Should the minimum wage be raised to $15/hr?

The net is abuzz with talk over the US minimum wage again–this time, the discussion is whether or not the federal minimum wage should be set to $15/hr.  The “Fight for 15” movement as it’s coming to be known is an effort by the SEIU to organize fast-food workers to win higher wages for themselves [1].

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While the campaign is new, the objections are ancient:

  1. Minimum wage wouldn’t benefit workers because it screws up the economy; by implementing a price floor in the labor market, you reduce the demand for labor [2].
  2. These workers are getting paid what their job is worth.  Minimum wage jobs lead to better ones.  Mandating that they be paid more is unfair (or impossible), they should develop their skills and experience like the rest of us if they want better wages [3].
  3. Workers in the US are still better off than those in most of the world, they should be happy with what they have, it’s not that bad [4].
  4. Minimum wage increases are just an attempt by liberals trying to wage class warfare and redistribute wealth [5]
  5. Minimum wage increases wouldn’t really benefit workers because only a small number of people make minimum wage and most of them are teenagers anyway [6].
  6. Minimum wage laws are actually a conspiracy by racists to oppress black people (no, seriously).

I will address each of these arguments in turn.  Let’s start with the fun one, the evil conspiracy of racists:

Are minimum wage laws a racist institution that is secretly geared toward oppressing blacks?

The argument that minimum wage laws are a secret conspiracy by racist eugenicists seems to have originated from a much less insane (but still pretty insane) from the chair of the economics department at my alma mater, Professor Walter E. Williams.  In “The State Against Blacks”, he argues that the minimum wage rather enables racism to thrive because it doesn’t allow blacks to work for lower wages.  Given the choice between a black and white worker, a racist will naturally choose the white worker because he has to pay them both the same wage (W.E. Williams 1983).  Later, FEE, the Heritage Foundation, and the rest of the proprietarian social darwinists (PSDs) latched onto this study to proclaim that minimum wage was (and therefore still is) a racist law.

Of course, most people in favor of minimum wage laws were progressives, not racist eugenicists.  Much like a tiny minority of basic income supporters being free market fundamentalists trying to correct market imperfections doesn’t make basic income an inherently free market institution, a tiny base of support from eugenicists of minimum wage doesn’t mean that minimum wage itself is a racist institution.  As Williams correctly points out, it is the employer that’s racist, not the institution, at least in this case.  As in, minimum wage laws being an oppressive towards nonwhite and foreign people depends on employers being nationalist racists–an assumption that’s probably actually pretty accurate–but it’s the nationalism and racism that’s the problem, not minimum wage.

And let’s take a step back: What the PSDs want us to take away from this is that progressivism, and other forms of restraint on capitalism, is actually destructive and evil, and that the best way to help blacks and other disenfranchised groups is to let the free market take care of the problem.  Let’s not forget that the free market was responsible for putting millions of blacks into slavery and continuing their subjugation after the end of slavery via the “individual freedoms” of proprietors to deny them credit, employment, education, and fair treatment in other institutions.  We know by now that hard work at poverty wages is not how those with good work ethic develop skills and experience to become wealthy capitalists.  On the contrary, huge numbers of people working at poverty wages is how those willing to exploit the desperation of others become wealthy capitalists.

Do minimum wage laws actually only affect a tiny minority?

A favorite tactic of minimum wage opponents is one shared by reactionaries in general, which is to make the benefits of minimum wage seem insignificant using percentages.  In one of the sources above, we can see this:

According to the Bureau of Labor Statistics there are about 3.6 million workers at or below the minimum wage (you can be below legally under certain conditions). That is 2.5 percent of all workers and 1.5 percent of the population of potential workers. Within that small group, 31 percent are teenagers and 55 percent are 25 years old or younger. That leaves only about 1.1 percent of all workers over 25 and 0.8 percent of all Americans over 25 earning the minimum wage.

This author very deceptively states “31 percent are teenagers and 55 percent are 25 years old or younger,” leading the reader to believe that a pithy 14% of minimum wage workers are over 25; what the author does not tell you is that he actually means that 31% are teenagers and 24% are older than 19 and younger than 25, totaling 55%.  He then rattles off a couple of figures that are around 1%, in order to conceal the fact that 1.8 million workers over 25 make minimum wage (BLS 2012, above).

