High Cost of Low Wages

I recently had a conversation with a person who asked why no one wants to work at minimum wage jobs. While this is a good question, it also shows how disconnected the person, who lives a comfortable life, is from the economic reality of so many in our country.  This person pays workers $9 to $11 an hour to do work in a large orchard. I suggested that perhaps some people have given up seeking work because the income they’d earn would amount to them merely existing on minimum wage. Minimum wage workers may earn enough to pay rent and maybe have a little leftover for food but little else, like gas, utilities, car insurance and clothes. Low wages are not a good motivation to go to work with the prospect of never getting ahead. It's not hard to empathize with these workers when you learn what Robert Reich recently pointed out, “Wall Street bonuses totaled $27.5 billion last year, which is more than 3 times the combined annual earnings of all American workers employed full-time at the federal minimum wage.” Low-wage workers costs federal and state governments (taxpayers) $150 billion a year in benefits to compensate for their low wages, such as food stamps, Medicaid/MediCal, financial assistance and earned income tax credit. If companies paid a living wage, imagine how much would be saved by the government. Then, these workers constantly face the fear of getting sick or hurt with no healthcare coverage or having their transportation break down and no money or credit for repairs, then what do they do? Or, they get a traffic ticket and can’t afford to pay for it, but if you don’t the system piles the fees and fines up and can take your license away, which for most makes it harder to get to work. Any one of these “inconveniences” could be catastrophic to a minimum-wage worker and force them out of their homes and into couch surfing or onto the streets with a shopping cart or bicycle as a vehicle. The minimum wage jobs used to be for young people still living at home and in high school. These workers did not have to worry about shelter, food or other necessities, and concentrate on their grades, friends and their futures.  Today’s low-wage workers earn less per hour than their counterparts did 50 years ago. Minimum-wage workers are people living with others, some marry in hopes that two minimum wage incomes will get them ahead and might until they have children, which only compounds their financial problems. Trying to live on poverty wages, is discouraging and as the bills pile up the workers give up. According to Opportunity Starts at Home, 61 percent of those questioned reported having to make at least one sacrifice in the past three years because they were struggling with housing costs, and has to cut back on learning activities for their child, nutritious food, or health care. The federal minimum wage is just $7.25 and has not increased since 2009. The Raise the Wage Act of 2019 would gradually raise the federal minimum wage to $15 an hour by 2024, what do workers do in the meantime? In more expensive areas of the country, a single person needs more than $15 an hour to subsist. By 2024, single people will need a minimum wage of $23.80 in Los Angeles, $28.48 in Washington, D.C., and $28.52 in New York City. Imagine being a single parent with children. Democrats say that if the minimum wage had kept pace with inflation since the late 1960s, it would now be above $10. There is little doubt any increase in the minimum wage would be opposed by Republican lawmakers. They scream minimum wage hikes results in job losses, stagnating job growth and killing businesses, but we all know Republicans lie for their corporate donors. A recent analyzes of published studies on minimum wage hikes confirms that the Republican are lying about negative effects on employment resulting from increasing the minimum wage. There is no conceivable or rational reason why we can’t afford to pay the lowest-paid worker in America today substantially more than what their counterpart was paid half a century ago. Our economy has grown substantially during the past 50 years, and workers are producing more in each hour of work, with productivity nearly doubling since the 1960s. If the minimum wage had been raised at the same pace as productivity growth since the late 1960s, it would be more than $20 an hour today. This is where the government should step in with a universal basic income (UBI), healthcare and rent control, free schooling and trades training, preferably by unions.  There are a lot of countries and very rich people looking hard at the government giving a UBI to all citizens. In trial tests of UBI, it was found that people continued to work, go to school without having to worry as much about making ends meet or having a place to live. With that stress relieved, they find they are much healthier and better workers are happier workers. Some have started their own businesses, which would give people jobs. It only makes sense that people would be encouraged to work to have more money, after all, the wealthy don’t stop working once they gain more money than god. Martin Luther King Jr said it best, "This country has socialism for the rich, and rugged individualism for the poor." It's time that changed. More money in the economy means a more robust economy as people have more money to spend on durable goods or a down payment on a house, new car or something else the wealthy take for granted. The homeless numbers  would substantially be reduced allowing the government to focus on other critical issues. The money spent on trying to resolve the aforementioned problems could be focused on addressing climate change and green energy and ending the wars to take other countries’ oil reserves.