11 August 2006

On the minimum wage (3)

But what about the poor?

All of that (i.e., the previous two posts, here and here) being said, I would be remiss if I left unanswered what I believe is an important objection to what I’ve written. The objection I have in mind is formulated inone of two ways: (1) that the present minimum wage is not enough to support a single parent with two children; and (2) that it leaves millions living in poverty.

1

Let me grant that the present minimum wage is not enough to support a single parent with two children. What immediately follows from this proposition? The quick and dirty answer, quite frankly, is that nothing follows from this proposition in the way of a requirement that an employer pay a certain wage.

Assuming that “support” means something like “live above the poverty line,” the most immediate inference is that a single parent making minimum wage and her two children will live in poverty (i.e., “the threshold below which families or individuals are considered to be lacking the resources to meet the basic needs for healthy living; having insufficient income to provide the food, shelter and clothing needed to preserve health.”) After all, this woman is making only $10,712.00 per year. Maybe that was something in 1997 when the minimum wage was raised to $5.15, but in today’s dollars, due to inflation, that would be in the neighborhood of $12.900.00. Clearly, someone who is making $10,712.00 today is not making what $10,712.00 was worth in 1997. I freely admit that.

But again, the proposition that the present minimum wage is not enough to support a single parent with two children does not simply imply that employer’s should pay more. If “Employers should pay more” is the conclusion of an argument in which “The present minimum wage is not enough to support a single parent with two children” is a premise, then there is at least one premise missing. What is it? We are not told. We are simply told that that the present minimum wage is not enough to support a single parent with two children and, therefore, employers should pay more. What we have here, until the missing premise(s) is (or are) provided, is an enthymeme at best. At worst, assuming that there really are no other premises, we have a non sequitur.

Something else this argument overlooks is this: the fact that you need more money doesn’t mean that your employer has more money. Of course, some people think that because a business has made a profit it can just afford pay raises, especially since, on a Marxist view (which seems increasingly to be the popular view of such things) a profit is prima facie evidence of exploitation. And we know who was exploited, don’t we? Yes, the employees, to whom, truth be known, that profit truly belongs. (And don’t start in about ExxonMobile and other big corporations. The vast majority of Americans are not employed by monster corporations; they are employed by small businesses.)

Let’s analyze this a bit. Assume that you hold to the reasoning that if you need to make more than $5.15 per hour your employer is obligated to pay you more than $5.15 per hour. You need it; he’s obligated to pay it. Now, let’s say that you need a car, specifically a brand new car (you just can’t afford, on $7.25 per hour, the up-keep on an older used model). You go down to the car lot and find the car you want. The sticker price on the car is $40,000.00. You tell the salesman that you will give him $450.00 for it. When he balks at this, you tell him that he’s obligated to give you the car at that price simply because you need the car.

Isn’t it the case that, if your employer is obligated to pay you a certain wage simply because you need it, then an auto dealer is obligated to sell you the car of your choice at a price you specify simply because you need it at that price? And shouldn’t this be true at your favorite clothing store (which, under these terms might as well be Sach’s)? And the grocery store? What about that private school you (poor single parent of two) have always wanted to send your children to? Isn’t that school obligated to take your children at whatever price you can afford, simply because you need it? If an employer is obligated to give you something for no other reason than that you need it, then so should everyone else. Isn’t that right?

But that isn’t all. If an employer is obligated to give you something (in this case a wage specified by Congress) simply because you need it, this implies that someone, somewhere is obligated to go into business in the first place. After all, there won’t be any people making the wages that Congress determines they need to be making if there are not those going into business in the first place. What are you waiting for? Get out there and start a business. It’s your duty. Hurry, you selfish pig. People are living in poverty because you won’t start a business and employ them.

(Hint: This is why we center-rightists are inclined to see center-leftists as little more than thinly disguised Marxists. All we are talking about here is a different formulation of the Marxist maxim, “From each according to ability, to each according to need.”)

2

One question raised by the claim that the minimum wage leaves millions in poverty is: Who is making minimum wage? (It is, after all, supposed to be a wage for the young, single and unskilled.)

In 2005 (the last year for which I have good figures), 75.6 million American workers were paid at hourly rates. Of those 75.6 million, 479,000 were reported as earning minimum wage. 1.4 million were reported as earning below minimum wages. Together, these 1,879,000 make up 2.5 percent of all hourly-paid workers (i.e., 75.6 million), or 0.60 percent of the U.S. population. Minimum wage affects less than 1 percent of the population. My source for these figures is a Bureau of Labor Statistics document, styled “Characteristics of Minimum Wage Workers: 2005”. Tables 1 – 10 of that same document yield some valuable information about who makes minimum wage in this country.

a. Of those 1,879,000 workers earning $5.15 or less, 939,500.00 were under age 25.

b. 469,750.00 of workers earning $5.15 or less were age 16-19.

c. Among employed teenagers (i.e., 469,750.00) about 9 percent (or 42,278.00) earned $5.15 or less.

d. About 2 percent of workers age 25 and over earned the minimum wage or less. This one requires some work. There were 75.6 million hourly wage workers of which 1,879,000.00 were under 25, leaving 73,721,000.00 hourly workers over age 25. This means that 1,474,420.00 workers over the age of 25 (i.e., 2 percent of 75.6 million) earned minimum wage or less in 2005.

e. Among those age 65 and over, the proportion of those earning minimum wage or less was about 3 percent. Those 65 and over account for 2,261,000.00 of the 75.6 million hourly employees. Of that 2,261,000.00. 67,830.00 are making minimum wage or less.

Now as I said, that is valuable information. But why is it significant?

On 9 June 2006 I critiqued this essay by Sebastian Malleby, an essay which contained this passage:

“People often remark on the perversity of popular support for estate-tax repeal. A majority wants to abolish the tax, even though only the richest 2 percent of households have ever had to pay it” (emphasis added).

Previously, that same day, I critiqued an essay by Molly Ivins which contained this passage:

“The estate tax applies to around 1 percent of Americans…. It affects only very, very, very rich people, of whom you are probably not one. And they don't, actually, need another tax break.”

The reasoning exhibited here is the same; and it is telling. The estate tax doesn’t need to be repealed because it affects only 1 (or is it 2?) percent of the American population. But somehow, despite the fact that the minimum wage affects only around 2 percent of the American population something needs to be done about it.

In a just society, there should not be a different standard for rich and for poor. If 2 percent is nothing to be concerned about, then it’s nothing to be concerned about—whether that 2 percent is rich or poor.

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James Frank SolĂ­s
Former soldier (USA). Graduate-level educated. Married 26 years. Texas ex-patriate. Ruling elder in the Presbyterian Church in America.
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