How I Learned about the Minimum Wage

By Ashley Herzog

I was seventeen years old when I wrote a school essay entitled “The correct minimum wage: $0.00.” Back then, I was a budding libertarian, and I was proud of that assignment. I explained my opposition to a government-mandated minimum wage with arguments that many economic conservatives consider hard fact: Minimum wage increases lead to unemployment. They force business owners to pay unskilled laborers more than they’re worth. And besides teens and secondary-wage earners, who really works for the bare minimum, anyway?

The partisan battle over minimum-wage laws was the last thing on my mind when I took a job in a chain restaurant last June. I’d held a few after-school jobs as a teen, but the restaurant job was meant to be my first serious foray into the working world.

I liked my job immediately, especially my co-workers: some were single moms, some were students, and others were second-wage earners, supplementing a spouse’s meager income.

At first, our conversations were limited to the usual small talk about movies, celebrities, and workplace gossip. But as the weeks wore on, I was able to piece together the stories of my new friends’ lives. Although each one was unique, they had a common theme: money was a problem.

They used code words to describe money troubles and the public assistance they needed to circumvent them. When I overheard one waitress talking about her “financial aid,” I asked where she went to college. She reluctantly admitted that “financial aid” was a euphemism for food stamps -- and she’d needed them ever since her husband lost his job.

Relying on food stamps isn’t a worst-case scenario in the world of low-wage work. Another young waitress confessed that she was living in a motel because she couldn’t make the last month’s rent. After swearing me to secrecy, she resolved to find a new apartment within a week -- as long as she could afford the security deposit.

Needless to say, my view of laissez-faire capitalism was shaken. Libertarian philosophy promised that an unbridled free market would provide everything people needed, as long as they worked hard enough. So how could it be that people working two or three jobs, averaging seven to eight dollars an hour, could barely afford necessities like food and housing?

When I asked a co-worker if she had health insurance, she looked at me as if I were crazy. It was then that I uttered the words I never thought I’d say: “Well, maybe they should raise the minimum wage.”

But like many others, she doubted that “they” were really concerned about her. She told me she refused to vote for Democrats or Republicans, “Because what do those assholes know about being poor?”

A few weeks later, I quit that job and returned to college, where I’m again shielded from the realities of low-wage life. I sit in classes where middle-class students and tenured professors debate the minimum wage in theoretical terms. Sometimes I think back to the question my co-worker posed: “What do they know about being poor?”

The answer, for many of us, is not much. The working poor are relatively easy to ignore. They aren’t interviewed on nightly newscasts. They don’t write op-eds for The New York Times. In many cases, they don’t even vote. People who work for wages just above the minimum typically fly under society’s radar -- until financial disaster strikes and they turn to government programs for help. It is then that they are chastised for their lack of self-reliance and initiative.

Maybe in some cases a low-wage job is the first step out of poverty. Of course, most people who have time to philosophize about the minimum wage will never find out for themselves.

Comments

[Different]

It's a well known fact that corporate employers STEAL 90% of low wage workers production. They are THEIVES, PESKY, FILTHY, LAZY, USELESS. ARISTOCRATIC, WELFARE THEIVES!

Some capitalism eh? People making millions off "passive income" and through no work at all, using the bodies of others as whores and cogs.

All hail The United Soviets of America! We're we are all equally poor, no matter how hard we work, if we never become members of the "honors, *cough* Stalin* society!" Operation Iron Curtain, it's a sucess, we're all one big happy conglomerate!

F*** you Libertarian commies!

[mkfreeberg]

Not sure I follow. We're supposed to raise the minimum wage as a solution to...what? People being poor and not having health insurance? Because if those are the problems we're trying to solve, a buck or two an hour is inadequate.

Adjust for inflation, and you see over the long haul we haven't been raising the minimum wage. Not really. This, I contend, is the only reason we are allowed to argue about whether it eliminates jobs or not. If we were to raise it for real, we'd make it more expensive, in real dollars, to get people hired.

And then we wouldn't have to "philosophize" about anything. It wouldn't be a matter of opinion or discussion any longer. We'd know for sure. Make labor more expensive, people get fired...or, not hired.

It seems a solid argument, and I wish someone would challenge it. But all I ever hear to the contrary is something about how being poor isn't any fun. Well, yeah. It's probably a lot less fun when ten people have to compete for one job, instead of for five, because Congress has chosen to make it more expensive to hire people.

