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Living Wage

November 29, 2015

You shall not oppress a hired servant who is poor and needy, whether one of your brethren or one of the aliens who is in your land within your gates” (Deut. 24: 14).

The presidential race has turned a spotlight on the minimum wage. Adopting an overtly religious posture, Republican candidates uniformly oppose raising the federal standard. Democratic candidates happily make “pie in the sky” promises about it.

Here are a few things for Christians to consider.

Background

The federal minimum wage has not been raised since 2009, when it rose to $7.25 per hour. In the intervening years, it has lost 8.1% of its purchasing power to inflation [1]. However, the federal minimum wage would have to be more than $8 per hour to equal its buying power in the 1980s, and nearly $11 to equal its buying power in the 1960s [3].

  • As of this writing, the price of a gallon of whole milk is $2.71 at Walmart.
  • The price of a 33 oz box of Kellogg’s “Frosted Flakes” Cereal is $4.58.
  • The price of a five-pack of Kraft Macaroni and Cheese is $4.50.

Scope

There are some 3 million workers earning the minimum wage. About 20.6 million more workers earn “near” minimum wage (more than the federal standard, but less than $10.10 per hour) [2].

Fully 89% of those who would benefit from an increase in the federal minimum wage to $12 per hour are 20 or older; 56% (13.2 million) are women [4].

Impact on Jobs

There is a heated debate over whether raising the minimum wage would decrease the number of jobs available. Many economists – including Nobel laureates Kenneth Arrow of Stanford University, Erik Maskin of Harvard, Thomas Schelling of the University of Maryland, Peter Diamond and Robert Solow of MIT, Michael Spence of NYU, and Joseph Stiglitz of Columbia University – dispute this [5], as do rigorous studies [6].

By contrast, the nonpartisan Congressional Budget Office reported in 2014 that an increase in the federal minimum wage to $10.10 could eliminate some 500,000 low-income jobs, nationwide [7]. Critics contend this report did not take all factors into account [8]. The same report acknowledged an increase would raise nearly a million families out of poverty.

Impact on Profits

The argument is often made that an increase in the federal minimum wage would cripple small business. Almost two thirds of minimum wage earners are, however, employed by large corporations. Companies like Walmart and McDonald’s, making solid profits, can readily sustain such an increase.

Actually, the viability of small business is more heavily impacted by sales (and competition from big business), than by wage levels.

Hidden Motives

It is worth noting who stands to benefit, if the federal minimum wage remains the same.

Banks, financial institutions, and large corporations contribute heavily to the Republican party, Republican candidates, and Republican sponsored PACs. There is nothing illegal about this. Specific contributors though include: AT&T ($36 million), Koch Industries ($27 million), UPS ($23 million), GE ($17 million), Union Pacific Corp. ($16.7 million), and Walmart ($11.6 million) [9].

Of course, a number of these groups contribute to the Democrats, as well. However, Service Employees International Union, by itself, contributed $222 million to them – more than all the Republican contributors listed above combined.

What this suggests is that neither party’s motives are pure, whatever posture it may adopt.

Voters will have to make up their own minds.


[1][2] Pew Research Center, “5 Facts about the Minimum Wage” by Drew DeSilver, 7/23/15, http://www.pewresearch.org/fact-tank/2015/07/23/5-facts-about-the-minimum-wage/.

[3][4] US Dept. of Labor, “Minimum Wage Mythbusters”, http://www.dol.gov/minwage/mythbuster.htm.

[5] Economic Policy Institute, “Over 600 Economists Sign Letter in Support of $10.10 Minimum Wage”, 1/14/14, http://www.epi.org/minimum-wage-statement/.

[6] National Endowment Law Project: Raise the Minimum Wage, “The Job Loss Myth”, http://www.raisetheminimumwage.com/pages/job-loss.

[7] Congressional Budget Office (CBO), “The Effects of a Minimum-Wage Increase on Employment and Family Income”, February 2014, http://www.cbo.gov/sites/default/files/cbofiles/attachments/44995-MinimumWage.pdf.

[8] Journalist’s Resource, “Effects of Raising the Minimum Wage:  Research and Key Lessons”, 10/19/15, http://journalistsresource.org/studies/economics/inequality/the-effects-of-raising-the-minimum-wage.

[9] OpenSecrets.org, “Top Organization Contributors”, https://www.opensecrets.org/orgs/list.php.

