All this talk about raising the minimum wage got me thinking about who actually makes the minimum wage and what it really does for us. When I think of the minimum wage, I think of my days in high school working at Pizza Hut. I made the minimum wage at first. Then I got a 10 cents an hour raise.
I got a lot of pimples, too.
So I start by looking at the statistics for the minimum wage (
http://www.bls.gov/...) and notice right away that the percentage of people making the minimum wage or less has plummeted from over 15% in 1980 all the way down to only 2.5% in 2005. About half of those 2.5% of workers are under 25, and about a quarter are teenagers. So only about 1.25% of workers over 25 get the minimum wage. And, when I look at it like that, that's about the same percentage as the number of people who would benefit from the repeal of the estate tax. So maybe those two things should be tied together.
And once I reach a republican point of view on something, I realize I have to go back and adjust my thinking.
After a few minutes of thought, I realize the obvious: that the question isn't just how many people are making the minimum wage, but how many people are making only slightly more than the minimum wage, which doesn't show up on the minimum wage statistics. Like me, after my 10 cents an hour raise at Pizza Hut.
So I look here (http://www.bls.gov/...) to get compensation statistics. For 2005, 10% or workers received $7.26 an hour or less. I can't find an age breakdown on that, but it's probably fairly reasonable to assume that it's close to the minimum wage statistics, with about half (probably a little less) of those 10% of workers being under 25 and a quarter being teenagers.
Ok, so where do we go from here? Many will argue that it will hurt businesses to raise the minimum wage because they will have to pay people more. Sounds simple. But I don't buy that at all. Every year sees inflation, maybe about 3% a year, which means that the value of the compensation workers have received has gone down. If revenue increases with inflation, that means the companies get more money and the workers less. Plus, the cost of a burger, fries, and soda at a fast food place have increased, meaning more revenue. (I mention that example because the food service industry is one of the major sources of people making near the minimum wage.)
So after years of businesses profiting from the stagnation of the minimum wage relative to inflation and revenue, the businesses can give back a little bit without hurting themselves. And make no mistake: I don't want to hurt businesses; I don't subscribe to that brand of anti-corporation populism. I want businesses to be able to succeed while also allowing individual people the opportunity to succeed.
The bottom line is, after a little while where I thought I would go against raising the minimum wage, I now think it's perfectly reasonable to raise the minimum wage to improve conditions for the lowest 10% of earners. That most of these people are not single mothers trying to raise four kids is irrelevant. Here's how I would give back to placate the republicans: increase the youth exemption.
Current rules (http://www.dol.gov/...) say people under 20 years old can receive only $4.25 an hour for 90 days before needing to be paid the minimum wage, and allow paying full-time students as little as 85% the minimum wage. If what we're really worried about is people trying to make ends meet then we shouldn't be worrying too much about minors. So how about an age-tiered system where people under the age of 18 have a (I'm making up numbers here) $5.50 minimum wage, people age 18-23 have a $6.25 minimum wage (this intermediate tier is designed to help college students), and people 24 or older have a $7.25 minimum wage. That would soften the blow, especially in the food service industry, where young people make up a large portion of the workforce.
I'm always glad to find out that my desire to move toward the republican point of view on an issue gets blunted when I actually take a deeper look at the issue. My next such issue to look at (I don't know if I'll write about it) will be if inflation requires us to raise the minimum wage, doesn't it also require us to raise the minimum taxable estate size? (I mean, maybe after we're done unbalancing our budget by spending billions of dollars in Iraq. I'm certainly not suggesting we cut any taxes before then.)