March, 2005

I know all the arguments; that it’s only kids getting it, an increase will lose jobs and no one actually lives on minimum wages.

The arguments are wrong. According to The Heritage Foundation;

• "One-half are teenagers or young adults under the age of 23.” That tells me that trying to get started in life when you’re already a third of the way through it is pretty grim on $5.15 an hour.
• “Two-thirds of these young workers live in families with incomes two or more times the official poverty level for their family size.” That’s two thirds of the one half, which is one third. Let’s keep the figures honest and this figure doesn’t address the issue of how to leave that family when you’re only making five an hour.
• “Just 14 percent live in poor families.” Great! Someone in the family must be making a decent wage.
• “Almost 74 percent are enrolled in either high school or college.” Ever try to carry full course credits and pay for college at $5.15?
• “Just 5 percent are married.” The gutsy 5%, ‘cause how you gonna do it on five bucks?
• “Over 88 percent live in families with an average income of almost $63,600 per year.” Whoa now. Is that 88% of the 50%? Otherwise, I just don’t believe it. As Bill Clinton might have said, “Define family.”
• “The average income for single young workers is $10,000, but their average household income is $47,100 because 81 percent live with two or more people." I love these percentages. And if you stuff enough poor people into one shack, the ‘household’ income soars.

Approximately 83 percent of workers earning minimum wage are single and 60 percent are female. Your eyes are glazing over with percentages. I don’t blame you.

Maryland is upping the minimum wage a buck. (Pause for applause or boos) A number of states have taken off on their own on this issue because the national figures are so embarrassing. In Santa Cruz, California the minimum is $12 . . . those crazy Californians, what will they think of next. Even so, a Maryland Delegate in the issue at hand complained that the increase would cost Maryland small business $67 million next year in wages and taxes. Of course he could have said that the bill would increase business income within the state next year by $67 million because I doubt much of that additional paycheck will disappear into the stock market. It’s going to be spent on food, clothes for the kids and maybe a little newer used car. All consumables, all spent within the state, because the poor don’t travel all that much.

Henry Ford caught the same kind of flack from whatever served as The Heritage Foundation in 1914, as well as from his industrial baron friends, proving that some lessons are never learned. Henry saw all those Model-T’s coming off his assembly lines and wondered who would be able to buy them. He’d made an inexpensive car and the rich were buying Pierce Arrows. It seemed to him that with $5 a day jingling in their pockets, his factory workers could pony up $200 for one of his cars and so it turned out. Instead of the ruination of the Ford Motor Company, Henry’s five bucks lit the fuse of the consumer revolution that took America to untold heights.*

Today, we have 40 million Americans living in poverty. In average households of four, that’s ten million refrigerators that can’t be bought, five million automobiles unpurchased, a couple hundred million pairs of pants gone begging and an equal number of coats or skirts or pairs of shoes. Argue with the numbers, pick on this or that choice to make your point, but the fact still remains that wages in America at that level go directly back into the business cycle.

By crippling forty million of our neighbors senselessly and needlessly we simply shovel sand into the engines of productivity.

Henry was right ninety-one years ago.

*Now don't write me about Henry's sneaky morals police, his strike breakers or his fascination with Hitler . . . I know all that dark side . . . we're talking about an economic result of paying workers better wages.

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