The minimum wage debacle

[Prometheus]

There's a lot going on in regards to the ongoing debate regarding increasing the federal minimum wage (currently $7.25/hour) to $15/hour, but most people  probably don't know half of it or simply don't bother to think about it because it might just fuck up their tenuous logic.

Let's try to unpack some of it and place it in perspective.

The news media and the champions of increasing the FMW will often tell you that "millions of people are making minimum wage!"

Duh! In a country of 331 million people, even something that only affects 1% of the population affects "millions" of people. "Millions of people" is way scarier and seems way more urgent than saying, "3% of the workforce (1.5% of the total population) is making the FMW or lower."

It's kind of hard to get upset about such a low percentage, isn't it? You might look at that lower number and wonder why we're expending so much time, effort and money to alleviate a problem that is affecting a relatively low number of people.

Before we get into the arguments, let's look at who the people are that are earning the FMW:

The vast majority of them are ages 16 to 24: young people getting their first work experience or picking up some extra cash to party with because mom and dad told them to get a job and pay for their own outrageously-priced sneakers/car/what-have-you.

They are twice as likely to be female than male. Some feminists might be quick to jump on this "inequity" but the fact of the matter is that males are simply more likely to be engaged in more physically demanding labor which has a high wage attached. I know that working in a fast food restaurant can be physically demanding, but I also know that it's not as physically demanding as being a basic laborer on a construction site.

Speaking of fast food in particular and food service in general, that's where you're going to find most of your minimum wage workers... basically high school and college  kids earning gas money.

Speaking of "college kids," most minimum wage workers are in high school or dropped out or have completed high school but aren't going to college. Only about 1.2% of minimum wage earners have a Bachelor's degree or higher (about 60,000 people throughout the country). So, if your parents didn't tell you, I will: Stay in school and study hard.

I suppose we should talk about race as well. There IS a disparity... but it's only about 0.4% Yup. Black people only make up 0.4% more of the minimum wage workforce than white people.

No. We're not ready for the arguments just yet. Hang tight. I want to acknowledge the caveats.

1. Yes, I am completely aware that my numbers are based solely on the FMW and do not reflect stats based on the number of people working for a minimum wage that just happens to be higher than the FMW. Why would I since the "raging debate" is not about state-mandated minimum wages but the Federal Minimum Wage.

2. Yes, I am completely aware that the overall statistics about sex, race, age, etc. may be skewed in different states: i.e. "red" states all seem to have more black people and women earning minimum wage than the national average. Of course, that means that there are states where fewer blacks and women are earning the minimum wage. That's why it's called an, "average."

3. Yes, I am completely aware that even if the FMW was increased to $15/hour it would still not constitute a "living wage," to which I respond, "Why does anyone who is still listed as a dependent on their parent's tax returns need a "living wage"?

4. Yes, I am completely aware, that based on #3, were there to be different minimum wages based on dependency that employers would be more likely to hire the lower-cost workers, but since most of the minimum wage workers are already "dependents" I'm not sure that it would make such a huge difference. In fact, adults who need a "living wage" might be more desirable in certain cases as they might be more dependable and responsible and will certainly have better work availability than a high school kid or college student.

Anyway... let's look at some downstream affects of raising the minimum wage.

1. Replacement of workers by automation. McDonald's has already spent over 1 billion dollars putting in automated ordering kiosks in their restaurants around the world and fired I don't know how many thousands or hundreds of thousands of workers. And let's not forget that gadget called a smart phone that you might even be using to read this post. Maybe you've already used it to order your next meal, thus eliminating even more jobs. Even if you add in the increased number of delivery drivers, I'm betting there's a net loss in jobs over-all.

2. Lower product quality. Not all minimum wage jobs can be off-shored, but margins can be maintained by making other cuts. Let's just look at fast food: reducing amounts of condiments on food items or on the side (one ketchup pack for a large fries? WTF?); reducing the size of portions (a "Filet-o-Fish" is waaaay smaller today than it was 20 years ago - the corners don't even poke out of the bun anymore); adding "filler" (you can say the Quarter Pounder is "all beef" but I'm guessing that I really don't want to know what part of the cow it came from); etc.

3. The need to increase other wages and salaries. Most human beings have a huge amount of their self-worth tied to their income, especially relative to those who make less. You increase the wages at the bottom and the people in the middle (and higher) will want their wages increased by the same amount. This isn't just going to be a "Shift Supervisor" who makes $9/hour compared to the other workers wanting $18/hour when the minimum wage goes to $15. It's going to be the "professionals" in the corporate offices as well. It's going to be all of the workers all along the supply chain including the warehouse workers, truck drivers, and even the construction guys who build new locations.

You can go looking for anecdotal evidence where this hasn't occurred or that it didn't affect prices, but I'll just point you to item #2 above and ask you when was the last time you actually measured how much liquid really fits into a "12 oz cup" even without the ice.

Speaking of which, how often do you look at packaged products to note the weight or number of the contents? I'm not positive (because I don't look either) but I'm willing to hazard a guess that a mid-sized bag of chips might not have decreased in physical size, but that the contents are have gone down by some amount over the years. We don't really notice because as long as the bag is the same size and still filled with air, who cares?

How many cookies or crackers are there in a single packaging sleeve today compared with previous years?

I'm sure we've all noticed that the size of a candy bar has decreased to the point where what we purchased as a kid (normal size) is now packaged as "Jumbo" to distract us from realizing that paying the Oompa Loompas more money resulted in us getting less chocolate for our money. N.B. I'm not advocating a return to slavery, just making a candy-related joke.


Do all people deserve a "living wage"?

No. As stated before, I don't think "dependents" should be getting a "living wage." They don't need it.

As for the rest, what they need is good health care and a better education* so that they can compete for the better jobs. Of course, "better jobs" is relative to how high prices go when all of the other wages and salaries have been doubled.

Enter BIG, which still wouldn't be a "living wage" but would alleviate some of the stress.

What really needs to happen is to eliminate corporations and their non-existent stocks which produce non-existent money. Then we might be able to get back to some semblance of laissez-faire capitalism where the wages will be based on doing a good job and prices will be way more affordable.

*I'm also pretty sure that should the minimum wage be increased to $15/hour that the teachers unions would be among the first to strike for higher wages.

/Monday Morning Rant