivity as the new employee learns their job, and increased errors. The stress of trying to live on low wages leads to poor health and decreased productivity.
Increasing the minimum wage is an investment in the labor force and the economy. If people don’t have to worry about being able to provide the basics of living they will be more productive and more reliable at work. They will inject their excess wages back into the economy. They will do a lot more to strengthen and boost the economy than giving raises to the CEOs or the stock market will ever do.