News & Views‌

Minimum wages and minimum ethics?

March 20, 2017 - 12:00am
UNIBusiness Editor
minimum wage

The current national minimum wage is $7.25. Many people claim that this is not a "living wage," although the reality is there are workers earning such a wage and sending money back home to their families. These workers endure unenviable lives, often living with four or six workers in a two-bedroom apartment and eating bland meals. The ethical issue is whether we have a duty to raise wages for low-wage workers.

There are well-worn arguments (which does not make them any less true for being well-worn) against raising the minimum wage. These arguments include that raising the minimum wage may result in people losing their jobs or employers not creating new jobs; that many, if not most, workers earning the minimum wage are not the primary breadwinner for their families; and that persistently high unemployment rates among African-American youth may be a result of the minimum wage‘s passage decades ago.

Aside from these arguments, rank hypocrisy is involved in the minimum wage discussion. Years ago, when then Speaker-of-the-House Nancy Pelosi was pushing hard to raise the minimum wage, researchers discovered in the fine print that Pelosi was trying to exempt employers in American Samoa from the proposed increase. How is Pelosi associated with American Samoa? It turns out that several tuna canneries have headquarters in Pelosi‘s congressional district; they operated canneries in American Samoan. These cannery owners undoubtedly persuaded Pelosi of the rightness of their cause, although campaign donations often heighten the rightness of a cause. Republicans, too, insert similar clauses protecting favored individuals.

There are some vulnerable groups of Americans who are not covered by the minimum wage. When such legislation was passed decades ago, southern legislators made sure that the legislation did not apply to farm workers. In order to secure votes of southern Democrats, President Roosevelt and northern legislators (Republican and Democrat) had to acquiesce to such demands. Once the southern planters mechanized planting and harvesting, they often cast their workers adrift. Their opposition to the minimum wage (and to social security) then evaporated.

Currently, non-profit organizations are permitted to pay their workers with disabilities wages well below the minimum wage. News stories abound of Goodwill, Salvation Army, and other charities employing disabled workers in their stores and warehouses and paying these workers only a few dollars per hour. The CEOs of such non-profit entities assert that they cannot afford to pay $7.25 an hour to severely challenged workers. No doubt their argument is correct, but for-profit employers do not get to use the same argument.

But why should non-profits be allowed to pay below the minimum wage? Just because an entity is "doing good" should not mean it gets special dispensation.

For-profit employers would probably hire many more workers, if they could pay less than $7.25 per hour. If you watch a movie from the 1940s depicting contemporary America, for instance, there were elevator operators, hat-check "girls", and other unskilled workers. These workers were paid low wages, because the services they offered were not particularly valuable for the customers or for the employers. Between the minimum wage and rising labor productivity, such jobs disappeared (and so did staple characters in various detective movies). In China and other countries, one often sees listless workers sweeping streets with bamboo brooms; the brooms are not particularly effective, but I suspect the workers are paid by the government. Presumably they are not paid much, since the value of their services is low.

Prison inmates are another group being paid wages way below the minimum wage. Some of these inmates may be productive enough to justify $7.25 per hour. What are the justifications for paying prisoners dimes or quarters per hour? Because they are receiving room and board? Because they have committed crimes? What if some inmates are innocent?

The minimum wage, therefore, raises troubling questions. Why do we permit over-riding employer‘s and employee‘s rights to freely contract with regard to wages and job conditions? Why don‘t we cover some of the most vulnerable workers? Since the minimum wage hurts some low-skilled workers, is it just to benefit other workers at these low-skilled workers‘ expense?

The views and opinions expressed are those of the author and do not imply endorsement by the University of Northern Iowa.

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UNI Business

UNIBusiness Editor

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Comments

Submitted by Hunter Dark on
I think the minimum wage will always be a subject that is debated. I always hear people say $7.25 is not a livable wage. If taxes are 25% of your income, that comes out to $435 for two weeks. I pay $335 for rent a month. That gives me $535 after rent for the month. I would say that is "livable" but not sustainable. That really gives you no money for savings, or other expenses that are not required but strongly suggested. Like the article said, the person making minimum wage is probably not the main money-maker in the home. That is a good thing, and hopefully the family does not have many kids to take care of. I heard someone say the minimum wage should be raised too $15 and to me, that is quite high. That doubles the current wage, and many companies cannot afford that. I would say the minimum wage should be raised, however employees should be prepared to do more work at their current jobs since they will most likely get more duties put onto them.

Submitted by Brooke Miller on
Minimum wage is something that will always be disagreed upon. After reading the book Nickel and Dimed, my view on minimum wage has been challenged. $7.25 an hour is not sustainable. People that live on these low-wage jobs struggle to afford housing, groceries, healthcare, etc. However I realize that raising minimum wage will have an impact on other things. It will only raise prices of the products and services that companies offer. I don't know what the solution to minimum wage is, but I know that it is not possible to live off of $7.25/hr especially for a family.

Submitted by Katelyn Kramer on
I agree with the fact that 7.25 for minimum wage is too low because it is not sustainable to live on, but it also depends what job you are doing. I think that they could raise the minimum wage but then they would have to look at the jobs and the ones with more work would have to be raised as well. For example, fast food places and CNA jobs all make under $15 so if they were to raise the minimum wage both these jobs would go to $15. This would not be fair considering CNA's have to put more work into their job and nursing homes are not able to close they need people working all night. Therefore, they would have to look at this and raise CNA's wage to more than $15 an hour to be fair. I also think that it is controversial because even if they raise minimum wage there will be price inflation and it will just raise the prices of the everyday things that people buy, so therefore it wouldn't help to raise it because you'd be spending more.

Submitted by Molly Mingus on
As a economics major, I recognize the detrimental effects of increasing the minimum wage. I think what many people get confused by, is that a minimum wage job is not supposed to be a living wage. The industries and individuals who are working in positions that pay the minimum wage are not primary providers, and are often teenagers still in high school. It is absolutely shocking to me that there are people who work in fast food industries that are expecting to get paid $12-15 an hour while there are many other industries who do not get paid nearly what they deserve. Teachers, policemen, firefighters, etc who put their lives behind those of others and are some of the lowest paid of all industries. We are fortunate enough to live in a country where opportunity is endless and there are a plethora of jobs that require no degree and pay higher than the minimum wage. What happens when we increase the minimum wage to a point where everyone begins to work in these low-skilled job because they can earn just as much as someone who is highly skilled? It is no different than the position the US is in now, where many people make more unemployed as they do working full time. Why would you go back to work when you make even more sitting on the couch? Why would you risk your life, or go to school when you can work a low-skill job for about the same? Minimum wage is to protect the workers, not to provide for them in the long run.

Submitted by Ashley Goebel on
The minimum wage will always be argued about. I read the book Nickle and Dimed, which I can relate to this article. The problem with minimum wages is that living expenses are much higher in some places than others. I think that $7.25 is enough for someone who lives in Iowa but would be considerably hard for someone who lives in places like New York, California, etc. You also have to take into account that moneymaker of the household isn't typically the one making minimum wage and that minimum wage isn't supposed to be a livable wage either. Another factor is that if you raise the minimum wage is that everything will rise with it, like groceries, gas, and more.