READERS CAN FIND MY VIEWS ON ABUSE AND ABUSE-RELATED ISSUES AT  ANNA WALDHERR A Voice Reclaimed, Surviving Child Abuse  https://avoicereclaimed

38 Comments
  1. I am a strong supporter of a living wage…

  2. Anna, this is truly amazing. I used to be a staunch conservative and member of the Republican Party. But over the years I have grown weary in a big way of the lack of compassion and concern I see among so many. I can’t vote Democratic because of some of their beliefs, but at least they make the effort to help people. If all we care about is money coming out of our wallet then we are in a sad state indeed. As Christians I think an excellent argument can be made for us giving more to the poor, not less. That’s what it says in my Bible.

    I am for the living wage and lot of other things now that would be considered liberal.

    Sorry this is so long but politicians continue to disappoint me. I hope you won’t be offended, but as I was reading this, it reminded me very much of Bernie Sanders. If you have not seen his website you should check it out.

    Thanks and God bless.

    • Thank you for this thoughtful response, Nicodemas. Someone said that the Republican party defends liberty, and the Democratic party equality. Even under the best of circumstances, tension will exist between those two ideals. What is deeply discouraging to me is that our politicians seem to be governed entirely by personal ambition. Though elected to represent us (rich and poor alike), they cater to special interests and focus exclusively on short-term gain, without thought to the future.

      • Yes agreed. I do see where Democrats use the “compassion card” to get votes, but I cannot tolerate harshness, the hatred for our current President, the huge concern over how much will something cost, that constantly comes from the Republicans. They have missed the mark in a huge way, and I do not care to be one of them in anyway. I will vote compassion – always.

      • You are a good man, Nicodemas.

  3. I am constantly amazed how easy it is to be compassionate with other people’s money.

    • I am sure that you worked hard for every penny that you have. You scrimped and saved, sacrificed and did without. So did I. But these funds are not ours, in the same way that the talents we possess are not ours. Our material goods, our talents, and the opportunities we have had in life are all blessings flowing from the Creator. Our challenge is to use them as He would wish.

      You may not want your funds spent by government (a clumsy, inefficient, and corruption prone mechanism, if there ever was one). But we live in community, not isolation. It is reasonable that we decide on and strive for the common good. Leveling the playing field for those who have had fewer opportunities than we have not only improves individual lives, it maximizes the talent base available to the country. That seems to me a worthwhile goal.

  4. It is unfortunate that there simply is not enough money available to be able to support and enable every worthy cause. That is the reality of America today. Even a cursory look at our nations income vs.expenditures reveals one deficit after another. We are facing major shortfalls in the area of income,either that or we are spending too much of what we do have.

    This does not mean that to make the effort to be fiscally responsible one is less concerned about the plight of the working poor. It simply means there isn’t enough money to do some of the things that are very important to so many,and it is financial suicide to continue acting as if it doesn’t matter.

    We as a nation must come to a decision as to what is most important to us and take the necessary actions to finance that,whatever it is. What that isn’t however, is everything we have enjoyed in the past,at least until there is sufficient income to do so. And that is a bitter pill that is hard to swallow.

  5. Raise the minimum wage for employers having a number of employees above some threshold. The exact number requires research and debate.

    • And this is a good example of what I said, above. It’s, so easy to be compassionate with other people’s money. If you don’t have to make payroll, tax payments, franchise and business expenses, it’s very easy to glibly say, “Let’s pass laws making employers pay higher wages.”

      What is being ignored in this debate is that many of these jobs are not careers, and as such should not have a living wage. I’m sorry, but burger-flipper and counter-person at Burger King is not a career-path, it’s an entry level job not requiring a whole lot of skills.

      Another thing that isn’t discussed is the future of these jobs. This past spring, Seattle instituted a “living wage” for restaurant workers. Supporters like to cite a report that this increase hasn’t had a significant effect on jobs. What they don’t cite is an economic report for the state that showed job increases for restaurant workers outside Seattle, but stagnant job levels in Seattle. It has had the effect of stopping growth.

      Another consequence in the offing is making automation economically feasible, for employers. Industry analysts are exploring kiosk, or self-serve, ordering restaurants. With increased wages, it may cause the elimination of counter-help. After all, why pay someone to punch keys for customers if the customers can do it themselves. Less employees, less labor costs.

