Friday, August 8, 2014

Why Should I Subsidize Your Hamburger?

The debate on minimum wage sadly is not occurring in the highest levels of government. Conservatives have so conveniently steered the conversation to side issues that it is hardly thought of anymore. And for a country where the effects of recession have all but wiped out the household savings of most families, and where even professionals have had to accept jobs at substantial reductions from their previous job levels, it has never been more relevant.

In fact, as a middle aged worker, I can honestly say that in three decades in the workforce, I have never seen a time when the average family has less money.

The push of many conservatives, even those without a lot of money, has been to oppose increases in wages on the premise that it hurts middle income workers by increasing the cost of goods and services. And certainly it does have an effect, but not as much as people tend to think. There is not a dollar to dollar correlation; in fact because labor costs are usually set below 20% of the gross at service industry businesses (the 20% is a figure lifted from a major fast food chain), even a doubling of wages should only increase prices about 20% or so.

It also bears mentioning that the wages of middle income workers will increase with the rise in minimum wage. Businesses aren't likely to keep paying $30,000 a year for network engineers when that is the minimum wage. And yet, currently, I know many network engineers with degrees who barely make that. Which is disturbing, because that's about what I made 20 years ago as an unskilled, nonunion factory worker.

But the argument that is being overlooked is that in suppressing the price of minimum wage workers, we are effectively subsidizing your burger. As the GOP uses the "hamburger" argument (arguing that you'd have to pay $15 for a burger if you increased the minimum wage to the suggested $15 an hour), essentially they are saying that we should suppress the wages of the poor in order to keep the prices of goods and services low for the middle class. This is a faulty argument, and a cruel one.

We have created a world where it is impossible to survive on minimum wage. Not difficult; impossible. It is not a living wage by any stretch of the imagination. And while the good news is that a decreasing percentage of Americans are making minimum wage, the bad news is that an increasing number of Americans are making less than $15 an hour, as post recession jobs have focused heavily on suppressing wages.

So how do low income families make it? Simple answer: subsidies. The only way they can survive is by accepting subsidies that keep their families' heads above water. In fact, the numbers are interesting: 28% of Americans make less than $15 an hour; 20% of Americans receive SNAP (more popularly called by it's old name of "food stamps". This means that by denying an increase in benefits, taxpayers are effectively working to subsidize the hamburgers of the middle class. Ironically enough, burgers that the workers who make them increasingly cannot afford (most "value meals" hover in the $6-8 an hour range, meaning a minimum wage worker would need to sacrifice an hour's pay to eat their own product. And here Henry Ford was worried about workers being able to afford to own CARS!)

Anyone who has gone to the grocery store recently is aware that costs of food, even staples, has increased at an alarming rate. Pinto beans, for instance, have nearly tripled in price over the last 10 years. As those prices increase, families who are struggling have to stretch and make sacrifices, which usually means eliminating the quality foods from their diet. And while the ACA thankfully covers most of those workers, it can only cover the cost of the consequence from those poor diets; it can't provide food to keep that from happening.

So it's time to think with a conscience. It's time to recognize the workers and give dignity to their jobs. Because people who work for a living, even at low skill jobs, are not a drain on the economy; they are DRIVERS of the economy. All work has worth, and all workers should have dignity. And if you pay them a fair wage, they will spend more, and our economy will grow, not shrink.

Dollars do not exist in limited amounts. Ironically, conservatives chide the poor by stating that the economy is not a "zero sum game" (in other words, my success need not depend on your failure). Yet they continue to suppress wages as the value of the dollar declines as if it were a zero sum game. It's time for that to stop. It's time to recognize the value of their workforce and pay a living wage.

It's time to stop subsidizing the cost of your hamburger.

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