Raise the Minimum Wage

I’m for a more stable society and increasing the minimum wage is key to that goal. Everyone should be able to get ahead in America by ‘working hard and playing by the rules.’

I’m a strong supporter of an increase in the minimum wage. I go into that with my eyes wide open. I understand that, according to the Congressional Budget Office, an increase in the federal minimum wage from the current $7.25 to $15.00 would get more people laid off than lifted out of poverty.

So, why do I still think it’s a good idea?

Because the minimum wage increase would do three good things.

First, it would provide a wage increase to no less than 27 million people. Most of these are workers teetering on the edge of poverty. While they might not fall under the official poverty line, they’re people living on the edge and this will give them more security. Security is a good thing as it creates a less volatile society and a more stable political environment. In my mind, that’s a moderate value.

Second, it will lift 900,000 people who currently reside below that official poverty line, above it. Now, of course, it would do that at a cost of about 1.4 million jobs for people who would now be out of work entirely. That can’t be just dismissed as many liberal economists would like. But any minimum wage increase is going to cost some jobs. If you accept this as a reason not to increase it, then that’s an argument for never increasing it. In fact, that’s an argument for abolishing a minimum wage altogether. Which leads to my most important argument.

Moderate Sen. Joe Manchin holds the key to increasing the minimum wage.

Third, it’s vital that we make all work worthwhile. I want to live in a society where it is not possible to work full time and still live in poverty. In fact, I want a society where anyone who works full time can be assured that they’ll have a decent place to live, be able to afford good health care, send their kids to quality schools and retire in comfort.

I can’t think of anything that would lead to a more stable, less angry and polarized, society than that. It makes good on Bill Clinton’s wonderfully simple formulation that, “if you work hard and play by the rules” you can earn yourself a good life in America. Right now that promise is unfulfilled for too many Americans. It’s possible to work very hard and follow every rule and still not be able to afford a decent home, health care, a college education for your kids or the promise of any retirement, ever.

And here’s the thing. I’m optimistic that this can get done. Despite the predictable setback for increasing the wage to $15 in President Biden’s Covid relief bill, we may be in the political sweet spot to get it done anyway. That’s because the two parties are passing each other right now on opposing escalators. The Republicans are on the down escalator, just now coming to grips with the reality that their base is no longer country club types but blue collar workers. Meanwhile, the Democrats are on the up escalator, coming to the realization that they are no longer the party of unions and the working class, but the party of college educated elites, who still care about the working class, albeit in the abstract.

You can see this most clearly in the Republican Party, where at least three GOP senators have proposed their own increases in the minimum wage. Mitt Romney (R-Utah) and Tom Cotton (R-Arkansas) have proposed an increase to $10 an hour, while Josh Hawley (R-Missouri) would go all the way up to $15, but only for major corporations. Just a few years ago, for any Republican to propose an increase in the wage would have been heresy.

For the Democrats’ part, $15 was never in the cards, even if the Senate parliamentarian had not done her job and ruled it out of the budget reconciliation process. That’s because Sen. Joe Manchin (D-West Virginia), the second most powerful man in America right now, opposed it. Manchin has said he could support $11.

As it stands, even with Romney, Cotton and Hawley, you’d still need another seven Republicans in the Senate to pass any increase. But what we have here are the elements of a compromise. Something between $10 and $15 an hour applied to some set of businesses is very much a live possibility.

It’s just a question of working out bipartisan compromises on the details. And that’s the moderate way.

3 thoughts on “Raise the Minimum Wage

  1. A jump in minimum wage from $7.50 to $15.00 is way too much of an increase at one time. This needs to be done in an incremental way. How about going up to $9.00 for a year or two and then increase it to $10.00 for a year or two and then up to $11.00? I think an incremental path will increase the purchasing power of those making at or close to minimum wage and might spur some spending growth without negatively affecting the job market and consumer prices too badly. Remember, for every $1.00 of increase in wages a full time minimum wage person is going to gross $2080 more per year, multiply that times the number of hourly employees all getting an equivalent increase in hourly wage in the company. Going from $7.50 to $15.00 per hour for a full time hourly employee is a gross increase $15,600.00/year, if you have 20 full-time hourly employees that’s an increase to the cost of doing business of $312,000.00/year and that’s not a small chuck of change for any small business; you can expect a huge chunk of that cost to be passed on to their customers.

    There are unintended consequences to large jumps in minimum wage.

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      1. Dave wrote, ” Actually the proposal was to increase it gradually over four years.”

        I didn’t see that in your post and I just now noticed that there was a link to the actual document from the Congressional Budget Office.

        I think their proposal (photo above) of a “gradual” increase found on page 15 of that document is too fast and going all the way to $15/hour I think is too much. That’s a 100% increase in 5 years, that’s too much! Also I think their “Employment would be reduced by 1.4 million workers, or 0.9 percent, according to CBO’s average estimate; and the number of people in poverty would be reduced by 0.9 million” stated on page two of the document is one of those let’s throw this against the wall and see what sticks pie-in-the-sky estimate and if the cost of living goes up really quick as a result of this rapid increase, and that is a possibility, their estimate is a joke and the poverty line just increases. If the cost of living goes up rapidly due to a rapidly increasing minimum wage then these people could financially end up right back where they started or worse if they cannot find any job because the workforce requirements in the USA has been reduced.

        NOTE: the background color you are using for your blog posts and the color assigned to links are close enough to the same color hue that the background has a tendency of camouflaging the link a bit. There’s not enough contrast between the colors. This comes from someone that’s programmed websites for almost 30 years.

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