Debunking minimum wage myths
Right-wing ideologues make outlandishly false statements about taxes, spending, the economy and other things because they know few people will to bother to check the facts. But today when most everyone either has a computer or access to one they shouldn’t get by with such deception. It’s a simple matter to Google up a subject and check it out.
Bill Clinton angered many liberals when he signed the 1996 Personal Responsibility and Work Opportunity Reconciliation Act, the “Workfare Law.” But since then welfare caseloads have dropped from 5.5% to 2.1% of the U.S. population and many former welfare recipients have entered the work force. But these encouraging numbers mask some bleak realities for many former welfare recipients.
Many of these people are not working fulltime or a full year and are only earning between $6.00 and $8.00 per hour. That’s far below the minimum required to provide for a family, even if they work two jobs. Although the poverty rate has declined somewhat due to an expanding economy, it has actually increased among families headed by single working mothers, and that includes the majority. Is there a solution?
When the subject of raising the minimum wage is mentioned it immediately evokes warnings of killing jobs and driving companies offshore. But studies of past minimum wage hike effects and the viable economies of other developed nations with higher minimum wages fail to substantiate these forebodings. And certain companies leave anyway despite our comparatively low minimum wage.
A review of the minimum wage rates in other developed countries with free-market economies similar to ours revealed the following figures: Australia $15.58, France $12.83, Germany $11.28, Luxembourg $14.78, New Zealand $12.65 and Britain $11.85. Germany, who pays $4.00 more per hour than our puny $7.25, is exceeded only by China in exports. Paying a decent minimum wage hasn’t seemed to slow Germany’s prosperity.
The U. S. minimum wage has been raised 22 times since 1938 and per capita GDP has risen more or less steadily during that time. There is no indication this pattern will not continue as long as raises are kept within reason.
A recent study by the Institute for Research on Labor and Employment at the University of California at Berkley found no adverse effects from higher minimum wages after they were raised by certain states. The study further revealed some positive outcomes such as higher employee morale and productivity and reduced absenteeism and employee turnover. And there is also the synergistic effect of increased purchasing power on the general economy.
Today we have the greatest disparity between the highest and lowest incomes since the Great Depression. And although the American worker’s productivity has almost doubled since 1968, in real dollars the hourly wage has hardly increased at all.
Our minimum wage of $7.25, or $15,080 annually, was last raised in 2009. But this is nowhere near the minimum needed to provide housing, food and medical care for an individual, much less a family.
George B. Reed Jr., who lives in Rossville, can be reached by email at reed1600@bellsouth.net.