Yesterday President Obama gave a speech about the economy. One of the points he brought up was that income inequality is a bigger problem to our economy than the rapidly shrinking deficit. He is calling on Congress to raise the Federal Minimum Wage. Also, today, fast food workers in 100 cities are holding a one-day strike demanding a $15 minimum wage.
As in the past, Republicans are crying that raising the minimum wage would hurt small business and cost jobs. As in the past, this is a false argument. Jobs were not lost the last time the minimum wage was raised. And, many small business benefited because they already paid more than the minimum wage and did not have to subsidize their larger competitors.
There is always an argument about how much a non-skilled worker should be paid. Most conservatives think that $7.25 is too much to pay a non-skilled worker. But, what really is a non-skilled worker? I have heard arguments that if Home Depot had to pay someone $10.50 to help carry heavy purchases to the customer’s car they would simply eliminate the position. But would that really happen? Would a company like Home Depot really take the risk of losing customers simply they refuse to offer customer service? I don’t think so. Especially if their competition had to pay the same.
Mother Jones today has an article, with charts, showing why minimum wage doesn’t go as far as it used to. They also have an interesting chart showing that if minimum wage had increased as much as the personal income of the top 1% since 1968, the minimum wage would stand at over $25 per hour.
When speaking of people making minimum wage, we have a bad tendency of saying that the majority of people making the minimum wage are teenagers working part-time after school. Well guess what, the average age of someone working for minimum wage is 29!! The average age of women making the minimum wage is 32! 36% of fast food workers over 20 have children. Yet, the change in real value of the minimum wage since 1968 has decreased by 22% while the average personal income growth of the top 1% has risen 271%.
The article at Salon also has a calculator to help you see the plight of fast food workers where you live. To see what it would mean for me I went ahead and used it to see what would happen. I live in a small town in North Carolina. The calculator allows you to narrow down by ZIP Code where you live. It also allows you to pick your actually family size. So, I chose the ZIP Code I live in and put that we are two adults without children.
According to them, a typical household like mine in North Caroline would need to make $29,821 annually to make a secure yet modest living. A fast food worker in our area would need to make $14.29 per hour to reach that annual income. At current median wages, a fast food worker in North Carolina would have to work 64 hours per week.
The family poverty line for a family of 3 is 17,916 per year. In order to exceed that by less than a thousand dollars per year, a fast food worker would need to make $8.94 per hour and work 40 hours per week.
The weird side to all of this is that according to a recent Pew Survey, the Elite actually identify the current inequality between the rich and poor as a major flaw in the system. Yet, they are unwilling to do anything about it! One thing they are concerned about is that when people are too poor to buy goods and services the whole economy lags. Meaning their profits lag!
Let’s face some facts. Fast Food Companies make billions of dollars in profits! Large retail outlets like WalMart make billions of dollars in profits. Small business owners who pay more than the minimum wage to their workers are subsidizing companies like these. The short-fall of making ends meet is so bad, many of these large companies are actually showing their employees how to sign up for Government Subsidies like Food Stamps and holding food drives for their employees! Really? Their competition is footing the bill so they can keep their wages low!
Capitalism is not based on the theory of the rich getting richer. It is based on the simple rule of supply and demand. If demand falls, prices drop, profits drop, and small business go out of business! By paying the workforce a livable wage, these employees have more money to spend, demand goes up, and profits go up. Furthermore, fewer people will be living below the poverty line meaning more people will be paying more taxes meaning the revenue stream into the Government Coffers will increase! Since fewer people will be living below the poverty line, fewer people will require government subsidies just to live reducing dependency and costs to the government, thus helping reduce the deficit.
Yet, the Republicans are stuck on the premise that Capitalism is supposed to make the inequality between rich and poor greater! They continuously blame the poor for being “lazy”. They keep the nonsense about “wealth redistribution” alive with their talking points. Problem is that conservative voters fall for this nonsense hook-line-and-sinker! They don’t understand that they are part of the “lazy subsidy grubbers” the Republicans are talking about. Let’s face it, if the minimum wage has decreased 22% since 1968, the stagnation of the middle-class income has also decreased earnings since 1968. That means you are making less actual money than your fathers did!
I wrote once before that I believe the Republican Party is guilty of committing a drive-by-shooting of the American Dream. From all of the facts pointed out here, looks like they hit their target. Economic inequality is a cancer that affects all of us, not just those working at minimum wage! By depressing buying power, the economy cannot grow at a sustainable rate. That means more outsourcing, more factory closures, and more people being forced to depend on government subsidies just to survive! Mr. Boehner, is that your vision of the “American Dream”?