George Will wrote a column yesterday that laid out, pretty clearly, some of the arguments against raising the minimum wage. Whenever I am asked about it, my usual response is to say, "Cool! Let's raise it to $20 an hour!" Of course, that's stupid. Unless you want your $2.99 value meal to cost 12 bucks, you can't pay the fry guy at Wendy's $40k a year. But if the math works that way for a large increase, it works the same way (just less dramatically) for a small one. That's how math works. Let's assume for a minute, though, that a small and gradual raise in the minimum wage would increase prices by a small enough amount to be worth the trouble (although that's just for the sake of argument; if wages and prices rise by comparable levels, nothing really changes). Why would that be so? Well, to help the "working poor," of course. Some poor shmo making the current $5.25 an hour, putting in full-time (40) hours, and never taking a week off would make just under $11,000 a year. That stinks, and even a single person couldn't live like that. A married couple or roommates pooling two such incomes could perhaps barely scrape by, and that's not counting kids (or who would take care of them if both spouses had to work full-time).
But here's the catch--hardly anybody actually DOES that. Will gives the statistics, but think: do you personally know, or have you ever known, an actual, fully-functional adult who works full-time for minimum wage for more than a very short introductory period? I worked for the minimum ($3.35) when I was 16, washing dishes and bagging groceries. But even as a kid, by 17, I had earned a couple of raises. And that was part-time, after-school, and summer work (and, as an aside, the work I did wasn't really worth much more than that). The vast majority of people earning the minimum wage fall into those same categories. So in trying to help this hypothetical hard-working-but-terribly-unskilled fellow, what we really do is make it easier for a bunch of high school kids to gas up their clunkers and go to the movies. Why raise everybody's prices (and the entry-level unemployment rate) for that?
Now, here's a thought. If we absolutely MUST do something legislative to ensure that the working poor are not getting abused by evil employers, let's at least target the program. If you are still claimed as a dependent on anybody else's tax return, you could qualify for a sub-minimum rate. Of course, that just means that those greedy bosses will likely try to hire kids instead of adults, unless, of course, the adults' production is actually worth what they are being paid. Darn those laws of basic economics!
Not that any of this matters. This is a done deal. The new congress will easily pass a $7.25 wage, President Bush will gladly sign it (he's "compassionate," remember?), they'll phase it in, and most of us will not notice the gradual uptick in the cost of everything. Likely, other wages will follow in lock-step (the guy currently making $8 and happy about it will be less so when it's only 75 cents above what the rookies make), so we'll achieve pretty much parity with where we are now. But there will still be pockets of poverty, aggravated by very poor lifestyle choices (dropping out of school, having kids before or instead of getting married), and in a few years we'll be having the same discussion. Here's hoping teacher pay keeps pace.