  6. Realistically,there is no formula to predetermine which employers are able to support this suggested rise in the minimum raise.And what to do when the balance sheet tilts in the opposite direction once this increase has been given? Care to be the ogre that says “give it back”?And how would any of us like to be that CEO who has established his budgets,cast the five year vision with all it’s anticipated costs,and now is mandated to somehow cover the unexpected/unanticipated rise in wage costs? Good luck to you when you deliver the annual report to a roomful of angry investors who are expecting a bigger return on their money!

    Being someone who has been involved in the establishment of multi million dollar budgets I understand very well that at the end of the day there are always very difficult decisions to be made.Let’s face it:everyone feels their cause is the most pressing and wants their project funded no matter what.Unfortunately,that is not how business operates,and like it or not government is business-BIG business.

    IMO,the debate on the minimum wage rages on minus one key omission,and I believe it is a deliberate omission:that is that every person has a degree of accountability and yes, responsibility to do all they can to enhance their standing on the income ladder.Why should that be the responsibility of the government? When did that become the established process?

    Like millions of Americans I’ve earned the minimum wage and I have also received Food Stamps.I have never forgotten that,and both of those events served to remind me that if I wanted more out of life than the minimum,it was squarely on my shoulders to make it happen.

    Have our collective memories become so clouded that we have forgotten that this nation is a nation of immigrants? My own ancestors(and likely many of yours) arrived at Ellis Island with the clothes on their back and hope for a better future,and not one thing more.This nation was built into the greatest nation ever by hard working people who accepted the personal challenge to make a better life for themselves.Were they wrong? Why are we different?

    And of course the point must be made that the playing field is not level today. Of course it is not level.It has never been level nor will it ever be level.To suggest otherwise is to ignore the reality of economics.This is a truth that we don’t want to hear because all of us want to believe that we can somehow level the playing field for all. A noble endeavor to be sure,but thousands of years of human history make it clear that it has never happened.

    I am no expert in matters such a those being discussed in this thread,but if history has taught us anything it is that nothing is free.Raising the minimum wage,increasing the defense budget,providing school lunches,etc… are all important and necessary things to consider.Let’s just not forget that it all has to be paid for eventually.
    Ron

    • Yours is a potent argument, Ron. I wish I had a satisfactory answer. I can certainly understand where you’re coming from. I am first generation in this country. My parents and grandparents came over after WWII. They had nothing but faith, the clothes on their backs, and a willingness to work hard at any job to be had. My grandmother did wash, and cleaned other people’s toilets. She died at 58. As a lawyer, I worked 10, 12, and 14 hour days until my own health collapsed.

      This, however, is my dilemma. As we speak, there are children in American cities going hungry. The teen I mentored through the Children’s Aid Society was born to a drug addicted mother, and had no books her final year of high school. No books in the City of Brotherly Love, the city where the Declaration of Independence was signed. And she was by no means alone in that. I have been in homes that had no furniture, no heat, and no plaster on their aging walls. Truly, the sins of the fathers are visited on their children — especially in households from which those fathers are absent, just as their own fathers were. Does that mean we, too, should abandon those children?

      I have no expectation that raising the minimum wage will eliminate poverty. I have no confidence that our government — or any government — can regulate the economy without dire consequences. But we must do something.

      • Thank you Anna,both for your heart and your willingness to tackle the really difficult issues that must be dealt with. I only wish that our elected leaders had that same heart. 🙂

        I live in what is best described as a small rural farming community of less than 2000 people. The largest employer in this area is a well known auto manufacturer that pays far above the prevailing wage. You would think that because of this no child would endure hunger,but that is not the case at all. Just seven miles from me is a town of 22,000 people and the numbers of poor and hungry children is staggering.

        I said all of that to make this point: in the area in which I live there are not enough resources to go around and the end result of that is kids are hungry,many have no access to health care except at the ER,and there is a sense of hopelessness in many.

        As you said so well, we have to do something and I am 100% in your corner. This subject is one of the primary reasons that I am such a vocal critic of the church. I’ve been involved in various ministries for forty years so I know that there are many churches who have the financial means to help feed the hungry. And I’m not referring to a soup kitchen,needed though they are. I’m talking about a daily program to feed and clothe the hungry,as well as to offer educational opportunities to the parents so they might be able to make a better life for their families.

        When I read about churches spending millions on a new jet so their preacher can fly around the world my heart breaks because I know that this was not what the Lord intended for his church to do with those funds. Can we only imagine what that kind of money could do in our communities to ease the suffering of the underprivileged? This is heartbreaking to me,that we can do something but we choose to squander our resources on things that are not necessary.

