Here’s what bothers me about the minimum wage discussion making headlines across the country this week.
Not all jobs were meant to be self-supporting, much less family sustaining.
There are many jobs that are menial and serve as an entry-point into the workforce. There’s nothing wrong with that. An employer fills basic tasks while an employee can make some money and gain real work experience.
To recap the discussion, progressive House Democrats are pushing the Raise the Wage Act, which would incrementally increase the minimum wage to $15 by 2024.
Earlier this week, the Congressional Budget Office, or CBO, released a report with projections on the impact. The CBO is considered a nonpartisan research firm, and its findings are being jockeyed across political parties.
From the report, Democrats are quick to point out the 1.3 million Americans that would be lifted out of poverty with the increase, while Republicans point to the same amount who will be out of a job.
But I think the debate misses a bigger point.
It’s not about doubling the minimum wage to lift people out of poverty.
You need to lift them out of poverty with a path to a better job that’s worth a wage increase.
The next thing that concerns me is the impact on workers in mid-tier jobs making average incomes. I’m going to bet these are the jobs at the heart of our economy, especially among small businesses.
According to the city of El Paso’s website, the average income in El Paso County was $37,600 as of first quarter 2018. That comes to about $18 an hour.
How will these jobs stack up against a $15 minimum wage?
Bump down a level to the jobs that still pay double today’s $7.25 minimum wage. These jobs demand experience and skill. What happens here?
Advocates argue everyone will benefit – wages will scale accordingly.
Really? By 100% or even 50%?
It’s naïve to think businesses – especially small businesses – can scale wages without seriously increasing prices. Automation is sounding better and better. Self-checkout, anyone?
I recognize that wages need to keep pace with economic growth. I recognize that we need to get people out of poverty. But I don’t think this Raise the Wage Act is the answer.
Different jobs command different wages. There needs to be room for low-paying menial jobs. But they are not meant to be comfortable. They should be a starting point and incentive to bigger and better. Then, let’s figure out a way that the better really does get better.