My purpose here is not to argue that the minimum wage should
be higher (because it’s the right thing to do, or because expanding the
purchasing power of the working poor will stimulate the economy) or that the
minimum wage should be abolished or reduced (because it will decrease overall
employment and represents a further incursion of the government into free
enterprise). My purpose is to argue, or rather to start the argument, that we make the minimum wage more rational so
that we can all go about our days.
The core issue is that the word “minimum” doesn’t mean
anything. Clearly, the absolute minimum wage is $0 per hour, but we’ve already
abolished slavery. So then we must ask: the minimum wage for what? Is it the
minimum wage needed to survive? No, there are plenty of people that demonstrate
that you can literally sustain your life on less than our current minimum wage,
so it’s not that. Is it the minimum wage needed to eat three decent meals a
day? The number of people with minimum wage jobs that currently receive supplemental
nutrition assistance indicates that it’s not that either. To pay rent? To pay
for college? To have health insurance?
The point is that there are an infinite number of things
that could be used as the standard for a “minimum” wage. So how do we as a
nation choose what to use as our standard? The question actually isn’t that
hard to answer when we remember that the standard is one that is set by the
federal government, which already subsidizes tens of millions of people a year
with low incomes. The federal government already has standards in place to
determine who is eligible for government assistance, which gives us the answer.
The minimum wage should be the wage at which, if employed full-time, the
government does not have to assist you in acquiring your basic needs (food,
housing, health care, etc).
Making this change has several benefits. First, it ends
the minimum wage debate forever. The government already updates its various
standards for eligibility for food stamps, rental assistance, Medicaid etc
every year, so there’s no need to debate whether the minimum wage should be
increased from time to time. The minimum wage will move with the other
standards. It will always be the minimum amount needed to not qualify for
government assistance. Second, it will force the government to examine its
standards more closely, something that has been needed for a long time. Our
measure of poverty, for example, is antiquated and has needed to be revised for
decades. With the minimum wage as a unifying factor, we can streamline some of
the other standards, reducing bureaucracy etc.
Third, and perhaps most satisfying, is that it moves the
economic arguments for and against raising the minimum wage into the
background, and focuses the issue on making government assistance more
understandable and transparent. If you are a fully employed adult, does it make
sense that the federal government, your tax paying fellow citizens, would cover
part of your rent or food? Not especially. Is a business that can’t survive while
paying its employees enough so that they don’t have to be subsidized by
everyone else really a viable business? Not really. And if raising the minimum
wage does lead to decreased employment, then the government can definitely be
there to support those people who do not have a job, or lose hours.
Government assistance then becomes a very clear bridge for
people that are unemployed or underemployed and not a subsidy for companies
that want to underpay their full-time workers.