[Barbara E]

To MK: The federal minimum wage was raised substantially in 1997, and the economy boomed (not that there was probably a cause-and-effect relationship.) Also, 24 (by my count) states have raised their min wages in the last few years, with no deleterious effects.

[lc2]

Barbara: I'm also mystified as to why so many people rally to the defense of min. wage employers, when the employers themselves barely muster a perfunctory grumbling.

And the idea that a buck or two an hour doesn't make a difference for poor people? We're not talking about the prospect of moving to the tree-lined suburbs here, but about the difference between eviction or utilities shut-off or not.

Of course, it would take commentators who are years removed from paycheck-to-paycheck living, let alone poverty, to try to persuade min. or very low-wage earners that it's really not in their best interest to make more money. Would they be as quick to convince a middle-class compatriot that an extra $5K/yr for the same amount of work will only put them into a higher tax bracket, or a billionaire that s/he doesn't really need that extra $200K that went to the IRS pre-BushII?

I say this btw as someone who has several small business owners in the immediate and extended family, and I want to see them all succeed. They all employ min. wage earners (one almost exclusively), and I don't hear them talking about downsizing b'c of an impending min. wage hike. As I noted in another thread on this topic, if a business's profit margin is that paper-thin, it has bigger problems than a payroll increase.

We've maybe reached a bizarre moment in labor unawareness in the U.S., when employers of the most disenfranchised workers among us are depicted as victims of gov't regulation. It sort of reminds me of how Bush must've felt when he heard that the majority of Americans (or at least Fox viewers) believed that Sadaam Hussein engineered the 9/11 hijackings. Did he shrug and say, "Well, OK, not what we said, but we'll take it!"? Does the corner convenience store owner hear that the public is pleading his case (never made) for lower wages, and think the same thing?

[mkfreeberg]

Barbara, if I can summarize your comments a different way, you're essentially agreeing with me. The increase you cite was 40 cents an hour from $4.75 to $5.15, 90 cents higher than it was in 1995 and $1.35 higher than in 1990.

If there's no deleterious effect, then why couldn't we have gone with $5.15 in 1990? Looking back over the history of the fed. minimum wage, it looks like, well, what I think it really is: An effort to keep pace with inflation, so that the cause-and-effect is carefully concealed. That would answer my question. No other possible answer, that I know of, seems to.

Some people who are in favor of raising the minimum wage, say we should do it because it's barely keeping pace with inflation. Others say we should shrug off arguments against raising it, because it has no effect on unemployment. It isn't logical to embrace both of those arguments; if it's barely keeping pace with inflation, it's not really making labor more expensive in the long run, but it still might be a bad idea.

[mkfreeberg]

lc2, maybe what's happening here is you're arguing about the injury that's being dealt out to certain classes of people, and I'm arguing cause-and-effect. You have business owners in your family who employ minimum-wage people, and you say they aren't hurting. Should they have an opening for some new employees, and they'll have to take on six when they had originally planned for ten, are you gonna know? No, you won't. What about the four applicants who are sent home, who otherwise would have been hired? They won't know either.

It's a numbers game. That isn't my opinion; that is simply what it is. Minimum wage is $5.15, you raise it to $7, all you're doing is outlawing jobs that pay between 5.15 and 6.99. Those jobs are now against the law; that is all that has taken place. No money "found" to pay the difference, just a job that is made into a violation of the law, with the stroke of a pen.

You imply that it's a swell idea and it wouldn't hurt the business. If it's like that, we wouldn't need a law -- the business would pay it. Perhaps they choose not to, so that they can hire enough people to get the job done without turning the place into a sweat shop.

Who's to say what reality is? Probably not a bunch of limousine liberals in Congress...whom, overall, I notice are pretty far removed from making $5 an hour as well.

[Tommy T. Payne]

That's an awesome short essay, Ashley, lucidly reasoned. Your story pulled me though to the end.

You remind me of my personal history, which I'm gusseing has a few more years to it than yours. When I was a junior in high school, I considered myself a Barry Goldwater conservative. His stand for "states rights" made since to me since ours is a federal system, and the more local the government, the more easily citizens can influence it. Naif that I was, I didn't realize that "states rights" was a code word for permitting southern states to retain their system of institutionalized discrimination against blacks, the infamous Jim Crow laws.

