Jay Evensen
  • Front Page
  • Opinions
  • Second Thoughts
  • Portfolio
  • Awards
  • About

Is the minimum wage the best way to help the poor?

2/8/2021

0 Comments

 
I know a teenager who works at a warehouse for $14 an hour. If Congress passes President Biden’s plan to raise the federal minimum wage to $15 (gradually, over four years), this young man would eventually benefit, but not much. 
He would benefit more if he lived in Alabama, where the cost of living is low, but much less if he lived in California. If he lived in Seattle, where the city’s minimum wage is $16.69, as of January 1, and if he had a similar job, he might consider his newfound raise a windfall. That is, until he tried to find a place to live.
Americans can’t really begin a serious discussion about the minimum wage without first recognizing that its 330 million people are scattered among different, sometimes widely varying markets.
Unfortunately for this political climate, this is a complicated issue.
It might make more sense to settle the wage issue in state houses and city halls. If you believe in the premise that when government puts its thumbprint on the economy, it can’t help picking winners and losers while messing with the natural ebb and flow of markets, you probably would agree it’s better to keep that thumb as close to home as possible.
That’s already happening, to some extent. Twenty-nine states, plus the District of Columbia, have minimum wages higher than the current federal minimum of $7.25. Some, like Georgia and Wyoming, have lower minimums, which typically apply only to businesses not engaged in interstate commerce. Several, including Utah, simply default to the federal wage. 
Or perhaps, as some have suggested, Congress should set a median minimum wage, then adjust it up or down depending on the cost of living in each market.
You could ask a roomful of economists about this and get a couple of rooms full of opinions, which is why that premise about government is a good guidepost.
About that thumbprint, economists argue endlessly over whether requiring businesses to pay more would cost jobs. 
Nearly two years ago, the nonpartisan Congressional Budget Office took a dry-eyed look at how increasing the minimum wage to either $10, $12 or $15 would affect employment and family income by 2025. The answer was a bit in between what advocates on either side of the issue are saying.
A $15 wage, the CBO said, would pull 1.3 million Americans above the poverty line by 2025, but it would cost another 1.3 million workers their jobs. About 17 million people would get a raise.
The impacts would be less for a $12 wage, helping about 400,000 people escape poverty and sending about 300,000 to the unemployment line. For $10 an hour, you don’t change much either way.
That’s because the market generally has left the 12-year-old $7.25 minimum wage in the dust. As the Wall Street Journal recently noted, even WalMart starts workers at $11 an hour these days. 
The Bureau of Labor Statistics reports that, in 2019, 1.6 million people earned at or below the federal minimum. That’s a scant 1.9% of all hourly wage earners. By comparison, the usafacts.org website says 13% earned the minimum wage back in 1980, demonstrating how irrelevant it has become to most Americans. 
And of that 1.9% who earn it today, the largest share is among workers 16-24 years old, which includes a lot of students with part-time jobs, either living at home or getting help from parents. 
That doesn’t erase the fact that minimum wage earners also include some low-skilled, uneducated adults struggling to care for families — a fact that often leads to greater federal expenditures through other social programs.
So, which should it be — cost a bunch of workers their jobs by raising the minimum a lot, or raise it a bit to catch up with the market and cause as little harm as possible? That wouldn’t affect the teenager I spoke of earlier much. It also wouldn’t give much relief to those few struggling families who work for the minimum.
The real issue here for many people is the ability to afford a place to live and food to eat. Doing that through a minimum wage may be a never-ending circular race to catch our own tails. Consider that, in Salt Lake County alone, rent rose 9% last year alone, and it’s still going up.
Maybe a better choice would be to increase earned income tax credits, provide better adult education and training programs, do a Mitt Romney-like monthly payment to families or provide some other basic income program.
Wouldn’t it be good to have a serious discussion about all those things rather than endure the predictable political barbs about the minimum wage likely to drive this decision?
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    RSS Feed

    Search this site


    Like what you read here?

      Please subscribe below, and we'll let you know when there is a new opinion.

    Enter your email address:

    Delivered by FeedBurner

    Picture

    The author

    Jay Evensen is the Senior Editorial Columnist of the Deseret News. He has nearly 40 years experience as a reporter, editor and editorial writer in Oklahoma, New York City, Las Vegas and Salt Lake City. He also has been an adjunct journalism professor at Brigham Young and Weber State universities.

    Archives

    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012
    November 2012
    October 2012
    September 2012
    August 2012
    July 2012
    June 2012

    Categories

    All
    Campaign 2012
    Congress
    Crime
    Culture
    Iran
    Oil And Gas
    Poverty
    Steroids
    Taxes
    Utah
    Washington
    World Events
    World Events

    Links

    Deseret News
    Newslink
    Marianne Evensen's blog

Powered by Create your own unique website with customizable templates.