Why a $15 minimum wage is not even enough
While current political discussions in the U.S. involve whether to raise the $15 minimum wage, I argue that that doesn’t go far enough.
I’ve been watching the recent political wrangling around the new federal economic relief bill. Looks like now that actual competent individuals are running our government again-people who are actually invested using the power of government to help make people’s lives better-that some real assistance is on its way.
(As a total aside, it’s so nice to be able to consume news without feeling like I’m being sucker-punched to the gut with every story.)
At the time of writing here, during the discussions and negotiations about the upcoming legislation, the question of whether to include or exclude a rise in the federal minimum wage to $15 has been floated in countless news articles.
And at the moment, it looks like that the proposal is likely to not be a part of the COVID relief bill, though if so it may resurface soon after.
All of this has made me think more about minimum wage, and financial justice in general. And what continues to come up for me, after even a few moments’ thought is not whether a $15 minimum wage is or is not a good idea.
Because it’s not. A $15 minimum wage isn’t a good idea.
The real minimum wage needs to be much higher.
What is $15 an hour really?
If you earn a salary and have for a while, you may not be able to intuitively grasp what an hourly wage translate as for someone. You may know what $50,000 a year feels like, but what’s $10 an hour, or $15 an hour, feel like?
Luckily, there’s an easy trick to converting an hourly wage to a yearly salary. All you do is take the hourly wage and multiply by 2,000.
So $15 per hour, if worked full time, is roughly $30,000 a year.
Why does that work? Well, there are 52 weeks in a year, and a full time wage is 40 hours a week.
And 52 times 40 is 2,080. Minus two weeks for holidays and to make the math easier, and you have 2,000.
I believe that if you are working a full-time job, then there is no way that you should be living in poverty.
I’m not saying that everyone needs to live in the lap of luxury, but to work a full time job and live in poverty, and for that to be allowed, doesn’t seem fair or just.
Now, okay, if you’re a high school kid working at McDonald’s just trying to make pocket money, living at home, then the need for living wages decreases somewhat, of course.
But who actually works at McDonalds?
According to a study done in 2013, almost 40% of fast food workers are 25 and older, and more than a quarter are parents.
If you think it’s all teenagers, your ideas are a little outdated.
Can you imagine raising a family on a McDonalds salary? In the same study, they announced that the vast majority of fast food workers earned between $7 and $10 an hour.
Converting to yearly salary, that’s between $14,000 and $20,000 a year.
Is that enough?
Let me swat away the standard objections quickly.
“If you don’t like your wages, then get another job.”
This is a great blame-the-victim mentality. If companies know that they can undercut each other for the low-wage market, they will. And when you need to pay rent, self-actualization isn’t on the top list of priorities. You’re going to take what you can get.
So I’d say instead of letting companies be bad actors and letting the vulnerable do their own self-advocacy, I say we prevent companies from being bad actors.
“If we paid more wages, then companies wouldn’t be competitive.”
If this is true, and I’m not saying it is, but if it is, then this means that our economic system has failed. While being the richest nation on the planet, we apparently can’t survive competitively unless we have an underclass of poverty-level work.
And I’m not picking on rich people, but Jeff Bezos is currently worth around $180 billion, which is, to put in context, enough money to pay 3.6 million people a $50,000 wage for a year.
$15 isn’t enough
While more money isn’t the answer, for many people it certainly would help.
In 2003, I was working as an assistant manager in a retail store in New York City. As a result of this, I got to see what my fellow co-workers were making in wages.
I was one of the higher paid employees there, making, if memory serves, around $15 an hour.
The lovely woman who worked the front counter made-get ready-$9.
This woman, who couldn’t have been any older than 25, had two young children, both of whom she would take to school on the subway before going to work at the office. She, with three mouths to feed, was making $9 an hour.
That’s about $13 an hour in today’s money. In, I repeat, New York City.
Now stop and listen to your thoughts. Do you hear empathy in your internal monologue? (“That’s terrible, that’s so unfortunate that she had to ensure that.”) Or do you hear judgment and derision? (“Why did she have all those kids if she couldn’t afford to feed them?”)
If it’s the latter, I mean this in the nicest possible way, you should feel ashamed of yourself.
You’ve been sold the big lie that you somehow were self-sufficient, not relying on help or privilege or luck, and that others and not worthy of your support.
You’ve been sold this so that we pit ourselves against each other, while many people in power profit off of our own cage match, laughing all the way to the poverty-wage bank.
Even if we could agree that this woman’s life is her “fault” (whatever that means), we will never agree that it’s not our responsibility to help people who haven’t been able to successfully help themselves.
Could you survive on $15 an hour?
$15 an hour, or $30,000 a year, is roughly around $1,800 a month, take home.
Go do the math. Find rent at $600 or less. Find all of your bills, including groceries, utilities, and transportation, that will fit into the remaining $1,200.
Even if you shack up with someone else in the same situation, it’s going to be hard.
And even if you can, are you going to be able to pay off debt, build wealth, save for retirement, have a family, and get ahead?
Now, recall that the federal minimum wage is now $7.25, or less than half that.
Where does it end?
While we fight about minimum wages, we implicitly agree that it’s okay to push wages down as much as possible, making people compete, Hunger Games-style, for the scraps of our wage-working world.
“But if we up the federal minimum wage to $15, why not $20, or $50, or $100 an hour? Where does it end?”
“Where does it end…” arguments are the last refuge of the conservative scoundrel if you ask me. It implies a devious outcome on the other side of the ellipsis, without ever having to state it, allowing anyone’s deep-seated fears to run wild. Where does it end?
How about: it ends when we eradicate poverty in our country.
How about: it ends when everyone has access to enough food.
How about: it ends when we stop relinquishing our responsibility to our fellow citizens by telling people that if they’re not successful, it’s their fault, regardless of systemic injustices, medical issues, genetic lottery, bad luck, or other things outside of people’s control.
As I’ve said for years, the real problem in our society is our lack of empathy, or inability to truly feel a kinship with other people, especially if the other people look different or have made different life choices.
And this no doubt causes all of us to be poorer because of it. While we fight about minimum wages, we implicitly agree that it’s okay to push wages down as much as possible, making people compete, Hunger Games-style, for the scraps of our wage-working world.
So the idea that we’re even arguing about whether $15 is the minimum wage we should be working toward feels too modest, too small, too little. We are too rich as a nation to do that.
So if changing the minimum wage isn’t the answer, and I’ll admit that it may not be, then I would love to hear what your idea for reducing poverty is.
But it seems to me that it’s an obvious place to start. A society free from poverty is a society well-positioned to prosper, and everyone of us will benefit.
Originally published at https://empathicfinance.com on February 8, 2021.