Tavern Philosophy: Rethinking the Minimum Wage

pub thinking, considering the minimum wage

Last night over a beer I had a partial conversation with a friend about the minimum wage increase. It was a partial conversation because it was being discussed in the larger context of the busy day. About how much we love cheese sticks. About how steep a price the Philadelphia Eagles paid to move up to #2. In short, we touched the bare surface of the debate.

But my short response to the $15 minimum wage was this: I’m for it.

My friend brought it up because there is some early evidence that Seattle’s job force has been affected detrimentally by the increase they passed last year. There is some evidence, as well, that jobs will be lost in the clothing and food sector in California as the wage increase goes into effect. UC Berkeley has reportedly cut some 500 jobs already, in response to the bill. Hard to know how much of that is connected to minimum wage increases, but it is something to consider.

Here’s what we do know: we know that over the course of the last 40 years or so the minimum wage, and the wages of all lower and middle class workers, has stalled. In many cases and in many industries real wages have actually fallen. Fallen.

“Real wages,” by the way, is an economic term that essentially means wages in comparison to inflation. It reflects on how much buying power you have with the wages you receive. $4 an hour, for example, had the same buying power in 1973 as about $22.50 an hour would buy today.

The conversation, as brief as it was last night, prompted me to wake up, pour coffee, and research the heck out of the topic. I learned some things. I learned that minimum wage in 1973 was about a buck-sixty and would be about $10.50 today if tied to inflation. It would be the rare bird that would argue with at least a $10.50 minimum wage today. But inflation is hardly the only index to tie wages to. If tied to worker productivity – the amount of output a worker can produce in one hour, comparatively – the minimum wage today would be around $22 an hour.

In other words, the minimum value of the American worker has increased at more than twice the pace of their salary.

Look, we all know where all the money goes by now. As American productivity has increased the wages for top earners have reached astronomical levels. Meanwhile, the wages for average Americans have stagnated or decreased.  Corporate profits have soared, at far past the adjusted levels of both inflation and productivity. The American elite took your gains. Thank you for all your hard work.

So, yeah, I’m for an increase in the minimum wage. It’s the least we can do for the least among us. Give some back. But that is not the solution. It’s a strike against the establishment, but it is not the solution.

Had my conversation continued with my friend I would have laid some of this down, and more. I would have talked about the living wage and the inequality in America. About the automation of basic services. About a basic income for everyone. I would have talked about the leisure life that is, or should be, coming for all Americans, and for all people in the democratic world.

My friend told me that companies in Seattle are replacing human workers with machines. I’ve been hearing how this is coming for years, and there is evidence that half of all American workers will be replaced by automatons in the coming decades. There is even evidence that nearly half the workforce could be replaced by robots now. My answer to the automated services in Seattle was … “good.”

We need to move beyond the work-for-pay epoch of American life, anyway. We need to end wage slavery.

Unfortunately, we didn’t get that far in the conversation, we were distracted by group texts, refills, salad dressings and those belly laughs that make midweek beer-stops in local taverns so worthwhile. I didn’t mind that. I never do.

But I’m grateful for the conversation, however brief, because it got me to think. It got me to pull up facts, to read more from both sides, and to burst through once again to the larger truth. I’ve been telling everyone who will listen that a $15 minimum wage is good. But I always forget to finish the sentence. It’s good, but it is not good enough. It won’t level the playing field. It won’t end the horror of abusive inequality. We know it won’t end the reign of the almighty dollar. It won’t even come close.

But do it anyway. At best, it gives some form of living wage to the slaves of society. At worst, it reveals the flaws that remain in the system and we’ll have to rise up even bolder to fix them.

A $15 minimum wage is just a band-aid. But when you’re bleeding and you have to do something to stop it, sometimes a band-aid will do. Let’s put a band-aid on the problem, order another round, and talk about real solutions to all of society’s ills.

And while you’re at it pass the cheese sticks. I love cheese sticks.

8 comments on Tavern Philosophy: Rethinking the Minimum Wage

  1. Nice article as always Tom. If you do a follow up, I’d be interested in your thoughts on how to effectively adjust the middle class in relation to the minimum wage increase without driving the costs of everything up faster?
    Food for thought; Jackie went to school to be a medical assistant. She now has a student loan to pay and she found out not long ago she now makes the same or less than a greeter at Walmart she met a month or so ago?

