Poor
Glenn Reynolds has linked to Econopundit’s review of Morgan Spurlock’s new show. The first episode of the show, titled 30 Days, develops a concept very similar to the one being sold in Barbara Ehrenreich’s book Nickel and Dimed. Basically, Spurlock and his fiancee try to survive on minimum wage for a month, and this quest for survival is supposed to lead the proletariat to revolt against the pitiful $5.15 minimum wage imposed by the bourgeoisie conservatives. Aside from the holes identified by Econopundit, the story ignores the fact that the overwhelming majority of families in the US are not living on minimum wage. According to the Employment Policies Institute only 15% of the total number of workers who could benefit from an increase in the minimum wage are single earners with children. A show focusing on 16-24 year-olds making minimum wage would be more compelling.
According to the Labor Department’s 2004 “Characteristics of Minimum Wage Workers,” approximately 59% of the working population in the US is paid at hourly rates. Of those, only 2.7% make minimum wage or less. Only 1.7% of hourly workers over 25 are paid minimum wage. Notice that the number of workers making at or below minimum wage is significantly smaller than it was just 10 years ago. Moreover, an overwhelming number of those considered to be “poor” in the US will move out of that category within one year. (In case anyone was wondering, approximately 6.5% of the French population cannot afford to purchase all the necessary resources required for living.)
I don’t mean to minimize the challenges faced by families who are living on minimum wage–having lived in Central America and rural Missouri, I’m familiar with the struggle. But I do mean to minimize the extent to which we are facing a crisis caused by the current minimum wage. The economic benefits of legislatively increasing the minimum wage are met, if not outweighed, by the negative consequences to the employment rate and potential increase in percentage of persons’ making minimum wage.
Rather than enact legislation that significantly alters the economic landscape in the US (i.e. job killing wage hikes), I’d rather see legislators create incentives for those workers who make low wages, rather than disincentives for workers (and employers) who make higher wages. Not to sound like a broken record or anything but, with few exceptions, there seems to be a strong correlation between economic freedom and the wealth required to keep a high percentage of folks above minimum wage and a low percentage of folks unemployed.
Spurlock should move his show to one of these countries.
8 Responses to “Poor”
If so few people are making minimum wage, then an increase in the minimum wage shouldn’t “significantly alter the economic landscape in the U.S.”
Doug, I believe you’re misreading. Very few people depend on the minimum wage to feed a family. Lots of people make minimum wage, but they happen to be teenagers whose parents are usually paying for their food, shelter, medical care, and so forth.
And more importantly, lots of people depend on paying their employees minimum wage. Teens getting laid off is only kind of bad; companies being less productive is worse.
How about a minimum wage increase for individuals over 18 years old? Gets rid of the teen-component of the equation.
Yikes, Doug, think about the wacky incentives that would give to employers! I don’t think the economic case against the MW works, either, but it’s still a basically sound idea that you have to attend to the implications of policy, especially on the choices that will be made on individual firms and consumers.
jonathan, did you watch the program in question? while their goal was to work at minimum wage, the jobs that spurlock actually got paid higher than minimum wage: his first job started at $7/hr and he later gets a higher-paying job doing landscaping. yet they still have trouble paying their bills, and their budget is eventually destroyed by health care costs.
even the econopundit post mentions this pretty clearly. in light of this, i really don’t see how your comments about what percentage of workers make minimum wage have any bearing on the conclusion made by the program, that it is difficult to support yourself even making significantly above minimum wage.
So, those 15% of people who do rely on the minimum wage are just screwed as far as the Republicans are concerned.
Might I suggest reading the New Testement?
In reaction to bonddad’s comment I read the New Testament–all of it . . . at once. I realized that it doesn’t say much about the US, minimum wage, raising the minimum wage, or much at all about the government’s role in accommodating folks who make minimum wage. But it says a whole lot about private individuals, particularly followers of Christ, and their obligation to accommodate the needy. So, you must be arguing that the charge to followers of Christ is imputed to the US government? Your logic appears similar to that used by many Evangelicals who argue that they are charged, by Scripture, with prohibiting stem-cell research and abortion. This is not to say that I disagree, but is that where you are going?
My initial post made it clear that I believe the government can provide incentives for individuals who make minimum wage–Earned Income Tax Credit, or Child Tax Credit, for example. There are several ways the government can more easily help the needy–including education vouchers and Charitable Choice–which, sadly, face considerable opposition from “progressives” (despite their technically progressive nature).
If your goal is to improve the condition of the 15%–and to keep that number closer to 15% than 30%–then it would be a sloppy reading of the New Testament to suggest that counterproductive measures should be implemented just because they sound quixotic. (I’d rather not use this logic: Jesus says “whatsoever you do unto the least of these . . . .” Therefore, anything that facially appears to be geared toward helping the least of these must genuinely be helping the least of these. I mean, it is called the “Poverty Sucks Act of 2005.”)
If I felt like my economic/political worldview was tantamount to God’s, I’d argue that the detrimental consequences of raising the minimum wage should compel you to read the New Testament until you agree with the Republican Party. But I’m pretty sure it’s not, and I’m pretty sure that is unnecessary. So, for now, I’ll assume your interpretation of the New Testament makes you certain to be correct and leave it at that.