Minimum Wage: You'll Get Something and Like it!
You’re speeding down the road in the United States—you look over your shoulder—what do you see? Well, if you’re living in 2021 like I am, then it would probably be a poster board from Staples which reads in big bold letters, “Hiring!”
This shouldn’t be too surprising considering Covid-19 practically paralyzed our labor force. Honestly, I’m shocked Uncle Sam hasn’t yanked me out from beneath my covers, slapped a deli apron on me, and whispered, “We want you”. Oh wait, *finger snap* that’s already happened…I mean, I got a new job, not the part about Uncle Sam breaking into my home and slapping me with aprons.
Indeed, I have a new job, but before this I was basically bouncing around. While doing so, I started itching to have a certain question answered, "Am I being paid too much, or too little?" This started after experiencing life on the floors of an Amazon Fulfillment Center where the base pay is $15.00 p/hour. I did nothing but walk around aimlessly; similar to how a zombie would, but instead of stumbling towards Rick Grimes I was looking to package up a riveting read on Flat-Earth theory for Tobi.
We've all heard a ton of gobbledygook on this $15.00 federal minimum wage, and how it’s going to save the poor; but I got to level with y’all—even if it was for Kylie Jenner—slicing pepperoni for an Italian sub-sandwich is not worth $15.00 an hour. With that being said, it would seem that there are two groups who have much to lose as a result of this shift: Small-business owners, and the youth.
Minimum Wage:
If I were to give it a bit of pizazz, I guess I would define minimum wage as a blunt instrument tasked with solving poverty in the U.S. But as you can so clearly see, this did not go according to plan. The discussion on whether or not minimum wage is a favorable economic policy is largely one sided. Roughly one-third of published economists have openly questioned its validity as an anti-poverty policy; in their defense, would you not also raise an eyebrow if an anti-poverty policy was responsible for generating additional poverty? In my opinion, it would often seem as though minimum wage is conflated with altruism. Although that is purely hypothetical, I can say with certainty that modern minimum wage policy is designed with the intention of barring employers from paying "low" wages, not a tool used to eradicate the poorer tax bracket.
Small Business:
A once handsomely run pizza shop which employed many teens at a local catholic school is now on the verge of going under as a result of a simple policy change, but the employee of Goldman Sachs earning triple the income of our shop owner here is seemingly indifferent to the new shift in pay. How does this happen? Well, this is one of the many flaws of minimum wage. I, along with many other economists refuse to abide by systems that burden the innocent. It is delusional to suggest that Lowes Food, a grocery-store chain in the Southeast area, is in-part responsible for the impoverished, and asymmetrical costs of living that one may experience in Seattle, Washington. Claiming $15.00 to be a "living wage" in America is lunacy: two teenagers may be earning the same wage for their work, but their state, or local markets could be entirely different in terms of supply, and demand.
Youth:
In previous work, I have described the concept of human capital: "the expression used when referring to an individual's share of skills, intelligence, discipline, and various other traits used to predict their potential economic value." Well, one thing I have not discussed is human capital accumulation; which, may only exist given that a particular society has education growth and work experience. Odd that our nation's education publicly starts at the ripe age of five despite work experience being considered illegal until most commonly receiving a permit at the age of 15. Why is all of this necessary to discuss? Glad I asked myself.
Economist, Walter Williams, had started working a job gaining much needed experience at the age of 13. Consider this, jobs are demanding higher levels of the following: education, experience, and involvement in projects or ventures beyond the workplace. How is it then that we find ourselves demanding that the minimum possible payment allowed by employers be a "living wage"? On paper at the very least, this seems to be paradoxical. The market demands citizens with higher productivity and competence, yet we have a government that prohibits the individual from being a competitive candidate. After all, what if Williams was a 13 year-old who only earned that job because he was willing to accept cheaper pay? Well paying jobs for people without any work experience is supposed to be earned, not bestowed via judicial intervention. This precisely illuminates what I believe to be the second and last major group to shoulder the woes of a rapid shift in how much employers are required to pay their employees.
What Now?
To those of you who have had periods in your life where paychecks vanish the moment you receive them, to those who see two paychecks vanish before you even have the time to invest working-hours into the first, I empathize with you. In this piece, I am not implying that we should do something drastic like refusing to pay taxes or resort to primal behaviors of a tribe. More so, I wanted to communicate what I believe to be is a flawed idea still permeating the space of economics in this country. We are responsible with protecting our small businesses, and young minds. We are responsible for building a terrain which promotes freedom, and sovereignty. Our current economic logic suggests that we suppress the success of our small family, and locally owned businesses for the sake of Americans who do not share the same geographic elements which shape our local market. It expects us to happily accept responsibility for the actions (for better, or worse) of states, cities, or towns in areas whom may, or may not be efficient/effective. Trust me when I say this, we have a problem and it needs to be solved, and it starts when we realize that I don't deserve $15.00 to cut pepperoni.