Minimum Wage = False Economy

I ran across an editorial in The Tennessean (colorfully known

to us non-liberal Tennessee residents as "Pravda on the

Cumberland") by Molly Secours.  The Tennessean wants me to

buy an archive of the article now that it has been a few weeks,

but being an enterprising Googler, I have found it on another

site.  This story struck me on several levels.  Being a dad,

I know kids sometimes don't understand the prices of things

and can ask for a lot more than is financially possible to

give them.  I have also been at the extreme low end of the

earning spectrum.  I worked my way through college after

having my first child.  I was making $5.00/hour when minimum

wage was $4.25/hour, so I have been in this father's shoes.

Except for one thing, this father is in his late thirties,

not early 20's.  I recognized my situation as being untenable

and did something about it.  Anyway, I'm sharing both the link

and a copy of the email I sent to Ms. Secours (below the link).

I have not received a response from her.



http://www.zmag.org/sustainers/content/2004-10/29secours.cfm



[My email to her]

Ms. Secours,



I read you editorial about the overworked father in "The

Tennessean".  It is strange to me that you felt sorry

for the father in this situation.  I cannot imagine speaking to

my children in that way. Two years ago, I was out of work

for 3 months.  To make matter worse, I worked the entire

month of November 2002 before the lay off and didn't get paid

for it because the company I worked for ran out of money.

My two boys still came over every weekend and most of the time,

I didn't have the money to rent a movie, much less take them

to the theater. But I never spoke to them the way this father

did.  We played a lot of board games, went to the library and,

weather permitting, the park. I just can't imagine telling one

of my children I don't have time for them.



I imagine this father (I just can't call him a "dad") is very

frustrated.  I can imagine being in my late 30's and only

making $6.85 an hour would make me angry at the world.  But

it is not the world's fault that he is in that situation. He

has had 20 years to obtain and develop a more valuable skill

than changing the oil in a car, something which a lot of us

do ourselves at home.  I know several auto mechanics who earn

a very nice living.  Perhaps if he expanded his automotive

skills his paycheck would increase.



The point of the article was to support an increase in the

minimum wage.  Your argument was this father makes $6.85 per

hour and can't afford to take his son to the movies.  Minimum

wage is now $5.15 per hour, so he makes $1.70 over minimum

wage.  Let us assume that if the minimu wage is increased,

his pay will remain the same amount over the minimum, which

would be $8.70 per hour.  He would only have to work 47 hours

to make the same amount.  So he has an extra day to take his

son to the movies.  That sounds wonderful.  And it would be for

about 6 months, then the cost of the movies would rise because

the theater workers make minimum wage. Also, the family's

grocery costs are going to rise because all those grocery store

employees just got more expensive.  In fact, all prices will go

up, completely negating his increase.  The goods and services

purchased by the lower income families are provided by minimum

or close to minimum wage employees.  He will be back working 7

days a week within a year.  Minimum wage isn't the answer to

this man's problems, a skilled job is.   Historically, prices

increase after minimum wage increases.  Minimum wage only

creates a false economy.



Another thing that would help lower income workers would be

to reduce or completely repeal the FICA taxes.  This takes

7.5% of their pay, plus the employer has to pay 7.5%  also.

An extra 15% of his paycheck would go a long way, and it

wouldn't increase prices, because it doesn't cost the employer

anything.



It is easy to appeal to people's emotions and try to sell a

minimum wage increase, but it is not an emotional issue, it

is an economic one.  A minimum wage does not improve a

worker's financial position, except in the short term.  But

our society only looks at the short term.



Thank you,



Jeff XXXXXXXX