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.

Comments (5 Responses )

  1. TCinLA - 11/30/2013 - 5:43 am #

    I well remember back in 1967 when $1.25/hour WAS a minimum living wage. One could work 30 hours/week (as I did) while working on my own on advancing my future, and be able to afford a small 1-bedroom apartment in a not-bad neighborhood here in Los Angeles, a car and its operation, a (then expensive) phone, utilities, a good diet, and even be able to go out to the movies a couple times a month.

    I don’t know where in the country today $15/hour would pay half the month’s rent on that same small apartment at the 20 hours/week most minimum-wage workers get, let alone the car, the food, the utilities, etc.

    If you want a minimum living wage in the places most people live, i.e., cities, and you define that as what I described above, then $25/hour is the figure to aim for.

    • Patrick S. Tomlinson - 11/30/2013 - 5:03 pm #

      Obviously, the true minimum wage as I’ve defined the term above will vary depending on location and cost of living. It would be higher in NYC than it would be in rural Iowa, for example. But the WA $15 per hour experiment will be very telling and give us a real-world example of the relative risks and benefits of a major increase.

      And now that you mention it, I would add a phone and internet bill to minimum standards as well. Trying to navigate the modern world without convenient access to the internet is a huge disadvantage.

  2. TCinLA - 11/30/2013 - 5:49 am #

    Oh, and BTW, if the Waltons of Wal-Mart fame reduced their riches by 1% (they are collectively worth $100 billion), they could afford a minimum wage of $25,000/year for all their employees.

    And back in 1967, when the country was working better than it is today, the top income tax had been LOWERED in the Kennedy tax-cuts all you conservatives swoon over, to 60 percent. We could afford colleges and universities like I went to, where I was not saddled with 30 years of debt upon graduation, the interstate highway system was built, and no one complained that the top guys who ran companies were only making 40 times what the average wage on the production floor of their company was, rather than the 475 times that wage that exists today. Not to mention companies were run by people who actually enjoyed what they were doing, were interested in what they were building, unlike the spawn-of-satan MBA scum we have today, and only third-raters got business school degrees. And yet we managed to win a World War with that system!

    • Patrick S. Tomlinson - 11/30/2013 - 5:06 pm #

      Yes, everything was so much better for the country back in 1967. Unless you were black, female, homosexual, or about to be drafted into the Vietnam War. Rose colored glasses, take them off and try to stick to the topic at hand.

  3. John - 11/30/2013 - 1:28 pm #

    There’s another way to balance out the minimum wage/cost of goods equation – the suits at the top could take a pay cut. They already take home more money than they could ever need in seven consecutive lifetimes. How about giving some of that back to their employees?

    Corporate management in most companies typically feel that all the “little people” doing all the grunt work – dealing with customers, solving problems, processing paperwork, filling out forms, putting stuff in boxes and on trucks – are the ones that are expendable because there are so many of them and they’re paid the least. What the suits fail to realize is that without those “little people” doing all the things they (management) deem themselves too important to do they’re sitting around with their thumbs up their asses. So in true “David vs. Goliath” fashion, the ones who are deemed the least important are actually the ones with the most power in the company.
    A man in a hot air balloon realized he was lost. He reduced altitude and spotted a woman below. He descended a bit more and shouted, “Excuse me, can you help me? I promised a friend I would meet him an hour ago, but I don’t know where I am.”

    The woman below replied, “You’re in a hot air balloon hovering approximately 30 feet above the ground. You’re between 40 and 41 degrees north latitude and between 59 and 60 degrees west longitude.”

    “You must be an engineer,” said the balloonist. “I am,” replied the woman, “How did you know?”

    “Well,” answered the balloonist, “everything you told me is, technically correct, but I’ve no idea what to make of your information, and the fact is I’m still lost. Frankly, you’ve not been much help at all. If anything, you’ve delayed my trip.”

    The woman below responded, “You must be in Management.” “I am,” replied the balloonist, “but how did you know?”

    “Well,” said the woman, “you don’t know where you are or where you’re going. You have risen to where you are due to a large quantity of hot air. You made a promise which you’ve no idea how to keep, and you expect people beneath you to solve your problems. You are in the same position you were in before started but now it’s my fault.”