Thursday, August 1, 2013

Living Wage

There is a debate going on in this country about “living wages.” The wages aren’t all that living, but they would be better than what we have now, raising the national base rate from seven-something-per-hour to fifteen-per-hour.

The primary argument against it is that it potentially could cost jobs. The reality is that it has minimal effect and would probably have no effect if were uniformly applied nationally. Everybody’s boat is equally raised and the same number of jobs are required to keep the economy running, so the net effect is no job loss. What there is instead, is inflation as prices are raised so that the net income percentage of the owners remains the same. The long run solution, of course, is not to raise the minimum but lower the maximum. Oh, that’s right, we don’t have a cap. The American economic theory is that, if one doesn’t have the sky as the limit, there’s no incentive to create anything.

The conservative solution to low wages that I’ve heard several times—most recently from David Newmark on BBC radio—is to increase training.

Now, it doesn’t bother me if such a nonsensical solution is put forward, but it does bother me that the interviewer didn’t question it. That solution doesn’t address the issue being discussed, at all. By Mr. Newmark’s logic, if, say, a fry cook at McDonald’s were to go out and take a couple courses in computer programing, McDonald’s would automatically raise his or her wages. That’s all Newmark suggested was necessary; he said that fry cooks at McDonald’s don’t receive enough money because they aren’t highly trained; he didn’t suggest that the training should be in being a great fry cook or in being anything else, simply that more training was needed in order for wages to be raised.

Without putting words in Newmark’s mouth, I’m guessing that what he meant was, if this fry cook at Mickey-D’s, got trained as, say, a computer programer, he or she might be able to qualify for a better job. Which could well be true, but that’s not what the issue is; the issue is the wages of fry cooks at McDonald’s, not how to get people out of being fry cooks at McDonald’s. The argument is that fry cooks at McDonald’s should receive a living wage just like anyone else.

Well, Jesus, what a radical idea is that? What’s more important: an apartment in Dubai or that fry cook having enough money to feed his or her baby? Dubai, all the way, baby.

But if you’re interviewing one of these guys, nail him to the cross, okay? The issue is not pitiful wages, the issue is income disparity.


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