I also remember arguing in class with my high school debate teacher, Mr. Lagnese, that "we" should "take off the gloves" in the war against North Viet Nam. Mr. Lagnese tactfully replied that if you want decisive victory you must deliver a "knock-out punch to your opponent." He didn't state it, but this would imply dropping "the big one" on Hanoi. Not a good idea. A year later a friend pointed out that the U.S. in Viet Nam was not protecting itself, but intervening in a civil war. (Even this understates, the case, since the U.S. in effect was actually continuing an invasion process begun by the French.)

All this launched me on a long process of re-thinking until today I'm a libertarian socialist (anarchist), which has elements in common with Goldwater but is quite a bit different.

I think we should call for a "20/20" labor law: 20$/hr. minimum wage, 20 hour work week, with provision for automatic adjustment for inflation

[Tommy T. Payne]

mkfreeberg, I wish I had time to respond to all your fallacies, but let's start with this one:

You think the 90s increases in minimum wage are "really...an effort to keep pace with inflation." If that were so, Congress would long ago have included automatic indexing, similar to social security, to keep pace with inflation. The 90s increases were in fact an effort to catch up with erosion of the min wage from inflation, and they didn't really do it.

You seem to ignore that the laws Congress passes result from highly-charged political process, not reasoned deliberation.

[Suzanne Lanoue]

Good essay!

I was never a conservative like you, but I was fairly a-political when I was young. After having many bad, low-paying jobs while trying to work and go to school at the same time, and having read some history about big companies like Ford, it became pretty obvious that most business people (owners of large and small companies alike) only care about themselves, their families, and their profits - not their employees, nor their customers.

And after having visiting Europe, it is obvious that unions are the only solution...yet for some reason, this country has destroyed their unions (with some big help from Reagan and others) and isn't interested in fixing that problem.

It seems like everyone is too greedy and selfish. I don't understand why they don't see that in the long run, it's better for their businesses if they treat employees better by giving them good wages and benefits (at the very least, it keeps them from having such a high rate of turnover and keeps their employees loyal). Some companies have proved that it is possible to do this and succeed, so I don't know why the other companies have not figured that out, and why the government (at least under Clinton) hasn't forced them to do so.

And why doesn't the working class vote for change or rise up against these people? Why would they re-elect Bush when he only cares about his rich cronies?

Maybe people do get what they deserve...

FYI, I have my own home-based business and it is now somewhat profitable, but rather than keep the profits, I divide it up among my 80+ volunteers (many of whom are stay-at-home mothers, disabled, or just unemployed. I can't afford yet to actually hire more than, say, one person, and it doesn't seem right to employ one person or pay myself when all these other people contribute, so I share and divide equally....it's my small part! :)

Suzanne Lanoue
The TV MegaSite, Inc.
http://tvmegasite.net

[Jeff Booth]

Having to work a real job is a good cure for "Libertarianism". But I think even a Trust Fund Baby might want to re-think libertarian philosophy in the wake of Katrina. Would any corporation be willing and able, at a moments notice, to provide a massive rescue (and later re-building) operation without being sure of profit? Of course not. For anyone with half a brain and/or an ounce of compassion; Katrina killed and buried Libertarianism.

[barbsright]

Jeff, your use of Katrina as an argument to rethink libertarianism, is ironic, to say the least( it gave me a chuckle-thanks for the laugh.). The only reason that New Orleans exists is because US taxpayers subsidize flood control projects there. This is both fiscally, and environmentally, foolish. And, in the case of Katrina, deadly.

[Shannon]

Oh, Ashley. Let me begin by telling you that my husband has neither his high school diploma nor a GED and, at 21 years old, he is making several dollars an hour above minimum wage. Several of our friends with the same amount of education are making even more than he. I got my first job as a cashier in a small family-owned store when I was 17, and made minimum wage for two months before getting a raise. My husband provides the only income for our family of four and we have never needed food stamps or any other social service. Have my family and friends just been unusually lucky? It's unlikely. What is likely is that there are some very big differences between the choices the women you met in that restaurant made and the ones we make. For example, were these women smokers? Did they cut coupons and purchase sale items? Were their heaters set to 60 degrees or 80? Did they drive or take the bus? Did they get their nails done? These things may seem trivial, but they make the difference between having enough for rent and living in a motel.

