$5.85–Thank God I’m Alive

Financial Justice Ideas and Issues Personal Writings

New Orleans On July 1st the federal minimum wage finally rose to $5.85 per hour. After 10 long years, the lowest wage workers in the country got a 70 cent raise. This is the first of several steps up the ladder that will put workers up to $7.25 over the next two years (July 1, 2009). The overall impact will be an increase of almost 40% compared to two weeks ago. Couple this with the fact that many states and some city jurisdictions are set to an escalator to the federal minimum wage and the results magnify to millions and millions of workers.

This would seem all good!

I read a weird op-ed piece in the Wall Street Journal that seemed to argue all sides of this question as written by Professor Schiller at American University in Washington.

First, it seemed important to him whether there were a half-million immediate and direct beneficiaries or whether there were 2 million. At one level he argued that a half-million was chump change compared to the number of workers in the economy, but if that was true then why not be fair if the results are so meager? Further, he seemed to not understand that since so many states have other minimum wages that the results of any federal increase are immediately — and directly — magnified many times. The number in fact greatly exceeds 2 million workers.

Secondly, he seemed to rest his case, somewhat bizarrely, on the fact that there were 1.5 million workers who were uncovered by the federal minimum wage, therefore making LESS than $5.15 or $5.85. Partly he just plain mistakes the facts. He includes tipped employees as people allowed to make less than the federal minimum wage and in fact the whole point of the “tip credit” is to count (no matter how unjustly) tips along with the tipped minimum so that the worker makes in excess of the federal level. That hardly establishes these workers as paid below the minimum. He cites charitable organizations, and once again he errs there because he is not talking about charitable organizations classified as tax exempt, but rather some smaller numbers that actually work for churches is some categories where specific institutions have elected to not be covered. Farm workers are indeed exempt, but are covered by some states (including California, which is the largest farm state), and once again farm labor is not the huge employer it once was and given the labor shortages, wages have been forced up there as well. He lists Samoan laborers, and frankly, I had to hand it to the professor, that one was new to me.

So, what was his point? Too few got raised? Then why fight it? A larger number were getting screwed? Then why not fix it?

His point seemed to be to slap at politicians “proclaiming how they helped the poor, low-income worker.” In the standard fare of “on one hand” and then “on the other hand” in blaming both sides for god knows what, he seems to have cooked up some very thin and questionable gruel.

Somehow it really is all right even for politicians to help the poor, low-income worker, and though Professor Schiller may have hoped to make some other case, it was hard not to read his piece and not wonder why everyone is not doing more?