The national minimum wage is currently $7.25 an hour. Back in 1968, it was $10.77 in today’s dollars. So President Obama’s proposal to raise the minimum to $10.10 is hardly radical.
Many states exceed the federal standard — with Washington’s wage the highest, at $9.32 an hour. Last year, voters in the small city of SeaTac, home to the Seattle-Tacoma International Airport, went a big step further, raising its minimum wage to an unprecedented $15.
All eyes are now on SeaTac. Will the $15 minimum floor, now in its second month, lead to a wave of layoffs and business failures as its foes predict? So far, there’s scant evidence of that, according to The Seattle Times. One hotel did close its full-service restaurant, but another is adding rooms and a day spa.
Some SeaTac businesses have increased prices to cover the wage hikes. Yawn. Folks flying to Honolulu or London can surely afford 10 cents more for their burger.
Many insist that raising the minimum hurts consumers through higher prices. They may not be wrong, but consider the class implications of that argument. If the CEO were paid a few million less, consumers would benefit. No one ever says that.
Another bizarre talking point has been making the rounds — that most earners of the minimum wage aren’t poor so raising it wouldn’t cure poverty.
“Only 11 percent of the workers affected by such an increase come from poor households,” David Brooks writes in The New York Times. “Nearly two-thirds of such workers are the second or third earners living in households at twice the poverty line or above.”
That may be so, but the minimum wage is not only for the impoverished. It’s also for the struggling middle class, including those earning somewhat more but affected by the minimum. By the way, living at twice the poverty line, or $47,100 for a family of four, is not easy, especially in expensive parts of the country.
Now imagine a lawyer being told by her firm, “Hey, you’re married to another lawyer, so you don’t need to make $70,000.” (That’s the average beginning lawyer’s salary and three times the poverty line for a family of four.)
Note how those making the lowest amounts are also scrutinized for what they intend to do with their money. Oh, they’re only high-school kids saving for a car, we hear. First off, how they plan to spend it is nobody’s business. Secondly, would anyone base a lawyer’s pay on whether she’s earmarking it for a child’s education or handbags?
Higher wages can be good for business. Because Oregon has a minimum wage well above that of neighboring Idaho, employers in the eastern part of the former are deluged with job seekers willing to drive across the border for a better deal.
Businesses in SeaTac report a surge in applicants attracted by the $15-an-hour wage floor. Employers now have their pick of the most motivated workers.
A higher minimum helps the economy by putting more money into low-income pockets. It also lifts many out of the poverty programs, such as food stamps.
Obviously, setting the minimum wage is a balancing act, and a too high level would do more harm than good. But experience shows that moderate increases have had little effect on employment.
Finally, let’s be mindful that a minimum wage is about more than keeping the poor from starving. It’s also about attaching dignity to a person’s labor.
Froma Harrop is a columnist for The Providence Journal.