However, this is only 1.1% of the equation and only 0.8% of the whole story.  After all, a minimum wage hike wouldn’t just affect those that make the current minimum wage, but everyone who makes less than the target wage.  In this case, a $15/hr federal minimum wage would benefit over half of all workers in the US [7].  Despite the allegations of minimum wage being inherently racist, a $15/hr minimum wage would benefit black people proportionally more than white people (52% of black workers below $15/hr, compared to 47% of white workers).  As a bonus, it would benefit women by an even greater margin–54% of female workers vs. 41% of male workers [8].

Are minimum wage laws class warfare?

I wish I could say that the minimum wage would really make a major impact in the distribution of wealth, that this would be some sort of death stroke to the capitalist order.  An increase in minimum wage to $15/hr would cost approximately $1.9 trillion, or about 11% of the US GDP [9].  Is this “class warfare”, to say that roughly 55% of workers should receive 11% of its wealth?  Only if you’re in the top 10% of people who own 75% of the US’s wealth.  Otherwise, it’s probably more akin to class warfare to concentrate half the country’s wealth in the hands of 1 out of every 100 people (which happened mostly post-recession), especially considering the bottom half of workers own just 1% of the country’s wealth now [10].

No, this is not “class warfare”, it’s “class, more fair.”  Minimum wage of course preserves the existing class structure, but does make it so the lowest classes are not reduced to near-slavery.  Not that I’m defending minimum wage on the basis that it isn’t class warfare; I wish it were.  Class warfare, which would be more desirable, is more like this:

What we want is not a redistribution of overcoats, although it must be said that even in such a case, the shivering folk would see advantage in it.  Nor do we want to divide up the wealth of the Rothschilds.  What we do want is to arrange things that every human being born into the world shall be ensured the opportunity, in the first instance of learning some useful occupation, and of becoming skilled in it; and next, that he shall be free to work at his trade without asking leave of master or owner, and without handing over to landlord or capitalist the lion’s share of what he produces.  As to the wealth held by the Rothschilds or the Vanderbilts, it shall be used to organize our system of communal production (Kropotkin 1892 pp.33-34).

Taking 11% of the country’s wealth for half its people, as in, each person in that group gets 1/5 of an equal share, is not class warfare; it’s not even demanding a fair share, it’s just demanding that one full-time job be able to support a person enough to not have to live in squalor without taking a second job or going on welfare.  Considering this comes from the same crowd that wants to gut welfare because it “makes people dependent” or some such crap, you’d think they would want jobs to pay a living wage so they can further justify eviscerating social programs so their criminal friends get more money.  Maybe they should just be honest and say, “fuck poor people, and anyone else who’s unhappy with how things are.”

Just deal with it, whiners

Another popular attack on raising wages here is that poor people actually aren’t poor and should quit complaining and get back to work.  It usually goes something like this:

Americans who live in households whose income is below the federal “poverty” level typically have cell phones (as well as landline phones), computers, televisions, video recorders, air conditioning, refrigerators, gas or electric stoves, and washers and dryers and microwaves, according to a newly released report from the Census Bureau [11].

Those ungrateful poors are not only engaging in class warfare, they’re actually super-rich and are just mad that they’re not ultra-rich.  There may be other criteria that people use to judge their quality of life, such as whether or not they have their own land, get to decide what kind of work they do and who benefits from it, have education available if they want or need to change occupations, how much leisure time they get, and so on.  The consumerist perspective that Americans are supposed to accept ignores these factors, because they can’t be made by workers even poorer than our poor workers and shipped over here; they have to be created over here at the expense of some of the profits of our growth.

Another compares them to foreigners: “Even minimum wage workers in the U.S. are richer than 87.36% of the people on the planet. As much as we might complain, just by being alive in 21st century America, even if you’re lower or middle class, you’ve ‘won first prize in the lottery of life'[4].”  This is great if the argument is about the number of dollars you make, but this is about the money that our poor make compared to the money that our rich make.  What’s especially telling about the both of these objections is that a similar analysis is never applied on whether or not the wealthy should keep 95% of all new income [12].  The small fraction of our country that owns the plurality of its stuff probably have pretty good lives, don’t they?  Shouldn’t we be concerned with whether or not they should get raises?

Are poor people getting paid objectively what they are worth?

Yet another argument goes that the market has decided what wages people are supposed to get based on how much they contribute to society.  The situation is supposed to be fair because everyone else became more valuable workers in order to get paid more.  But is it really “the market” which has decided that people should be paid less than they can live on, and are we really unconcerned with fairness by advocating for a minimum wage?  Certainly in terms of “fairness”, it’s less fair to expect someone to work 40 hours a week and still not even have enough to survive, than it is to say they should get paid “more than they are worth”.  Certainly “the market” in this case is really just employers; it’s employers who have decided what they are worth, not some natural force that we passively observe.

