Pat Osborn: If you question a $15/hour minimum wage, this is for you


In an ever-growing list of cities, airports, and industries, the call by low-wage employees for a minimum wage of $15/hr is being heard. Yet for some of us, especially those of us that are a little older, the demand just seems outlandish.

This is a Community Voices submission and is moderated but not edited. The opinions expressed by Community Voices contributors are their own and do not necessarily reflect the opinions of the TC Daily Planet.

In the past year or so, I have had hundreds of conversations on this issue. Because of my middle-aged status, many of these conversations have been with others in that age group. To be sure, some of them cannot be convinced, they just parrot talking points secure in the knowledge that the problem is ‘these kids’. If that is your feeling, you can stop reading right now, nothing can convince you.

But for the majority of you, the ones who know that something is seriously out of whack, but just don’t know who (or what) to believe, this is my attempt to put some of the ‘facts’ in perspective. To do this, I have listed the most common statements and, I believe, demonstrate why they aren’t valid.

Here’s the thing, these jobs were never intended for somebody to live on.”

But, here’s really the thing – These low paying jobs are the ones that our economy is creating. That’s the fact, it can’t be denied. When I was young, the largest employers in the world were companies like General Motors, IBM, etc. Today the largest employers are McDonalds, Yum! Foods, and Walmart.

With good intentioned people of a certain age, the problem is we don’t necessarily recognize this fact. We remember starting at a pretty low-wage and in many cases progressing upward. Folks, that isn’t the case anymore. In the last ‘recession’ something on the order of 75% of the jobs lost were middle class, living wage jobs. During this ‘recovery’ the ratio has been inverted – the vast majority of the jobs created have been low-wage jobs.

This misconception is fed by a constant narrative of ‘the economy is improving.’ Leaving the impression that this is a temporary situation and the ‘good jobs’ will come back. But what do they use to give this impression? The stock market at record highs, corporate profits are soaring. Rarely mentioned at the top of business reports is the fact that working peoples’ median income continues to fall.

This kind of reporting creates room for politicians and the super wealthy they represent to state their well-worn positions like, “We don’t have an equality problem, we have an opportunity problem” or “I want everybody to have the chance to be the next Bill Gates.” Almost always followed by the assertion of some policy(s) to improve the profitability of corporations, and nothing for the working person.

When I started out it was hard too, but we didn’t expect it to be handed to us.”

Yes, many of us did have it hard. But the fact of the matter is that it is worse now. Much worse. Take a few examples to put this in perspective.

When we were young, to pay the average month’s rent, a person would have to work 75 hours at the minimum wage. A person in that same position in Minneapolis today has to work 154 hours. Over twice as many hours. Harder? Especially if you think about the fact that there are only about 173 hours in a full-time month.

At about that same time, we could buy around 6 gallons of gasoline for an hour’s pay. Today, that person can purchase 2-3 gallons. Ground Beef was a staple, cheap food when we started out. An hour’s pay could buy around 3 pounds, today around 1 ½ pounds.

See a pattern? I do – the cost of many necessities has doubled, or more, relative to the federal minimum wage since our youth. Looked at this way, does moving from a minimum wage of $7.25 to $15 look so crazy? It seems to me that would simply put the low-wage worker at the same place they were when we were young.

If you want to earn more, you have to go to school, learn, and make yourself more valuable.” Or “Increasing the minimum wage will make young people less likely to go to school.”

This is a big one. I don’t think you can listen to any talk radio show or read any blog, etc. without hearing some variation of this every day. So, it’s not surprising that it comes up in most conversations. Plus, it just makes sense, right?

It fits nicely into the whole American Dream, hard work is rewarded, everything we have been taught to value. But once again, it doesn’t really hold up to analysis.

According to the National Center for Education Statistics, the annual tuition and required fees for a public four-year university for 1977-78 was $655 a year. For the 2011-2012 school year, that same cost is $7,701. University tuition and fees have increased by twelve times! At a minimum wage job in 1977 it took 7 weeks working full-time to pay for a year at a public university. In 2011 you would have to work 243 weeks.

