When did the United States of America stop being the land of opportunity and become the land where something for nothing is guaranteed?
This point should be at the forefront of the recurring debate on increasing the national minimum wage.
Those who want the minimum wage increased say it helps poor people keep up with inflation and prevents them from sinking further into poverty and despair. It was first enacted, they point out, to prevent worker exploitation by unscrupulous employers using what amounted to slave labor.
Those who oppose it say it just increases the cost of doing business and eventually will cost jobs on the very end of the labor spectrum that it is intended to help because the increased cost of doing business will force employers to discharge some of their work force.
The minimum wage concept has been part of the United States labor scene only since 1933 when President Franklin Roosevelt pushed it through Congress as part of the Great Depression-Era National Recovery Act. That first measure was short lived because the Supreme Court ruled it was unconstitutional.
But it came back again in 1938, both times at $.25 per hour, and has been with us ever since. In the Clinton presidency the law was changed to allow states to set their own minimum wage higher than the federal level, and so far about a quarter of the states have done so.
I can live with the concept of ensuring that entry level workers aren't exploited. But I have a problem with the concept that the wage has to continue to increase at the national level, as a form of promotion or advancement.
When I got my first job as a photographer's assistant late in my senior year in high school I was paid $1 per hour, and could gauge exactly how much money I could expect to be paid each week based on how much I worked. After graduation I went to work in a grocery store for the same $1 per hour, which was increased to $1.25 three months later when I was given a raise based on job performance.
But while I did that job, I also was attending college. In time, I developed the skills to advance further, both in my grocery store job, and in what later became my chosen career. The minimum wage was not a factor in my life for more than a few months.
And, it should be noted, the minimum wage back then had far more buying power than it has now. By some accounts, in 1968 when the minimum wage had been increased to $1.60 per hour, and inflation from the Vietnam War had not fully kicked in yet, the minimum wage had the highest buying power in its history. The cost of housing, food and the other necessities of life had not yet spiraled out of control and the minimum wage wasn't a bad deal.
Today however, the buying power of the minimum wage is lower, but does that mean it should be raised to a level commensurate with the buying power it had in 1968? What would that figure be? $8 per hour, $19, $22? How would we decide what it should be when the cost of living not only changes within regions of the country, but often within regions of the individual states?
Regardless of those pesky details, my larger problem with the minimum wage as it is envisioned by some in Congress is that it is regarded as a permanent wage level for some workers whose only hope of getting a raise comes from the state or federal government.
Which raises the question, at what point did the government become responsible for people who either won't work hard enough to get a raise, or won't get further training or education so they can advance to better jobs? For that matter, even if the worker is diligent and the employer is a jerk, when did the right to seek a better job elsewhere disappear in favor of the government imposing artificial wage levels?
I realize there are plenty of reasons why people might find themselves behind the 8-ball for a time. But let me point out something about the minimum wage.
In Connecticut where it is $7.50 per hour, a person working 4o hours per week will earn $300 which translates to about $225 take home per week, $900 per month. In the town of West Hartford, which by all accounts is one of the most expensive suburbs in the center of the state, it is still possible to rent a one-bedroom apartment for $700 per month.
That means a husband and wife both making minimum wage, working 40 hours each, apparently with neither the option nor inclination to work longer or more than one job, still can afford an apartment in a very nice and pricey suburb, with $1100 per month for other necessities. Mind you, this is a couple who won't work more than 40 hours per week, won't do anything to advance themselves and don't expect to ever get a promotion or a raise.
How much of that situation is the government's responsibility? From my point of view, very little.
I think the answer to the minimum wage came when the law was changed to allow states to set their own. Each area of the country experiences different cost levels for housing, food, energy and other items, and each state legislature has the best view of the business climate in that state. If changes are needed the states provide the best venue for change.
I think it is time for the federal government to step back from the periodic manipulations of the minimum wage level. It smacks of cheap politics, it doesn't get the job done, it can't be universally applied with a universally anticipated impact, and it does nothing to encourage entry level workers to better themselves.
Leave it alone and spend the time saved on that issue working on the real problems we face.
Saturday, July 29, 2006