On the Minimum Wage and Free-Markets
Hello everybody. It’s the day after Thanksgiving here in the States. I hope you all sufficiently stuffed yourselves with turkey or tofu, depending on your preferences. But now that we’re solidly into the consumerism orgy that is the holiday shopping season, I thought it was time to hit on a topic that has been brewing in the back of my head for a bit.
A number of very popular stories have hit social media recently, including signs in several Wal-Mart stores asking for donations to help feed needy employees, or McDonald’s workers being told how to avoid hunger pains. Related, and most interesting to me, is a new law recently passed in Washington State that sets the minimum wage at $15 per hour.
Predictably, this move has been met from certain quarters with cries of government intrusion into the free-market, a sense of entitlement on the part of minimum wage workers, and numerous predictions of a cataclysmic increase in the price of goods and services to the public at large.
First of all, as I’ve said before, I am a conservative. I support low taxes, a relatively free market, and an unobtrusive government. So it may surprise many of you to learn that I support Washington’s experiment.
To understand why, let me define a couple of terms, so as to avoid confusion later. First up is Full Time Employment. For many decades, it has been generally accepted here in the U.S. that a person is considered a full-time worker if they work forty hours per week. The old labor refrain of “Eight for work, eight for sleep, and eight for what we will” seems to be a reasonable balance. Excluding weekends, this is where the entire concept of the forty hour work week came from.
Second is Minimum Wage. For many conservatives and business owners, the concept of the minimum wage is nothing more than the absolute least they are required by law to pay their employees, but I take a slightly different outlook. To me, a minimum wage must both logically and morally be tied to a minimum standard of living for the term to have any meaning. As far as I’m concerned, a true minimum wage would be one that allows a full-time employee to afford rent, transportation costs, groceries, electric, heating bills (for those of us in the northern latitudes), health insurance, and some modest contribution to a retirement account. If an employee’s pay for a full week of work can’t cover these minimum expenses, then how exactly does it qualify as a “minimum wage”?
“But!” shouts people not actually on the bottom rung of the socioeconomic ladder, “If we pay them enough for all of those things, the price of our Big Macs and Tall Chai Lattes will go up! And that’s not fair!”
Well, as a conservative, here’s my problem with that argument. We are already paying that extra cost. Right now, we make up for the artificially cheap prices for goods and services created by low wages by paying more taxes into the welfare and other social safety net systems, be they housing assistance, SNAP, or a dozen other programs that help the working poor close the gap between their “minimum wage” and what they actually need to survive.
I don’t approve of that system. Here’s a simplified version of why. I don’t eat at McDonald’s, yet every Big Mac sold in this country is supplemented by MY tax dollars going into welfare, (and beef and corn subsidies, but that is a WHOLE other rant). If you are shopping at a business that doesn’t pay its full time workers enough to live, I am picking up a portion of your bill.
This is why I support raising the minimum wage to reflect an actual minimum living standard, so that people who work full-time do not have to be dependent on government, and the people buying goods and services from these establishments actually pay the true price for them. Doing so will not only reduce the working poor’s dependence on government and taxpayer welfare, but also increase their own buying power, expanding consumer spending and demand, which is the true source of economic expansion and job creation in this economy and all others.
Raising the minimum wage is truly the pro-business, free-market answer. If you’re not paying your employees enough to live, then you aren’t a free-market business. You are a recipient of corporate welfare provided by the American taxpayer. And welfare of any kind is something conservatives, as I understand the term, are supposed to be against.