Income vs. jobs: The minimum wage Red Herring

By Andrew Sharp

The guy ringing up your order of fries can’t survive on his minimum wage paycheck. But can anything be done about that? Recent debates about the minimum wage — what it should be and whether there should even be one — have been brought to the forefront by fast food workers demanding their pay be doubled. Well-meaning people take different sides of this argument. The problem is that it’s the wrong argument.

The standard argument generally runs as follows:
Kind-hearted labor advocate: These people can’t live on the money they’re making. They deserve fair pay and the minimum wage needs to be raised to give it to them. People should make enough at their jobs to pay the bills.

Thoughtful capitalist: Raising minimum wage won’t help. Rich business owners will keep their money, and they’ll just raise the prices on all of us to cover the higher wage. Then there will be fewer jobs.
Arrogant capitalist, chiming in: Yeah, and the poor people need to get college degrees or actually get a real job that pays the bills, not a high-schooler’s job. They signed up for that wage, they should just be happy with it or go work somewhere else.

I hardly need to rebut arrogant capitalist; his argument is snide and flimsy (especially because I made it a straw man). But the other ideas are worth careful thought.
Many of those who argue against raising the minimum wage insinuate — or say outright — that there shouldn’t be a minimum wage at all, because then the free market could have full reign as God intended and there would be plenty of jobs for all.

Presumably, we could then all go back to a happier day when everyone had a job at whatever rate the rich people felt like paying, and lived in squalid shacks without health care or enough food or heat in the winter.

In those golden days, when the free market reigned with an iron hand, its serfs often lived and died in squalid conditions. Ask your grandfather, if he’s still around, how he liked breathing coal dust for a living in Appalachian mines. He died at 39, you say? Well, at least it’s a mercy that the family has been able to make a new life on the inheritance he passed down, since he received a fair reward for his hard work. What’s that? Penniless? Oh.

Therein is the flaw, of course. Rather than argue about whether the minimum wage will fix anything, why are we not questioning rich business owners who refuse to cut into their profits for fair employee benefit, but instead choose to pass the costs along to the customers? Of course it’s legal — and good capitalism — but does being legal make it good? The relationship between law and justice is often only a casual one.

While we argue over whether the minimum wage will work, we often ignore the deeper issue of whether free market capitalism, as touted by many of its proponents, is really a good thing. At this point in the discussion, some people will start to get very upset. Their faces flush. They breathe faster. They howl, “BUT THAT WON’T WORK PEOPLE ARE GREEDY AND SELFISH CAPITALISM IS THE BEST WAY CONSIDERING HUMAN NATURE ADAM SMITH HARD-EARNED GAINS NO WELFARE STATE YOU CAN’T FORCE PEOPLE TO BE GENEROUS” and so on.

Sure, maybe unchecked capitalism works, for some people. But again, is it good? If we let people compete savagely with greed and selfishness, with only the fit surviving, we may indeed end up creating vast wealth. But will we end up with a prosperous, happy society? Minimum wage is not a fix, in such a system. Rather, it is a sad symptom of greed.

While I can’t answer these profound questions that people have been wrestling with for centuries — this is an opinion column, not a philosophical breakthrough — I would like to make two simple suggestions. (And no, for those who have been getting worked up, it’s not to get rid of capitalism.) One suggestion is that we no longer assume that business owners who hog all the wealth they can get are somehow virtuous, achievers of the American dream, if they got there by screwing their workers. That kind of behavior should be a shame, spoken of in hushed tones, rather than lauded as success.

And two, I submit that a minimum wage is a good check on greed. If we raise it back up to 1970 levels, adjusting for inflation, and as a result we all have to pony up a few more pence for a hamburger, I don’t think it will kill us. Although the hamburger might.