Even if the minimum wage is increased to $15, it would still take nearly twice as many hours to pay for a year at a public university than it did in 1977.

So in terms of cost of education, $15 doesn’t seem like it is outlandish.

Add to this the fact that according to the Bureau of Labor Statistics nearly thirty percent of minimum wage workers have at least some college. That adjunct professors at universities (who make up forty or more percent of the faculty) make poverty wages despite having a Ph.D. What are the odds that if a young person manages to go to school that they will make enough to see a real gain?

Raising the wage causes costs to rise, so those people aren’t any better off anyway.”

Now this one you can’t argue with, it is just plain logic and you can intuitively see that it has to be true. Or, maybe not so much.

Interesting, CEOs, corporations and many politicians spew this out every time workers start to demand a raise. But somehow the costs of simply absurd executive compensation and outlandish profits shown by the multi-national corporations never seem to be exposed to this criticism. Is CEO pay and investor profit paid with some kind of magic money that doesn’t impact the price of products?

Since 1977, the minimum wage has roughly tripled (from $2.30 to $7.25) and median income for all working people has continued to fall.

Contrast that with CEO compensation – in 1977 CEO compensation equaled around 20 times that of the average worker. This past year CEO compensation equals 331 times the average worker compensation.

Years ago, my father-in-law used to tell me, “it’s the high cost of profits.”

Small businesses just can’t afford this.”

The best data available seems to show that higher wages paid to working people in the community will be spent by those people in the community. If more people can afford to buy your product, you can sell more, that tends to balance out the increase cost in wages.

Look at who funds the opposition to this movement – major corporations like McDonald’s, Yum! Brands, Starbucks, Walmart, etc. Huge multi-national corporations that spend most of their days driving small business owners out of the market. But suddenly they are champions of the mom and pop shops?

We have been handing the hugely profitable, immense corporations handouts in the form of direct/indirect subsidies, tax breaks, etc. This puts working class business owners at a severe competitive disadvantage. Owners of true small business are, in fact, part of the working class and are suffering from the same malaise as everyone else. How can you succeed when your customer base has no money and your corporate competitors are getting the handouts?

Raising wages will cost jobs, people will be replaced by technology, robots, etc.”

The corporate pundits and economists love to use this one, but think about what they are really telling us. PEOPLE are every bit as expendable as machines and tools. They are saying humans are just another tool or commodity, you use it and then throw it away if you find something cheaper. Do you agree with that?

By the way, median wages have been falling, minimum wage hasn’t kept pace with costs and we still have lost jobs to technology and automation.

In the 70s, we were told that automation in the workplace, etc. was going to be a boon and It has been to the super-rich. But the benefit never ‘trickled down’ to most of us. If the benefits of workplace technological improvements had reached working people, we would all be working less hours, everyone would be employed, and we would all have more money. Instead unheard of wealth and profits have been accumulated by a very few, and they are in the process of disposing of the rest of us.

Just over 2 years ago a few brave fast food workers walked off their job for a day and first uttered the call for $15 an hour. That statement was almost universally ridiculed by the commentators, pundits, analysts, etc.

Since then, millions of working people have seen that it isn’t ridiculous, that there is no reason that the people working and actually generating the huge profits should not share in those profits.

They have risen up as a group and organized themselves independently of the traditional power structures to push forward the demand. They have won major victories in SeaTac and Seattle, and are waging battles in other cities and airports across the country, with very real opportunities to win them. They have created a situation where even many of the same multi-national corporations that have refused to pay decent wages for years are starting to talk about raising the wage, in an effort to see how little they can return to the workers and quell the rising movement.

If the working people continue in this struggle, and keep learning the lessons it has to teach, there is no limit to the other issues that can be solved by the same methods. To me, this is a true ‘pull yourself up by the boot-straps’ story that paves the way to a better life for our children and grandchildren.

Justice, solidarity, peace.