Minimum wage debate has the wrong focus

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Republican U.S. Senate candidate Bernie Moreno and his primary opponents all oppose raising the minimum wage. Both Moreno and Matt Dolan believe the minimum wage was never intended to be a living wage. Says who?

Here’s what President Franklin Delano Roosevelt had to say about wages over 90 years ago:

“It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country…and by living wages, I mean more than a bare subsistence level. I mean the wages of decent living.

Ohio’s minimum wage is $10.45 per hour, or $21,736 per year, while the federal poverty level is $20,400 for a family of two and $31,200 for a family of four. What does it take to be self-sustaining in Franklin County, Ohio? According to the Ohio Association of Community Action Agencies, a single adult with one child needs an hourly wage of $23.

Half the workers in metro Columbus earn less than $22.42 an hour.

What are America’s largest employers paying? With 1.5 million employees, Walmart paid an average of $17.50 or roughly $33,000 for a 35-hour average work week in 2023. Kroger, with 430,000 employees, paid the average full-time cashier $17.10 an hour until last year when the average hourly wage was raised to nearly $19, which with benefits factored in, is nearly $25.

JPMortgage Chase Bank pays its tellers an average base salary of $36,831 or roughly $17.31.

Walmart’s net income for 2023 was $11.3 billion. For Kroger, it was $2.16 billion, and for Chase, it was $49.6 billion. Is it naïve to say there’s enough money to pay employees more? When the minimum raise is debated, the wages paid by large employers don’t seem to be part of the argument. Why not?

The debate tends to focus on small business, and business owners don’t like the idea of a mandated wage. Eight out of 10 restaurant owners oppose the proposed constitutional amendment that would increase the minimum wage to $15 an hour in 2026. Ohio Chamber of Commerce CEO Steve Stivers believes that free-market forces, not a ballot  initiative, should determine wages.

Some economists say that raising wages will result in job losses, while others say there will be only a temporary disruption. Trying to square the different viewpoints is no easy matter. What’s bothersome is that the argument against raising the minimum wage seems to be based on an underlying paradigm—one never spoken aloud—that workers must endure low wages for the sake of business owners.

It’s a top-down approach to the economy, much like the debunked trickle-down theory—tax cuts for the wealthy help ordinary workers. And there’s just something fundamentally wrong when people of means—like Moreno and Dolan—tell us what those at the other end of the economic ladder need to accept.

Ponder this: the Government Accountability Office tells us that of the 12 million wage-earning adults enrolled in Medicaid and 9 million wage-earning adults in households receiving food assistance, approximately 70 percent in both programs work full-time hours on a weekly basis and about one-half work full-time annually. Doesn’t this mean employer payrolls are being subsidized by the federal government?

Emily Rose McRae, with the consulting firm Gartner, suggests that employers must “fundamentally rethink their relationship with their workforces.” This means seeing the workforce as a cornerstone of business and recognizing that “if your entire business model is dependent on paying the lowest possible wages and now you can’t pay people enough, you have a problem, you have to adapt.”

Conservatives argue a free market is the best means for determining wages. Maybe. But this bromide doesn’t address the conflict that exists between capitalism and society’s interest in employees receiving sufficient income to be self-sufficient.

Maybe our economic model should be adjusted so that the needs of workers are considered hand-in-hand with the needs of business owners.

[This post was first published in The Columbus Dispatch on April 19, 2024.]

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Jack D’Aurora writes for Considerthisbyjd.com

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Comments

  1. Ed O  April 23, 2024

    Thanks for backing up your argument with some facts. As usual, I’m with you.

    reply

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