        I do apologize to you and everyone else for writing such long posts,frankly I always shunned these types of posts in the past because I am so passionate about them. For the record I am rooting for the underdog,always have and hopefully always will.

        Ron

      • God bless you, Ron. Please, keep writing “such long posts”. They do my battered heart good. By the way, I’ve just moved to a rural area myself. 🙂

  7. Shame we can’t have a maximum amount of greed instead!

    • That seems to be what we’ve achieved.

      • Right! But wouldn’t it be marvelous if profits over a certain % had to be distributed to the poor and needy. That would so change the world! (I can dream! lol!)

      • You have a good heart, Claire. What you propose though is the essence of Communism (in a modified version, socialism). There are at least two major difficulties: the disincentive to those who are genuinely productive or creative, and the potential for corruption. Under any system, leadership finds a way to benefit.

        I keep hoping human nature will change. That it hasn’t in thousands of years — that we can’t manage to save ourselves, despite our technological advances — is another proof of our need for a Savior in the Person of Christ.

        Blessings,

        A.

      • Ah that’s why my suggestion was a percentage of profit – the incentive remains for honest folks that work hard and are deserving. Imagine for example if big pharma were limited even to 50% profit that would be a world changer.
        I’m very much a socialist by the way (I can’t imagine how a Christian could be otherwise) but I agree the problem is in our greedy hearts. The only truly benign and just form of government will be when Jesus returns, and the poor of the world will be fed and clothed, all will have work of a satisfying fulfilling nature, evil will be no more and the measure of a man will be his love for his fellow man.

    • Shades of “At some point, you’ve made enough money.” And who gets to dictate that point? (“Dictate” being the operative word.) The Collective, the Politburo?

      • Yes. My thinking, also, if you’ll see my response to Claire. We had relatives behind the Iron Curtain while it was still in place. Their situation made the experience of Communism a reality for me. We sent food packages to them at the holidays. The many failed Five Year Plans in China and the USSR — not to mention the religious persecution — illustrate on a grander scale the inadequacies of Communism.

      • interestingly the ancient Chinese had a system limiting the amount of profit one could make – a certain percentage. To make a higher percentage was thought to be immoral.

      • We had something similar, called taxes. At one point in the early 60s, you got to keep 10% and the government got 90%. In England, it was even worse. George Harrison wrote the song Taxman when he discovered that inland Revenue was taking 95% of what he made that year.

        In America, it was JFK who said that we had to lower taxes to give business incentive to grow an employee people.

      • ah but it’s different you see, taxes go to the government who spend only a tiny, tiny, percentage to help the poor (had a great graph of government spending if only I could find it) over half of the money goes on military spending to protect international corporate interests that are of no value to the man on the street, (never believe propaganda – scratch the surface and you’ll generally find money as the route cause of most conflicts, certainly US ones. After that a good portion also goes to line the same greedy pockets in subsidies etc. I’m not for higher taxes they have have little or nothing to do with helping the poor (and the super rich employ folks to help evade them anyhow). Limitations on profit rates are entirely different. The idea being to stop unethical business corporations exploiting not only the poor but the hard working middle classes as well.Instead of the money filtering through the black hole of governments it remains unspent in the pockets of those that need (or deserve) it most. Anyway its not going to happen as politicians are also bought and sold by these same economic elite. Even if they wanted they are mostly mere puppets, their strings pulled by their big campaign backers..
        I look forward to when God takes over and His system of economics takes over – the more you give the more you get (actually I find that works even now. When I give He always seems to give back 100% more in one way or another.)

  8. I think what is so difficult for us to grasp sometimes is the simplicity of the answer to all of this. As always,the answer is found within the scriptures. Jesus tells us that there are but two key points that all the law and the prophets hang on:

    1) We are to love the Lord our God with our whole heart and mind,and

    2) We are to love our neighbor as ourselves

    If you think about this,if we fulfill the first one,won’t the second one be more or less automatic,as a by product of the 1st?

    Throughout human history this has been the crux of it all,has it not? Sixty six books of the Bible can be condensed into these two seemingly easy to follow commandments. Perhaps,just perhaps,if we the church were to live these two commandments as our Lord intends for us to,a few more of those outside the church would follow our lead.Imagine how powerful that would be in eradicating many of the things being discussed in this thread!

    Just some more thoughts from someone who needs to do a much better job of leading by example.

