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The minimum wage hike is needed

April 6, 2021

The commentary, “Minimum wage hike will hurt more than it helps,” by Ruth Briggs King and Mike Ramone March 30, implied that the increase was too much in too short of a time frame and could cause a loss in the number of jobs. Thus, some people win while others lose. They make reference to at least four studies which support their story. I point out the following shortcomings in their story.

First, an economic study can help answer an economic question, but it is also a fact that such studies can bring out biased conclusions because of the bias of the study investigators. Readers can do their own internet searches and verify this. I have seen references - even in business media - to studies that say job loss does not necessarily follow wage hikes. It’s a subject too big to argue about in this limited space because you have to look at whether the assumptions were good, where the data came from, goals, what was ignored, and who the authors of the studies were.

Second, their implication that a hiked wage will lead to lost jobs is a joke based on a narrow look at the economy. It is a fact that the commercial sector is constantly looking to eliminate jobs, minimum wage hike or not.  Just think about all the research and development on driverless cars. Hundreds of thousands of truck and taxi driver jobs will soon go “poof.” Look at “self-checkout” lanes in local stores. These job losses are not happening because of minimum wage hikes. They are happening because of the capitalist pursuit of “efficiency.” And I think most readers should be able to explain why this is so without doing any research or needing me to fill up the extra needed space to explain.

Third, I would like to expand on something King and Ramone said early in their commentary, “The minimum wage was created by Congress as part of the Fair Labor and Standards Act in 1938. In part the intent was to protect the well-being of employees.” However, King and Ramone devoted all of their subsequent  sympathy only to business. What did they say about the well-being of employees? Not a peep. Not even “trickle down.”

Business owners, landlords, bosses, managers, etc., have much more control over their financial components and can raise prices at any time compared to people at the lower end of the socioeconomic ladder who have no choice but to take what is offered. The people on a minimum wage income have zero control over their rent, food prices, transportation costs, medical needs, etc., and - if there is any money left after that - entertainment, recreation, savings for a rainy day, and retirement.  Just think about this. Take a person on minimum wage and add up typical costs to live. They still have to work several hours to buy a gallon of gas for the car, if they even have a car. Rich people don’t have to work more than a fraction of a second to buy a gallon of gas. There are plenty of studies of how financial insufficiency is a risk factor for mental illness, medical illness, domestic abuse, homelessness, and suicide. 

Inflation - caused by price increases decided by those owners, landlords, etc., maybe to more than pay for the past minimum wage  increases - significantly erodes the buying power of take-home pay. In addition to that picture, job security is much lower than business revenue security. The boss can fire you in a tweet, but finding a new job can be difficult, and it gets much worse if you are older or the economy is not hiring. Many employers are converting full-time jobs into part-time jobs to avoid thresholds for certain mandated benefits. Thus some employees might not get in their “forty quarters” (of work) by the time they reach retirement age and thus get zero Social Security benefits. How many minimum wage people get any kind of regular COLA increases or “increment increases” in their pay? My guess would be that it takes a minimum wage increase to just break even with inflation. And, this is only a fraction of the “shaky predicament” that underpaid people are in. I appreciate that running a small business might not be a walk in the park, but I will bet that none of them would trade places with their minimum-wage employees. 

Arthur E. Sowers
Harbeson
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