The Employment Policies Institute wants the world to know raising the minimum wage is more fraught with harmful consequences than using a beehive for a volleyball.
EPI’s news release of sky-is-sure-to-fall warnings mentions a number of academic studies without offering specific citations to any of them. But our favorite supposed factoid exhibits just the logic leap we expect from a right-wing, pro-corporate propaganda shop:
Raising the minimum wage does not help families in poverty: The minimum wage is a blunt instrument that is unable to differentiate between a low-wage employee (who may be from a wealthy family) and a low-income family head. As a result, only a fraction of benefits from a minimum wage increase go to families in poverty.
So, EPI goes from stating not all minimum-wage workers were mired in poverty prior to landing their low-wage job, which seems likely enough to be true, to “only a fraction” of minimum-wage increases help poor families,” which makes no sense at all.
Does the author of this nonsense expect us to believe the bulk of minimum-wage workers are independently wealthy and just doing whatever they’re doing for the sheer joy of holding down a job, no matter how little it pays?
Does the writer expect us to believe the supposedly very few minimum-wage workers who head an impoverished household selfishly spend all their earnings on themselves, leaving nothing for dependents?
It’s truly amazing, what these economic Darwinists believe — if indeed the writer believes what he or she wrote — and what they expect the rest of us to mindlessly accept.
I think your criticism is a little off the mark. The press release was highlighting some economic research, and other findings were that few families in poverty work for the minimum wage, and those that do quickly get raises out of that category. The writer was making the point that not all low wage workers are in poverty, so all the increase in a minimum wage does not all go to people in poverty. The first line could have read “Raising the minumum wage does not help ‘all’ families in poverty…” and it might have been easier to take standing alone.
The main thrust of the release was that raising the minimum wage decreased the number of jobs offered. It reminds me of the question, “if someone is only capable of producing $4 an hour in economic activity, how can you justify paying him $5 and hour?”
Frankly, I can’t think of any job so lowly and so worthless that it’s worth only $5 an hour.
How odd that the EPI would be using the remarkably socialist argument that the minimum wage should not be raised because some people do not deserve it rather than arguing that the product of their labor is worth so little. To each according to his need…?
The second time I got a decent raise it was
because the minimum wage went up. I was
making more than that but the company raised
the next 2 or 3 steps up too. I dont know
if I was a real poverty case but I know I
really needed the increase.
RSF, in many settings it’s difficult, if not impossible, to isolate the work of one person or class of workers to arrive at a judgment of just what the yield of their labor is.
In a supermarket, you might have a couple of rookie shelf stockers on minimum wage. If those stockers don’t do their jobs well, the efforts of your crack team of checkers, expert produce manager and highly proficient meatcutters won’t mean much to customers. If customers keep running into empty spaces where items they were looking for should be, and see places where stock is dirty and sloppily arranged, you’re sunk.
Because the stockers’ task is one that can be readily learned and done by anyone in reasonably good physical shape, you can say it’s worth only minimum wage, maybe less. But if you get hold of several who are slackers or utterly inept, watch the impact on your bottom line.
The other thing to keep in mind about the minimum wage is that there is a rebound benefit, to the employer and the whole community, when there’s a realistically set floor under wages. Those better-paid people will be able to pay for necessities on their own and, we hope, be able to do some discretionary spending, which means more sales and profits for businesses, more revenue for government, etc.
More than many wish to acknowledge, we are all in this together.
Blutus, probably one reason some employers dread minimum-wage increases is because they can force raises for workers who are making above minimum as well.
Of course, when you’ve got a situation like the one involving greed-crazed Tyco ex-CEO Dennis Kozlowski, of $1,500 shower curtain infamy, it’s hard to feel their pain if they have to pay more to those at the bottom.
The same goes for the idiot CEO of American Airlines (I think it was AA) a dozen or so years ago. He’s the one who, after gouging unions for big concessions, pleading desperate need to keep the company solvent, turned right around and authorized fat bonuses for himself and his top executives.
SW, you made very good comments, especially about idiot CEO’s. Even a capitalist running dog like myself can’t stomach some of their behavior.
One thing to consider, using the stock boy example, is a store has a set budget for hiring stock boys. If they have to pay higher wages, they may hire 9 instead of 10. If the shelves subsequently don’t get stocked properly, the store may increase the budget for stock boy wages and rehire #10, or they may increase the budget for machinery and buy more pallet trucks. Either way they might have to increase the price of their food to compensate, and this may cancel the benefit of the higher wages.
RSF, one consideration that seems to be missing from your response is business volume.
Another important consideration, since we’re on this, touches on my CEO comments, but is even broader, more entrenched and inevitable in reality. I’ll call it a failure to share the wealth, for lack of a better term.
In many businesses there are positions that obviously and directly contribute to increased sales and, presumably, increased profits. Sales and marketing are prime examples, with all the denizens of the executive suite closely linked.
These are the very same folks who decide how the business’ incentive and rewards pie gets sliced and served, of course.
Given this reality, it’s a function of human nature and organizational inevitability that incentives and rewards will flow with disporportionate generosity toward the sales/marketing and executive members of the team.
People in other areas of the business, whose contributions in some cases are every bit as crucial to its success, are at the same time very likely to see few or no incentives and skimpy pay increases doled out at a glacial pace.
The owner, manager, president or CEO says all the right things from time to time about every member of the team being vital to the business’ success. But the reality is revealed in how the pie is cut and the slices handed out.
This formula for inequity is organic and, as stated, inevitable. It transcends simple greed, even in organizations where you have an exceptional leader who sincerely means to do better in this regard. I know of no surefire, ideal remedy for it, either.
I do believe the application of external force, in the form of union contract negotiations or a government-mandated minimum wage increase, from time to time, can be helpful to those most in need of, and least likely to get, a leg up. But with this caveat: Like anything, union demands and minimum wage increases can be overdone and/or badly done.
As my mother liked to say, “All things (should be) in moderation.”
What you touch on I call the “lottery mentality”, and it has been with us through history. Pick the right numbers? Get wealthy from other people. Become a CEO? Get wealthy from other people. Be born a German or Japanese elite circa 1930? Get wealthy from other people.
RSF, maybe we’re approaching some kind of accord here.
I’ve never had a problem with people becoming wealthy or adding to their wealth through their hard work, ingenuity, exceptional skills/talents, etc. I credit their efforts at times with helping to enlarge the whole economic pie, to everyone’s ultimate benefit.
Where I have a problem  a big problem  is when people with wealth and power use those to enlarge their share of the pie at the expense of others, making others poorer or keeping others from improving their situation.
I know of nothing in our Constitution, system of laws and democratic traditions that makes that OK. Nor is it anything but greed and covetousness in Christian teachings, as I understand them.