The minimum wage debate has been going on for some time now, the issue being whether it's good public policy to raise the minimum employers can pay per hour for work performed. Proponents specify $10.10 as an appropriate minimum. They argue that it's improper, even immoral to pay such low wages to unskilled workers, most of whom are adults, many trying to support families, often having to supplement their wages with public assistance. This is mostly in the form of food assistance. Thus, tax payers are supplementing the employers who pay low wages, incidentally giving them a competitive advantage over businesses that do the right thing.
Opponents of raising the minimum wage contend that if employers are obliged to pay more in wages they will lay off some of their employees, effectively killing jobs. They also argue that the market will supply a remedy for low wages as unemployment drops and employees are in a better position to bargain for more money. Finally, they cite the alleged loss of freedom associated with being under government compulsion to pay higher wages. Some people don't confine themselves to arguing against raising the minimum, claiming it would be good to lower it or eliminate it altogether.
Everyone has an opinion, it seems, so here's mine. I'm for raising the minimum wage for all American working people. Ten dollars and ten cents seems reasonable to me, though I don't quite know how that came to be the target. Notice I said ALL working people, including people who are not covered by current minimum wage legislation. My daughter-in-law waits tables, and by golly she deserves a steady wage so she doesn't have to worry about being stiffed by miserly diners.
The argument that raising the minimum wage kills jobs has just enough truth to convince those who want to be convinced. In other words, yes, a high minimum wage would make it more attractive for an employer to replace human workers with machines. But $10.10 per hour is not high enough to tempt very many employers. Arguing that such a small wage increase would cause more unemployment is specious. It suggests that employers are keeping excessive employees on as some sort of charitable project. We know that isn't so. Employers hire enough people to do the work they must have done, and no more. If they must pay more, they will cover the added expense in one or more of three ways - find some other way to lower expenses, raise prices, or (horrors!) accept a lower profit margin.
Lowering other expenses might, as already mentioned, include buying labor-saving machines. More likely, though, it involves finding more efficient ways to reduce costs - better climate control, reducing paperwork, better targeted advertising and so forth. Business owners who choose to raise prices hope no one notices, or that their products and services are in such demand that the public will be willing to pay more for them.
Finally, there is the matter of the businessperson's profits. Let me just say that in a private enterprise economy the profit margin should be razor thin. The entrepreneur should live in constant dread that some competitor will think of a way to make a better product, or as good a product at a lower price.
Let me tell you a little story. My first job was as a bagger at a Publix supermarket in Miami Florida (on Miller Road if you really want to know). It was 1965, I was sixteen, and my minimum wage salary was $1.15 per hour. We baggers were told not to double bag the large paper grocery sacks (no plastic back then) because they cost Publix two and one-half cents each. If we were asked to double bag, we should use the smaller bags that only cost a penny. The Publix supermarket chain realized a profit of two cents for every dollar spent there, so double bagging with the large sacks wiped out the profit from a whole lot of groceries going out the door.
That's what I mean by a small profit margin, but Publix was, and is, a successful company. Would they have done without some of us if they had to pay us more - say $1.50? It would have resulted in longer lines, and dissatisfied customers. I'll grant you that most grocery stores now have self-check lanes for people making only a few purchases, but more machinery is almost a given in our twenty-first century world. (They also have scanners now, whereas half a century ago the checker had to ring up each item on a manual cash register. For that matter, most purchases are made with credit or debit cards now. When I was a boy, purchases were made by cash or check, and a check had to be approved by the manager, who had to be summoned and who had to okay the check while other customers waited in line.)
So what is the debate really all about? It's about profit, of course, maximizing profit versus paying a living wage to people who often are not very upwardly mobile. By the way, the argument that a low minimum wage acts as a spur to the working person to improve his or her skills to gain a better job doesn't seem to be justified from a statistical standpoint. Many people are, for want of a better word, trapped with the skill set they acquired in their younger years.
So raise the minimum wage. If Congress is too deluded or too churlish to raise the minimum generally, at the very least, make the minimum the same for wait persons as it is for everyone else. Give my daughter-in-law a break!