Let's examine their having such a low-paying job to begin with. I do not live in a large city with hundreds of entry-level jobs to choose from; on the contrary, it is pretty much an economic wasteland. I have managed to hold several jobs without ever having to revert to the low pay of my first few checks. Like the market, there is an element of supply and demand in employment. Unfortunately for picky, lazy and inexperienced employees, it works both ways. I can understand a high school student's making minimum wage, but how does someone who is old enough to be his or her family's primary provider manage to avoid developing any marketable skill or experience?

According to the government's definition, my family lives well below poverty. I am a stay-at-home mother of two young children and have never felt impoverished.
I have little sympathy for anyone who claims they do, and even less understanding of people who think that giving someone more money will teach him better spending habits. My husband and I have all the strikes against us that folks with your economic understanding use to support maintaining and raising minimum wage: My husband has a 10th-grade education and I am finally returning to community college; my husband had open heart surgery at 19 and suffers several minor strokes each year; I am a convicted felon (though admittedly, I was never incarcerated); we are young parents with a single income.

You should have listened to your inner Libertarian before your naivety got the best of you.

[clemesj]

I live in Ontario, Canada and let me illustrate a point.

About ten years ago the welfare rate was cut by about 20% cutting the ability of these people to buy goods and services by 20% which would have the same effect of a lowered minimum wage.

Great because these bums should get off their asses and work, right? Fine. Two investigations of the labor market showed that for every job available there were three people. A lot of the people who might have been employed were mentally incapable of holding a job and had been thrown onto the street when the government closed facilities in which they were kept. Oh, and what happened to the people who had been paid to look after them? RIGHT!! Unemployment, then welfare. Reduced welfare = reduced buying power.

On a radio show from Hamilton a restaurant owner called and said that he didn't know who the premier, Mike Harris, thought he was helping but it wasn't him. Seems that a lot of the people who used to come into his restaurant every so often were welfare recipients. With less money they could no longer afford it. One result was that the owner had to lay off at least one waitress. Unemployment then reduced welfare = reduced buying power and welfare recipients pay no taxes.

Now follow. Reduced money = reduced spending = reduced revenue for businesses that depend on that spending = layoffs and/or bankruptcies = more people with less money = .... Is anyone getting the picture yet?

Pick up a book on basic economics and investigate the topic of creating wealth via the multiplier effect. Then tell me about minimum wage.

[Laura]

To Shannon,

I assume you and your husband are white. If so, do you think employers would be waiting with open arms to hire a black person with a 10th grade education and health problems or a black person who is a convicted felon? Studies have shown time and time again that employers will hire a white person with limited education and/or a criminal history over an educated black person with no criminal background. It's not as simple as people just being "lazy" or "picky". My black husband, with 11 years of experience in building maintenance, and no criminal record was laid-off from his job last August with a week's notice. He was out of work for nearly 8 months, despite applying and interviewing for countless jobs (all of which he was qualified for), and doing very well in the interviews. He finally got a job through a temp agency, but at a $7,300 a year pay cut. Meanwhile, a white male friend of his, with equivalent education and experience in the same field (building maintenance) was job hunting, and found a management job within a month making $20 an hour. Prior to this, my husband and this friend worked at another company together, were hired a week apart doing the same job, and his friend was hired at $2 more an hour than my husband, and has told my husband that he doesn't know anything more about building maintenance than my husband does. Also, this company did a credit check and criminal background check on my husband, but DID NOT do a reference check on his friend, while my husband has NO criminal record, while his friend has been convicted in the past for assault. Having the "right" color skin makes a huge difference in the working world.

[paynenp]

Ashley,
Would you be willing to share your monthly budget? It's really impressive that your family is able to live so comfortably off a salary just over minimum wage (and even afford college for you - that's great!). Budgeting is a skill and it sounds like you are quite good at it. I work with many poor families who are struggling to make it at minimum wage (I'm a nurse practitioner in a university hospital system). In particular, could you share your family's take-home monthly salary, then what is needed for rent/mortgage, utilities, food, and health insurance for a family of four? I realize your husband makes a little more than minimum wage, but still your example might prove very useful for others. (and also might argue for the importance of those few extra dollars above and beyond minimum wage, although perhaps you are saving those extra dollars, or putting them toward your college expenses).

[paynenp]

Sorry, Shannon,
The message I just posted to "Ashley" was meant to go to you.

[Walter Dufresne]

Just a short note to point out that many colleges aren't panaceas, filled with students who get good financial support in their endeavors, filled with well-paid teachers having job security. If anything, such panaceas are now a distinct minority in the USA.

[travesti]

thank you