In today’s edition of “No Shit News”:
Oh I’m sorry for the thread title, btw. More like “life south of what now passes for the upper middle class in America” but my editors changed it for clicks.
Is there a reason why the minimum wage isn’t set according to GSA schedules?
Part of the issue with a national minimum wage, is that the cost of living in different places is dramatically different. So this let’s people argue against a higher minimum wage, by playing to the fact that in some areas, that wage might be significantly higher, and harder to afford for some businesses.
But this is hardly an unsolvable problem.
It’s litteraly already been solved. By the government.
The government already has cost of living schedules defined for everywhere in the country, and uses it to adjust things like per diem rates for expenses paid to contractors and stuff.
Why aren’t we using that same schedule to establish a cost of living adjustment for minimum wage?
They’ll be okay if they order less avocado toast, drop to only a single au pair, and invest more of their paycheck in a solid portfolio. /s
Linda Tirado, the Minneapolis photojournalist who lost an eye to a trigger-happy cop with a rubber bullet this summer, tweeted some really good (meaning terrible) information about the state of public welfare in the US. It isn’t pretty. Or easy. Or helpful, but I guess technically it is better than absolutely nothing.
With some choice loaded quotes
https://www.aei.org/carpe-diem/adverse-effects-of-the-minimum-wage-even-if-workers-keep-their-jobs/
Much of the empirical research on the effects of government-mandated minimum wage hikes focuses on trying to find negative employment effects (layoffs, job losses, etc.). But even when some workers are able to keep their jobs, or find jobs, following arbitrary government-mandated wage increases (“political wage setting“) on employers, employees may still be worse off as employers find ways to reduce their artificially higher, government-imposed labor costs as John points out.
No matter what you do, it only makes things worse!
A $15 federal minimum wage is a misguided attempt to increase incomes that would eliminate jobs for workers with the fewest skills and the least amount of experience. The first workers to lose their jobs will be individuals with disabilities, workers who lack English proficiency, those with a criminal record, and young individuals with no experience.
See liberals, you are hurting your people!
https://www.cato.org/publications/policy-analysis/negative-effects-minimum-wage-laws
There is no “free lunch” when the government mandates a minimum wage. If the government requires that certain workers be paid higher wages, then businesses make adjustments to pay for the added costs, such as reducing hiring, cutting employee work hours, reducing benefits, and charging higher prices. Some policymakers may believe that companies simply absorb the costs of minimum wage increases through reduced profits, but that’s rarely the case. Instead, businesses rationally respond to such mandates by cutting employment and making other decisions to maintain their net earnings. These behavioral responses usually offset the positive labor market results that policymakers are hoping for.
No matter what you do, it only makes things worse!
TL:DR it’s a given among economic conservatives that all minimum wage laws are bad. They say they’re bad for workers - they’re really bad for business. They’re bad for business because they don’t believe the workers businesses are getting are worth even minimum wage. If workers wanted more, they shouldn’t suck so much. Starving workers make for better motivated workers.
Don’t get me wrong, basic economics still prevails; you can’t raise the minimum wage to 1000/hr or whatever, not without completely just running on a print money economy. But they reason the government doesn’t raise the minimum wage anymore is entirely political, not economic.
That doesn’t really address my specific question though, which is specifically focused on:
“Why is the federal minimum wage nation-wide?”
As it stands, lots of states have their own minimum wage laws, but even there it essentially fails, because such a thing doesn’t work even if you localize it to a state. In ANY state, you are going to see dramatically different costs of living in different areas. Like, in PA, for instance, the cost of living in Philly is infinitely higher than the cost of living out in the rural areas. If you set the wage to a living wage for the rural folks, the urban folks will be living in poverty. If you set the minimum wage to the living wage for philly, folks in the sticks won’t really be able to fit that into their local economies.
And the thing is, like I said… we already know this. We’ve already gone to the trouble to do the math and calculate cost of living adjustments for individual localities everywhere in the country. The GSA does this.
Why aren’t we imposing a federal minimum wage, that is set according to those cost of living schedules?
Just from a purely practical perspective, such a system is guaranteed to work better than a single blanket minimum.
That’s almost certainly a political issue.
Look at it the other way - let’s take away the Federal minimum wage, give it to states. California makes it $15/hr. Alabama makes it $0.
Now i think what you’re advocating is a kind of technocratic solution that, really only recently, is possible, thanks to computers and massive data sets. We certainly could have a system that had not just a statewide but even regional or even city level minimum wage - i mean you could even break it down by parts of the city.
Arguably though this would create some incredibly weird incentives and pressures. Imagine if the minimum wage was $40 in Manhattan but $20 in Brooklyn, $15 in Staten Island, and $5 in Newark. Imagine the minimum wage breaking down by blocks not just cities. You might get an environment where in San Francisco every Subway has a requirement for bachelor’s degree just to build a sandwich, or where you can’t even get a job as a street vendor in Los Angeles unless you pass a state licensing exam.