The argument for fairness can take one of two forms: Everyone is expected to work harder and become more valuable workers in order to get paid more, so should the prospective minimum wage earners; imposing a minimum wage is a tyranny of the majority over the minority, and destroys individual freedom.  These two arguments cannot be wielded in tandem, since capitalism did not become the ruling order through consensus or individual decision, but by minority imposition on the majority.  Conversely, the wages that are paid to workers now (or rather, in the absence of a minimum wage) is a tyranny of the minority (employers) on the majority (the 55% who make less than $15/hr), which is obviously no better than a tyranny of the majority.

This argument is closely related to the most “objective” argument, and also the most popular:

You don’t understand basic economics

Ah, the favorite deflection of the reaction, “You don’t understand basic economics.”  The most widely-cited argument against minimum wage is that we “don’t understand basic economics”, because according to its “laws”, minimum wage increases unemployment.  According to this argument “all” evidence backs up this link, as well as “basic economics”, where prices are actually just the intersection of empirically-observable natural phenomena.  But not only is “basic economics” based on nothing more than how we’ve decided to behave according to the set of institutions we obey, but the link between minimum wage and unemployment has become more dubious lately [13].

The assumptions that the “basic economics” argument depends on are similar to those above: People should be paid at most what they produce; employers will respond to the higher price of “labor” (people) by laying off workers.  Minimum wage is therefore an “inefficient” way to help the poor because rather than get more money, they will actually lose their jobs and get no money.

Nowhere is it mentioned that the caveat to this is that the behavior of markets is entirely fictional, created by us.  All of those espousing these arguments expect the poor to figure out some other way to improve their lot in life than deciding as a group that paying people poverty wages is unacceptable.  Yet none of them expect the public to pay a few extra cents for a shitty hamburger; none of them suggest “let’s do this instead”; most tellingly, none of them expect employers to buckle down and deal with making less money.  It is always the poor who have to make do, become more valuable, gain skills, be thrifty, and accept what is decided for them.  This is “individual freedom”, whereas mandating that you can’t exploit the desperation of those who aren’t making enough money to survive and pay them less than they need to do so is tyrannical, and will actually hurt them–why?  Because employers would never even think of paying them more money voluntarily.

Nowhere in this debate is it considered that perhaps people deserve more than simply what they produce.  While a $15 minimum wage would certainly help over 100 million people, it’s still, in a way, based on the idea that people are only worth something if they’re producing something.  But the counter-argument for minimum wages takes an even more extreme stance: most of the people in this country that are producing something are not even worth paying enough to enjoy the basic necessities.  Employers are perfectly within reason to pay employees less than this amount, and we should fully expect that they will fire workers should have to do otherwise.  Not only is this reasonable and expected, it’s actually a “law” of nature that the objective science of economics has discovered.

Nowhere in this debate are employers expected to make themselves more valuable.  Workers must get skills and experience before they are allowed to receive a survivable wage, because they simply aren’t valuable enough to pay any more than what they already get.  However, employers should dump the extra cost of paying people a living wage by firing workers they can’t afford.  Why should they be expected to make their businesses more valuable in the marketplace?  The poor should just quit complaining and work harder.

Perhaps raising minimum wage does increase unemployment.  Has that ever bothered these same groups that are now waving their hands shouting that the sky will fall?  Of course not: For example, when we suggest basic income as a prescriptive fix for the expected higher levels of unemployment as machines take over jobs, we are assured not to worry, because the free market takes care of the job losses.  When businesses shut down due to unionization and the workers all lose their jobs, it’s the free market working fairly.  When employers pay certain types of workers or certain demographics less money, it’s individual freedom, not class warfare or racism.  When millions of people lose their jobs because the economy collapsed, it wasn’t the holy job creators’ faults, even though they definitely caused the speculation bubble and subsequent pop, got paid trillions of dollars in bailout money, and then dumped all the responsibility on the poor anyway while giving themselves bonuses.

It’s only when the prospect of having to pay them more comes up that the wealthy (and the suckers that proliferate their ideas) suddenly care about blacks and the poor.  They are perfectly content putting economists to work to prove that minimum wage is a bad idea, but have no interest in providing a viable alternative that would benefit workers anywhere near as much, other than “get back to work, whiners.”

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One response to “Should the minimum wage be raised to $15/hr?

  1. Pingback: Quotebag #113 | In defense of anagorism·

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