  9. Amazing post, so informative. I have the dumbest comment question: so is the current min wage $10.10? My head’s been in the sand!

    • Thank you for your interest, Diana. There are no dumb questions. The situation is confusing. The federal minimum wage is $7.25 for those with health benefits; $8.25 for those without.

      Most states have established their own minimums. You can find a state by state breakdown at the US Dept. of Labor, Wage and Hour Division website http://www.dol.gov/whd/minwage/america.htm. Where the state minimum falls below the federal, it is automatically raised. Only Georgia and Wyoming fall into this category. About 13 states are considering an increase in 2016. Some cities and counties, also, regulate the minimum.

      The $10.10 level is a reference from which some of the statistics cited here were generated. This level — technically above the federal minimum — equates with an annual wage of $19,695 for a 37.5 hour work week. That is just below the federal poverty level of $20,090 for a family of three (18.8% below the poverty level of $24,250 for a family of four). A significant number of minimum wage earners, of course, subsist on less than full-time employment.

      The argument that an increase in the minimum wage could induce employers to replace certain workers with automation has some validity. However, employers will pursue automation whenever it becomes less costly than labor (whatever the minimum wage). Toll takers and sales personnel have seen this already.

      And not all minimum wage jobs could be easily automated — not in the foreseeable future, at any rate. Minimum wage workers include not only fast food handlers, but nursing assistants and health aides, emergency medical technicians, child care providers, life guards, ski patrol, gaming dealers, auto service technicians, amusement park attendants, and farm workers.

      We want grandma well taken care, and fruit on the table fresh and unblemished. We just don’t want to bear the cost.

  10. Hi, Anna,

    I know that I’m revisiting an old post, but just today (3/13/16), I find an article on the conservative-leaning website that looks at data from Seattle’s experiment with arbitrarily raising the minimum wage. This report shows that in just a three-month period last year, Seattle lost 10,000 jobs. Now, this cannot be attributed to regional/seasonal fluctuations, as the suburbs around Seattle GAINED a large number of jobs. Here is the article: http://hotair.com/archives/2016/03/13/fight-for-15-update-seattle-employment-craters/

    • I appreciate the information, truly. I recognize the risks associated with raising the minimum wage. What though is the alternative? I am at a loss.

      • The alternative? No easy answers, but here are some of my thoughts.

        First, in the short run, almost nothing, other than welfare and charity. Tampering with markets only screws up the markets. I would not be averse to mandatory skill training for those who are burgerflippers. They are there because they never got skills to do anything else. Harsh, but true. If they had skills, they wouldn’t be there.

        Second, mid-term options. a) rethinking orphanages. This country used to be committed to the care of children in a way that we’ve lost. I know the idea of orphanages conjures up images of Dickens, but it would seem to me that children living in poverty and slums does the same. Towns, counties, cities and states, plus no-governmental organizations, all over this country made sure that local needs were known in local settings and cared for by local institutions. Now, with SNAP and Welfare, we can wash our hands of the problem and send folks to government resources. If we are the resources and not the government, then we get involved. (Another example of washing our hands of the need to care for the less fortunate is how we emptied mental care facilities onto the streets, creating a new governmental problem, homelessness.)

        b) re-examination of our laws that make it harder for people to start and operate their own small businesses. I know this sounds off-the-wall, but I believe that many of those burgerflippers would be able to get work, or even create work, if they didn’t have to fight laws and regulations that have been put in place to protect existing businesses from competition. Since you are a lawyer, I believe that you will find perusing the websice of the libertarian Institute For Justice interesting: http://ij.org/issues/economic-liberty/

        Third, long-term. Complete revamping of our educational system. Public education today is predicated on the concept that college is not only every child’s right, but every child’s destiny. Over the past half-century, we have witnessed the jettisoning of the idea that our public education prepared children to enter life, to develop skills that would help them fit into society. With the jettisoning of shop and office skills’ classes, education was retooled to prepare our kids for college, not life. The result is that pretty much everyone leaving high school is not equipped with the skills to survive.

        The result is that adolescence is pushed back until after college, but we’re at the place where college no longer prepares you for a vocation, and so that is passed on to grad school.

        There’s a whole lot more I am tempted to say, but I’m just going to ask you to check out another website, of another advocate for work and education alternatives, Mike Rowe. He has started the mikeroweWORKS Fountation, and a perusal of his website is informative: http://profoundlydisconnected.com/

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