Meanwhile in Alabama a Master’s Degree might get you $20/hr and a very extra special mint green Pontiac Tempest.
This is a tangential point but that article makes my head hurt with defining affordable as “spending less than 30% of your income on rent” and indexing on 2 bedroom apartments and not something smaller. This is a wide-spread enough problem that doesn’t need narrow definitions to make a case.
This is what I’m advocating. It doesn’t need to be managed by the states. It would be set by the feds.
Like I said… we already have this. And we’ve had it for… I dunno… decades?
We just don’t apply it to the federal minimum wage for some inexplicable reason.
I really think what it comes down to from the meta level is that this stuff is never addressed because “these people are all kids” or whatever, and it’s no big deal. I saw a study a while back, can’t exactly vouch for it, that the high for minimum wage in real dollars was around 1968,and it was around $22/ hour in adjusted income, and has been going down ever since. I would wager that there are far more minimum wage workers now than 1968, but again, I haven’t done any sort of analysis.
To put it bluntly: I don’t trust the current leadership (or any GOP leadership, frankly) to implement a precise, geography-based variable minimum wage that doesn’t turn out like a new version of redlining and lead to rich areas getting richer and leaving the poor to fend for themselves.
The GSA already does this calculation though, and it’s already used to pay military and contractors.
Understand, this isn’t done on a neighborhood scale… it’s basically done by city or county.
I’m guessing the actual reason is that only half of Congress even wants a minimum wage, so they set it at the lowest common denominator a long time ago and have largely failed to even keep up with inflation since then.
But the reason ought to be that setting minimum wages geographically can have the effect of keeping poorer places poor. Alabama is poor for lots of reasons, but the chief one is that workers in Alabama don’t make any damned money. If they did, they’d spend more, which would increase the size of the local economy, which would in turn spur growth, etc. It should be the goal of a minimum wage law to lift people out of poverty everywhere, not just somewhere.
Minimum wage is a terrible idea anyway. The better way to set a floor for wages is to have a public jobs program with a living wage minimum, which could be adjusted for local conditions just like any other job. (Or just do universal basic income, so that there’s no need for a wage floor at all.)
But like rent control and the mortgage interest deduction, these terrible economic ideas will continue to be implemented (poorly) because a significant chunk of the political class will fight tooth and nail against the economically intelligent options.
I think there are a lot of people who don’t believe minimum wage is a terrible idea. I’m fine with UBI as an alternative, but if anything UBI is even less likely to be implemented at anything like the necessary level than is a minimum wage. And I’m not opposed to a public jobs program, but I live in a country where government is to a great extent a jobs program and most people still don’t work for the government because there isn’t enough government money so there are enough government jobs to shift all wages upward and non-government wages are still bad.
I think history teaches us that capital will usually fuck labor on wages and working conditions without regulation. I don’t know why there shouldn’t be regulation as to minimum compensation in the same way as there is for e.g. the length of the work week or the safety of the workplace.
It seems to me that minimum wage is an imperfect idea, not a terrible idea. It does have some unintended effects, but then, so does the lack of a minimum wage. The lower wages can go, the more that employers can benefit by creating conditions where workers have no choice but to work for next to nothing, so the more motivated they are to do so. (The history of the deep south.)
The history of minimum wage had nothing to do with the South and everything with importing Central and Eastern Europeans, among others, to work in coal and steel mines in utterly unsafe conditions until they died. There was at least and probably two generations of immigrants from the 1880s that were basically used as disposable labor fodder.
No, we are saying very different things here.
Minimum wages were unknown until the 20th century, and it was only FDR’s threat to pack the Supreme Court that pushed SCOTUS to allow such a federal law.
My point is that, from the start, the Deep South was all about having a very strict caste system with a tiny group of elite rulers holding everything, and the absolute minimum in labor costs, and no threat from social mobility. They seriously argued that not only should blacks be slaves, so should low class whites. And they have never given up.
Following Reconstruction, they reinstituted near slavery conditions, and they held such power that they (Southern Democrats) extorted FDR to except a lot of their workers, particularly blacks, from the provisions of the New Deal. And when it turned out that federal programs helped raise up the standard of living, including education, for poor southerners, such that many workers did have choice and opportunity, they were furious. The whole point was to keep masses of blacks and whites in such a condition they could not escape or do better than work for extremely little pay. Minimum wage law was only a small part of the issue, but that is because so many of their workers were excepted from that law.
This political movement has never given up. And if minimum wage laws were eliminated, they would do their very best to use that to regain their old power over workers. (Of course, there are employers in other states who feel similarly, heck, right here in my county. But their politics would would fight an uphill battle outside the South Carolina corridor. Lots of conservatives too far right for my tastes, but they are the only ones who actually consider the post WWII expansion of opportunity a disaster.)
This is a great idea. But then Republicans wouldn’t be able to exploit millions of people as easily.