Two big lies have been fed to the American worker by media, think tanks and politicians:
- Raising the minimum wage to $15 only helps entry-level and very young workers.
- An increased minimum wage to $15 leads to fewer jobs and closed businesses.
The first claim is usually presented as:
Only 542,000 American workers are at minimum wage, so why should we endanger jobs for the remaining 118 million full-time workers, just to give minimum wagers a raise. Some 320,000 of that total are under age 24, probably just students.
While the Bureau of Labor Statistics (BLS) agrees with those numbers – cherry-picked to deliberately lie – BLS also reports that 1.82 million workers are currently paid at or below minimum wage, and 933,000 of them are 25 or older – 349,000 men and 584,000 women.
The proposed increase in the minimum wage means everyone earning less than $15 an hour will see a mandated pay hike to at least $15 an hour. If you are at $10 an hour, you will get a minimum $5 an hour raise.
Looking at how the real labor market operates, employers pay workers more than others to distinguish differences in ability, learned skills or number of other employees managed. That means someone now paid $10 above the minimum wage, earning $15 an hour, should see a $10 raise to put them at the same differential above a minimum wage earner.
Half of all 80.5 million hourly workers make less than $15 an hour, which is the median pay. Some 40.25 million Americans will receive a mandated pay raise if a $15 minimum is enacted.
The second claim spiel goes like this:
Raising salaries will make a business unprofitable because it can no longer compete. A fast food mom and pop store can’t afford such a hike.
If only one business has to raise wages to $15 minimum, some argument can be made in favor of objection #2, but if all businesses must raise wages to the same minimum, everyone is on the same compensation level and no company has a competitive wage advantage.
Economists from UC Berkeley examined the most recent outcomes in six major cities that have significantly raised the minimum wage. By comparing these cities with similar places that didn’t raise the minimum wage, the study showed no statistically significant employment effects from the wage hikes.
The mom and pop claim is misleading by itself. Any business with less than $500,000 in sales is exempt from the federal minimum wage, and so are independent contractors, outside salespeople, workers on small farms, employees of seasonal amusement or recreational businesses, as well as many students.
Giving half of American hourly workers a mandated raise, and putting pressure on employers to keep wage differentials on the remaining half or workers, will boost the economy and lower taxes.
With higher wages federal and state income tax revenues will soar. More FICA taxes will be paid, guaranteeing the fiscal health of Social Security and Medicare. States will receive added sales tax revenue as consumers increase spending of discretionary dollars.
More cars will be sold, houses bought, vacations taken.
Fewer families will need food stamps when they earn enough to buy food.
Section 8 housing will dwindle as better paid workers can afford rents.
Earned Income Tax Credits (EITC) will virtually vanish as higher wages won’t need subsidization by taxpayers.
Small and medium-sized American businesses will thrive, as more and more dollars flow to potential customers.
The only ones left out of this bright future might be the financial industry elites.
Wall Street flourishes from dealing with very wealthy folks. So-called “economists” will contend that even a small wage increase severely impacts how much money falls into the pockets of the richest owners, leaving less to waste on yachts, merging companies to form monopolies, or just carousing at some $15,000-a-night hideaway resort – not to mention private planes, private islands and even, private armies.
Poor Wall Street! A real minimum wage could reduce their share of the economy from 20% of the GDP in 2018. It might even go back to the 10% it owned in 1947, but that’s unlikely, as long as Congress continues to shield the “super capitalists” from regulation.
How they solved the problem “Down Under”
Australia has always fascinated me, and not just because some of my ancestors moved there to help build that nation, along with millions of other “despicables” from Great Britain.
That continent and America were the freedom destinations for the Irish and English poor, who became indentured workers, toiling without pay for seven or more years to pay for their sea passage.
About half the American population in the mid 18th century were white and indentured, and even their children – born during such service – were automatically indentured until age 21 or older. In addition to indentured workers, Australia was a prison colony, and for a minor crime you were incarcerated and used as slave labor, often for life.
Let’s compare their minimum wage with our $7.25.
That $19.49 buys you plenty, considering Australia’s single-payer universal health care, low-cost public colleges, and $30,000 salary basement before paying back student loans.
You will notice that the minimum wage is much lower for students and varies by age for everyone. Apprentices are paid less.
There are also minimum wage variations by industry and occupation.
This is an example: Australia Restaurant Pay Guide
Minimum wage can increase by $5 an hour in the example guide, and wages on weekends and holidays are much higher.
Where do we go from here?
The Raise the Wage Act has passed the U.S. House of Representatives (H.R. 15) and still sits in the Senate (S.1242), where it will most likely die. It sets a $15 minimum by 2024.
Before the Raise the Wage Act, there has been no increase since the Fair Minimum Wage Act was passed in 2007. That long-delayed change raised the rate to $7.25 by 2009 – ten years ago.
Pessimism about passage comes from looking at the corporate-beholden members of the Senate, whose campaign donors are the very ones affected negatively by a fair wage for Americans. It can also be argued that the House passed the bill to get votes, realizing it would never become law because of Senate inaction.
Keeping workers competing for jobs and underpaid, while forcing both spouses to labor just to pay necessities, is a mantra of our profit-minded establishment.
A cable tv business channel anchor, Charles Payne, recently commented:
If people on minimum wage want more money, they should just get a second job.
Even if they did, it would take more than two jobs to earn the $5 million annually that Payne is paid for sitting at a desk and prognosticating about the “little people” and their need to sacrifice to enrich their employers.
A moment of stark reality is in order.
When Payne attends work one day, he earns as much as a minimum wage janitor is paid in an entire year. That means it would require the janitor to work hard for 365 years to match Payne’s one-year haul.
Nobody who sits and talks for a couple hours is worth 365 times as much a guy who breaks his back all day, so the rest of us have clean floors and toilets.
Time to raise the minimum wage. Among other blessings, the folks “down under” might stop looking down at us in wonder.
One thought on “Pains of poverty from slave pay are just ignored by politicians; Elite class uses phony arguments to fight $15 minimum wage”
Capitalism, or whatever other fancy word one might want to label it, is an economy designed to make the wealthy wealthier, and the wage slave dependent on those money hoarders. But until those wage slaves start looking at the facts, instead of listening to their slave-owners (in most cases) about what the truth really is, they are going to fear words like socialism or communism.
And they will never vote for anyone who truly cares about them. The truth is, nobody really cares about them, and that is sad. MONEY IS MORE IMPORTANT THAN LIFE. And nobody asks why…