    1. Thank you for reading and responding, my friend … very good question! I promise to do a follow-up and talk about that; I’m always up for a challenge! The simple answer is, the market will adjust that. The libertarian right will love that response, but in a sense, it’s true. But like I stated, that is a band-aid, not a solution.

      The bigger issue I’d like to address is your final comment/question. Student loan debt is a crisis of epidemic proportion. I consider education, like health care, to be an essential human need along the lines of food, shelter, clothing. She shouldn’t have to go into debt for her job.

      I’ll leave you with this question: does the greeter earn $15/hour, and does the greeter work a 40-hour week? The proposed laws, such as they are, are an attempt to ensure that every person in America who works a 40-hour week has enough to support themselves. If that greeter already makes that the next question is, is that $15/hour, 40-hours-per-week job enough to cover essentials like food, shelter, clothing, health care, and education? If not, then that minimum wage is not enough.

      Again, I believe there is a better way than minimum wage — there is basic income, universal health care, and free education, for example — to address the needs of society. But this is what we have, for now.

  2. I disagree with the minimum wage hike but I absolutely agree that automation and the loss of good middle-income jobs is a huge problem. The solution lies there. The band-aid approach will only make matters worse. Rubio has had the best band-aid/temporary solution until we can correct the lack of living-wage jobs: keep minimum wage low (there’s no reason a 16 year old high school kid needs $15 per hour flipping burgers), then for head of household minimum wage workers provide a temporary subsidy. It’s sort of a mix of work and welfare but it doesn’t put the burden on the back of the employer to pay an employee a wage that doesn’t fit the work.

    I always hear the argument that CEO’s are taking the money that the workers should be making. The thing is, there aren’t that many of those CEO’s when you compare them to small companies, one owner, struggling to pay their employees and leave something for themselves. There are way more of those companies than companies with million dollar CEO’s. What are they going to do when their payroll goes up 50% over the next six years? Their payroll taxes and worker’s comp are based on salary so those costs go up too. Their options are to pass the costs on to the customer, (which they will only be able to do so much), reduce their workforce (layoffs), or reduce what they pay themselves, which means their family suffers. The reality is it will be a combination of all three of those things.

    1. Thanks for chiming in on this, John … well spoken. I come from the angle that loss of jobs is not necessarily the problem; why force everyone to work if society can operate just as efficiently with half the work force? I think automation is one of the solutions, not one of the problems. Minimum wage, increasing to the index of productivity, seems necessary as long as everyone must work for a living. I do like the Rubio solution just as well, however. It provides a guaranteed basic income to at least some of the population, and that’s a start!

      I’m not against the CEO’s themselves for making whatever they can get, same as movie stars and sports figures. That’s the system. CEO pay is just a small part of a much larger systemic failure. It is capitalism itself — with its well-documented atrocities spanning centuries in the name of avarice — that is on trial here. Like I mentioned, a higher minimum wage will either work to level the playing field, somewhat, or it will reveal a much larger failure in the system itself. I believe, perhaps idealistically, that we are on the precipice of a radical awakening.

      Look forward to having a tavern discussion with you some time, John! 😉

  3. This truly is a sticky wicket of a topic. I look at the fast food industry. Let’s not kid ourselves that forced $15/hr will eliminate positions in place of kiosks. Corporations are NOT going to lose shareholder value over this. They are in it for themselves. I know…I’ve worked for enough of them up to GMgr status of $45/mil year store I run ages ago in my retail management days. Thank god those are behind me, and am in a different career.

    Now, tack on to the wage issue the welfare state we’ve created as a dynastic culture for families and it compounds the problems even further. With no easy answer in sight.

    1. No easy answer, at all. I think of high minimum wage as a weak band-aid. The bigger issue here is the end of jobs, altogether. If we can’t pay people a living wage, even when they work most of their waking hours, because of automation, then we need to face the reality that humans don’t need to work to make society function. That fact scares the hell out of our Puritan work-ethic programming.

      But … if we don’t need people to work, but we do want people to live … what the hell else can we do?!

      There are answers in the making, but nobody likes ’em (yet). So, in the meantime, we have to give folks a chance to live off their working hours. If that hastens the end of the work-for-life society, and urges us towards a system that encourages the greater well-being, then so be it. I’m ready for change. 😎

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