Fair Pay

I believe I have expressed my opinion on this subject before, so I will summarize:  Any job that cannot pay enough for employees to live off of is not worth doing.

Minimum wage is starting to become a big deal again, as Obama pushes to have it raised by around 33%.  Fast food employees have started a movement to have minimum wage, at least for fast food jobs, raised by almost 100%.  Current minimum wage is almost half the poverty level (70% according to the government definition, but according to actual accurate data it is less than 50%).  If minimum wage is supposed to provide enough to live on, why has it not been raised sooner?

The Republican Party is largely to blame, along with many large businesses.  The claim is that raising minimum wage will put more people out of work.  This is probably true.  So, I guess they think it is better to let most of the population starve than to make businesses pay fair wages and have less workers but with fair pay.  Really, this is an unsolvable problem from this point of view.  I have already shown how a basic income would solve this problem, so I am not going to harp on that, but I would like to discuss how some large businesses are actually trying to do something about this problem.

I just read this article.  It discusses how some businesses are voluntarily raising their minimum wage.  (I would like to point out how absolutely disgusting it is that self interested businesses have recognized this problem before our government, which is supposed to be paying attention to our needs.)  Ikea recently announced an internal minimum wage of $10.76 an hour (to be implemented soon).  Gap is raising their minimum to $9.00 an hour and already has plans for increasing it to $10.00 an hour in the near future.  Costco already pays a minimum of $11.50 an hour, but the article says that bonuses bring it up to an average of $21 an hour.  Whole Foods also pays $10.00 minimum (with an average of almost twice that).  The last two mentioned in the article are fast food places.  Shake Shack and In-N-Out pay a minimum of $10.00 and $10.50 an hour respectively, with In-N-Out also providing vacation and retirement benefits.

None of these companies are doing poorly.  Costco says the higher wages pay off in productivity and lower employee turnover, and compared to Sam's Club, which does not pay fair wages, the evidence supports that claim (also note that Costco still manages to charge very low prices despite paying their employees around twice what Sam's does).  As far as claims that raising minimum wage will hurt businesses go, the evidence seems to prove the exact opposite.

It is probable that raising minimum wage will make unemployment worse.  This is a natural effect of the law of supply and demand.  When supply and demand are not a matter of life and death, it might be ethical to consider their impact before raising the cost of such an essential commodity as labor.  When it is a matter of life and death, it is not ethical to consider the problem entirely from an economic point of view.  Minimum wage is exactly one of these life and death cases.  Due to a number of different factors, our economy is incapable of providing enough work for everyone who wants it, and the consequence is that the U.S. is slowly sinking into widespread poverty.  There are many solutions to this problem, but they all require more than just changing minimum wage.  Businesses should be required by law to pay fair wages, and a minimum wage that pays $15,000 a year is not fair wages.  We need a minimum wage that pays more than the poverty level to have a sustainable economy.  Raising minimum wage should not even be a question, and if our government cannot see that, then they are not qualified to rule anything, especially not a large country.  Bickering about minimum wage and unemployment is a waste of time.  Once minimum wage is taken care of, we can start looking at other options to take care of the larger problem.  So long as people are relying on minimum wage as their primary form of support though, businesses and the government are morally obligated to make sure it is high enough to provide sufficient support.

I have multiple suggestions to solve the worst of our economic problems, and a basic income is at the top of that list (a basic income would also obviate the need for any minimum wage).  A wage cap would help take care of the supply and demand problem inherent in a minimum wage.  Even a more robust welfare system would help, though it would cost far more than it is worth, with the current needs based system.  Ultimately, we really are living in an unsustainable economy.  It is impossible for a business to survive when it pays less for its resources than they cost to produce.  Minimum wage was designed to solve that problem for labor.  It currently does a very poor job.