On The Living Wage
By Justin Gardner | Related entries in Money, Social ProgramsThe following happens every single day to millions of Americans.
From the NY Times:
Workers in some of Baltimore’s homeless shelters and soup kitchens had noticed something new and troubling about many of the visitors coming in for meals and shelter: they happened to have full-time jobs.
So what do you do to make sure people have an easier go of it?
In response, local religious leaders successfully persuaded the City Council to raise the base pay for city contract workers to $6.10 an hour from $4.25, the federal minimum at the time. The Baltimore campaign was ostensibly about money. But to those who thought about it more deeply, it was about the force of particular moral propositions: first, that work should be rewarded, and second, that no one who works full time should have to live in poverty.
Yes, put in an honest day’s work and still not have enough to make ends meet. My family nearly faced this stark reality back when I was growing up. We were just one unexpected big bill away from seriously bad times. One of the family’s laundry and dry cleaning businesses burned down because of faulty electrical wiring and we didn’t have the right insurance. Needless to say, we not only lost the business, we also lost almost all of our savings. But thankfully we dodged the poverty bullets time and time again, even though it was mostly just dumb luck. And do know that my mom worked two jobs, and my grandmother worked an average of 70 hours a week trying to keep the other laundry business afloat. And yes, we still had trouble paying the bills. Paycheck to paycheck. This went on for years.
But some heartening news for the current living wage movement…
Santa Fe has been one of the movement’s crowning achievements. This month the city’s minimum wage rose to $9.50 an hour, the highest rate in the United States. But other recent victories include San Francisco in 2003 and Nevada in 2004. And if a ending bill in Chicago is any indication, the battles over wage laws will soon evolve into campaigns to force large, private-sector businesses like Wal-Mart to provide not only higher wages but also more money for employee health care.
So to all of those economists who think that having a minimum wage doesn’t make theoretical sense, I’d simply ask that you go into these communities where people aren’t even able to scrape by and share your theories with them. Seriously. That may sound glib, and well…it is. Theories don’t put food on the table. That’s just the long and short of it.
In any event, here’s to the living wage movement. I hope they continue to build on their successes. And just to be clear, I’d gladly pay a few bucks more for the widgets I buy if I knew that the people who were working in the Wal Marts of the world had enough money to support their families and have decent healthcare.
But that’s just me.
How about you?
This entry was posted on Monday, January 16th, 2006 and is filed under Money, Social Programs. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
January 16th, 2006 at 11:03 am
Justin, while I disagree with your position, I found your family story to be genuine and very interesting. I am curious, though, and please don’t take these questions to be rhetorical, because they are not:
Did your family laundry and dry-cleaning business employ anyone other than family? If so, how much, if any, above the minimum wage were they paid? If the family business had been forced to pay an employee more, what would the economic outcome have been for the business and the employee?
January 16th, 2006 at 2:19 pm
Dos,
I get where you’re coming from. It’ll drive a lot of small businesses out of business. But the economy would balance itself out. Services might increase a bit, but the balance would fall in others. The cost of a McDonalds hamburger might go up, as well as the cost of a new color TV. as Americans we own completely too much. The rest of the (non poor) nation might have to make quasi-tough decisions like not replacing their kids Playstations every two-three years when a new model comes out.
January 16th, 2006 at 3:37 pm
The problem with living wages is that it impacts the cost side of things without regard to the revenue side.
Yes, prices will have to go up. The question is how elastic is the demand of the good / service impacted? If the price increases high enough, it might go up way beyond what people are willing to pay for it.
As for “owning too much” — that’s a value judgement. But in terms of owning too much, it is this velocity of purchasing that keeps people employed. If people stop buying stuff, then there will be a lot of blood on the streets.
Can’t have it both ways.
January 16th, 2006 at 3:51 pm
First Dos, why do you disagree?
Second, most of my answers to your questions are moot since a natural disaster destroyed the better part of the business…but to indulge…1) yes…at least five or six at one time when things were going well, 2) at least a few dollars over (if not more) and 3) it doesn’t matter since everybody was always paid more than the minimum.
January 16th, 2006 at 6:54 pm
Justin,
To borrow from your argument: Would you explain to those small business owners why it’s okay that their businesses are going under? Would you tell the employees, freshly out of a job, that the “economy will balance itself out”? Would you be so glib as to tell them that they’ll just have to buy less Playstions for their kids?
It doesn’t seem to me like any one side of this argument relies more or less on theories than the other. So, the reader of your article is left to make a decision emotionally: theory vs. food. Okay, I pick food. And I definitely don’t want to go into an impoverished neighborhood and explain to anyone why they are poor. Not because I like my theories, but because I’m not a pompous ass. Or, if I am a pompous ass, I don’t want anyone to know about it.
