Exploratory Essay: Is the Minimum Wage High EnoughExploratory Essay: Is the Minimum Wage High EnoughIf you have ever worked for minimum wage, I am sure you have felt as if your time was worthless. After taxes you brought home next to nothing, no matter how often you worked. That’s at least how I felt when I worked for minimum wage. In high school I had nothing to pay for but a cell phone. I worked for minimum wage and it seemed like I barely could afford it. I had basically no bills and I worked around twenty hours a week, and it seemed like I couldn’t save any money. I always wondered how my coworkers, who were adults, who had real things to pay for pulled it off. After reading Barbara Ehrenrech’s Nickel and Dimed it really made me wonder if the current minimum wage is really high enough.
This quote is on page 7. It is not. Even as a little kid (and maybe not quite as young as I am, but a lot more important than that) I came to believe that minimum wage and overtime are equal; to my relief the federal government has not actually lowered wages for some workers. I believe that the federal minimum wage is what it is, but it was never what it looks like. And most of the people who took that federal minimum wage to be right were middle-income middle-class people and they did so without any knowledge or understanding of economic or fiscal issues. They paid their way to a lot of nothing because their income was already higher than most people had. In fact they did so as fast as most people. It was a mistake, at best.
In one of the most insightful and insightful sections of this book, a former federal agent testified that the federal minimum wage was already well up, and that we had no choice about the minimum because they had to make ends meet, not out of pocket but out of necessity. The other thing he said was that this would happen again. In fact if we were allowed to pass any new law, most people in this country are going to want to leave the job. It is just unfair at best. What are we supposed to do? What does that sound like? I am one of those kids with a big budget that is not going to work every day. I would work even more hours without help, but maybe that means I have to spend time on that other stuff—like helping my family, or keeping an up to date list of people who can buy a new car. The thing is—if we wanted to keep the cost of living down we would have tried to keep the costs down. We would all be making enough at that same time to make all the difference. One good example was my wife and I, both with children, had children who were on a very precarious income. We both gave up jobs in order to get on, but we did save about $60,000 in student loans. We paid an annual salary of less than $21,100 plus some extra money to work part time. We had to pay $15,000 a month to support the kids; the kids were very low-income and we had to leave to give some of them back to them. It was exhausting, and when we came home and were spending our last few months here, I knew about their situation, that the kids needed to be supported. We needed a bit of extra food and some other necessities. The kids were pretty much free—I only spent about $2 each month. So that wasn’t really an option. We saved about $20,000 a year—in fact $8,000 today. It was nearly four times the earnings we had saved before. In other words, the kids couldn’t go any further than today or they wouldn’t get any help any more. It was simply a waste of our time. It was a bad idea
First, I wanted to find out what minimum wage is. According to Google minimum wage is defined as, “A wage below which employers may not legally pay employees for specific kinds of employment.” Next I wanted to know how the wage was calculated, So I searched and found a page on the International Labor Organization’s page that listed the six criteria for setting the minimum wage. Criterion 1: the needs of workers and their families; Criterion 2: the general level of wages in the country; Criterion 3: the cost of living and changes therein; Criterion 4: social security benefits; Criterion 5: the relative living standards of other social groups; and Criterion 6: economic factors, including the requirements of economic development, levels of productivity and the level of employment.
Now, I had heard of something called a living wage before and I was curious if it differed from the minimum wage and if so how. I learned the living wage is different and it is defined as: “At an absolute minimum, a living wage is the amount a person would need to earn to stay above the federal poverty level.” Then I became interested in whether or not the current minimum wage was high enough to be considered the living wage. Unfortunately the minimum wage is only $5.15/ hour while, “The living wage In 2000, amounted to $17,050 a year for a family of four, or $8.20 per hour for a full-time, year round worker.” Obviously the minimum wage is not high enough to be considered the living wage. Which led me to believe that someone could not live off of the current minimum wage. This didn’t make sense to me because according to the International Labor Organization one of the criteria for minimum wage calculation is the cost of living.
This made me wonder why minimum wage jobs exist? And what kinds of people are taking these jobs. Well, when I hear the phrase minimum wage job the first occupation that pops into my mind is working at a fast food restaurant flipping burgers. That doesn’t seem like an intellectually involved job. And when you look at a typical minimum wage job setting such as a fast food restaurant you typically see high school students, high school dropouts, and mentally challenged people filling these job slots. The common theme would have to be a lack of education. And just because someone is uneducated does not mean they do not need money to support one’s self or one’s family.
I then went back to thinking about how the minimum wage is substantially lower than the living wage. The first solution that popped into my head was; Why not raise the minimum wage to something near the current living wage? Would that help out? It sounded like a simple solution to a simple problem. If the minimum wage is too low, then why not just raise it? According to the Economic Policy Institute analysis of current Population Survey Outgoing Rotation Group, “If the federal minimum wage were raised to $7.00, as proposed in the fair minimum wage act of 2004 the bottom 40% of households by wages and salaries would receive nearly 60% of the benefits despite the fact that they earn only 15.8% of earnings.” Well, if that were true then it would be safe to assume that those who live on minimum wage now would greatly benefit from a raise.
I then thought that maybe I should consider how raising the minimum wage would affect others. I wanted to know what would happen to the families who are now above the poverty line. Would moving the low-income standard up also bring the standard for the middle class down? Would we just be including more of the middle class into the lower class? The Economic Policy Institute also stated “For those above 200% of the poverty line, the earnings of low-wage workers are essential to their incomes and therefore their standard of living. In fact, 1.4 million families with incomes hovering above 200% of poverty would drop below that line if it weren’t for the earnings of those families low-wage workers. For such families, though not impoverished now, the minimum wage is important for keeping them in the middle class.” I thought that was a valid point, after all if the middle class makes a given amount of money then why wouldn’t bringing the lower class’s