But, emotion aside, your article is theory, too. The meat of the theory, however, doesn’t appear in the article. It appears in your first response to Dos, above.
This is how I would summarize your theory: Middle-class Americans’ thirst for doo-dads is forcing people to go hungry, because businesses are paying employees near-to-nothing in order to sell doo-dads for near-to-nothing. So, we have make employers pay people a higher wage. This will make doo-dads more expensive. But, that’s okay, at least we will all be able to eat.
If I have this theory wrong, let me know.
I don’t think people/economists who argue against higher minimum wages lack compassion for poor people who are going hungry. But, that’s what your article says. And I don’t think their primary concern is Playstations and McDonalds hamburgers on-the-cheap. They theorize that issues of poverty lie elsewhere. That’s what economists do. They theorize and they give advice.
You may be right. A higher minimum wage may be the thing that works. But, I’m sure you’ve considered what happens to jobs when businesses go under. People go moneyless in that scenario, too. So, my question is this: Do you think this is an issue of middle class vs. the poor? Or do you think this is an issue of big Wal-Mart-like business vs. the poor? Or, have I competely missed the mark on your argument?
By the way – I love your website. Kudos.
January 17th, 2006 at 12:32 am
Let me say this about the Baltimore shelter deal. I’m not poor, but I’m not above eating a free meal at the shelter. That’s right, DosPeros would darken the gate of every Mission in KC if it meant a free bowl of mash potatos and gravy or some ribs. I think it was the “free” part that attracted the wage-earners as much as the “food” part.
I wouldn’t be opposed to an increase in min. wage if it didn’t apply to companies with 15 or fewer employees. My only reason for asking you @ the family biz — surely the wages were not set at an arbitary number? Someone must have preceived value in paying the employees a couple bucks above min. wage — be it loyalty, quality of work, incentive, internal feeling of social justice, exc.. I wonder what value would have changed, if any (either with the employee or employer), had the wage become legally mandatory.
January 31st, 2007 at 7:21 pm
For most of my life, I have earned well above the minimum wage. Most of that time has been a rural area. As an observer, I can’t recall a minimum wage raise that provoked any business closing their doors. I do recall many small businesses going under when the big retailers moved to town. And it is happening now at a greater rate than ever before. And I remember in the mid to late 70s when double digit inflation led to the highest jobless rate in my lifetime, where many small businesses could not make up their greatly increased costs with higher prices because their customers were broke &/or jobless.
Up until October, I had worked about 2 1/2 years at the minimum. It was tough. I had food stamps, sometimes food banks, sometimes emergency utilities help. And if the voters in Florida had not passed a $1.00 increase in the minimum wage (about 2 years ago), I would have been one of the homeless workers instead of renting a bedroom.
So spare me the theories. My own experience says minimum wage increases are always overdue & still insufficient for all but the bare minimum to live. Businesses have had many years w/o an increase so they should be ready for a raise in pay for us now.
February 9th, 2007 at 9:16 pm
I MUST disagree with most of you about prices going up and small business closing, this is nothing more then a mere myth. I happen to live in Oregon and right next to Washington, two states that have the highest state minimum wages in the nation. Everyone said years ago when we passed our own minimum wage that prices would go up and small business would close. Granted our minimum wage is no where near a living wage at 7.80 (as of Jan 1, 2007) nor is Washington’s which I believe just went up to 7.93. However, our prices are no higher then the rest of the nation, whose working for 5.15. There may of been very few small businesses that closed their doors, however it was perhaps 1%. Small businesses are booming in the pacific northwest and most that have to close their doors isn’t because of paying higher wages.
We still pay about 2 bucks for a gallon of milk, a buck for a loaf of bread and can still buy a Cheapy Burger for a buck. In fact I remember being in Virginia a few years ago where the minimum wage was 5.15 and I found general groceries more expensive there. I could not find a loaf of bread anywhere for under a buck, here I pay 79 cents regular price.
These myths are doing nothing but hurting society as a whole, when a hard working family loses there home because Johnny got sick and had to go to ER and the family has to pay the medical bills to get Johnny well instead of paying rent there is something really wrong.
I cleaned houses for awhile about 4 years ago, both for someone else and on my own. I promise you that our clients paid pretty much the same thing the clients did in states where the help made 5.15 a hour and we were making 7.00+ a hour ( I made 8.50hr working for someone else, and Charged 18.00 a hour out on my own)
It is the BIG corps that do not want a living wage because of GREED!!!!!!! America is a greedy country, everyone is out for the buck. If you look at the majority of minimum wage workers, they are working for the larger corporations, look at Wal-Mart one of the wealthiest corps out there. The mom and pop shops know their workers can’t live on that and are already paying over minimum wage.
Anyone that uses the myth of; it will raise prices and close small business owners, is uninformed and needs to do research on states where it is already higher.