It’s not minimum wage, it’s living wage — but don’t amend the constitution

REUTERS
Let's set a clear floor with a livable wage and then let the business models adjust to that.

Republican Andy Brehm put together a refutation of the Anzelc Minimum Wage Constitutional Amendment via Community Voices in Minnpost.

Let me first say that I oppose the Anzelc amendment as well, but for a very different reason, which I’ll discuss in a minute.

But first of all, Brehm continues this argument that raising the minimum wage hurts low wage workers by eliminating those type of jobs.

Contrary to prevailing DFL demagoguery, opposition to minimum-wage laws is not grounded in the desire to see the rich richer and the poor poorer. It stems from a basic, common-sense understanding that higher minimum wages set by government instead of the free market limit job opportunities for workers in need of them most and harm the economy as a whole.

Outside of extremely isolated cases, the free market would send wages to rock bottom levels. Business does not care about “living” wages — only about more profits. It would be easy to criticize that except for the fact that contrary to Supreme Court rhetoric, businesses are NOT people. And the actual persons who run businesses have to answer to shareholders or partners. 

Business will not look out for workers making an actual living — that must come from the collective. And sorry, that means the government.

Brehm and his Republican colleagues have used this free market argument for years. It only works in extraordinarily isolated instances where there is a severe shortage of workers, i.e. like North Dakota which Brehm cites. North Dakota has such a low population that goods and services must pay a premium to get more people involved.

But like every free market situation like this, the North Dakota situation will eventually be resolved in favor of business lowering wages, as more workers uproot themselves to meet the demand or more automation removes the need.

Business not only exploits wages for low skilled workers, it also exploits the government remedy — the safety net. Rather than giving these workers the benefits and job structure that can help them in their daily lives, business relies on worker poverty status to force the government to fix that situation for them. Increasing business profits at the expense of all the rest of us, even if we, the people, have no interest in that business ourselves.

Brehm continues the argument of business as victim:

Some assume employers simply absorb government-imposed increased labor costs in the form of lower profits. But this is not an option for most small businesses and industries that operate in a world of razor-thin margins. What decades of economic research shows is that their bottom lines demand that they react by cutting hiring, reducing work hours and benefits and, if possible, raising prices — all of which hurt Minnesota workers and its economy.

If a business uses a model dependent upon margins that can only exist by putting workers into poverty, then can’t we say that this a pretty poor business model? And let’s be clear, the vast majority of minimum wage jobs come from behemoth corporations like McDonalds, Wal-Mart, Target, Chick-Fil-A, etc, that will be able to absorb minimum wage increases but prefer to wait to be forced to do so by government mandate.

Yes, truly small business start ups can be affected detrimentally by minimum wage increases — but adjustments can be made for these start-ups. A two tiered minimum can be debated. But let’s also try to set a clear floor with a livable wage — and then let the business models adjust to that.

Minimum wage has been a joke in regards to inflation. Business will always fight a mandate on wages — worker exploitation is too much of a temptation in a system that only believes in the bottom line. It is up to the rest of us — the voters of this country to assure fairness in wages.

But, as I said above, I, personally, do not favor Anzelc’s initiative to put a $10.00 minimum wage with inflation adjustments into the MN Constitution.

Here’s why.

A Constitutional amendment would make the $10.00 minimum wage a focal or reference point. It is already outdated as a livable minimum. We are so far behind the “livable” aspect that I’m not sure even $15.00 per hour would cut it.

But if that amendment passed, businesses would use that $10.00 figure as their idea of a starting negotiation point. Even with inflation adjustments in the mix, the calculations would still be subject to argument.

If that amendment passes, the $10.00 per hour figure will have little future significance. At some point inflation will leave that figure in the dust, because ultimately it is not the number but the purchasing power that matters.

If we have an opportunity to seriously move on the minimum wage, then make a living wage really count. Business will complain — as they always do — but then they will adjust.

That is the real nature of the free market.

This post was written David Mindeman and originally published on mnpACT! Progressive Political Blog. Follow Dave on Twitter: @newtbuster.

If you blog and would like your work considered for Minnesota Blog Cabin, please submit our registration form.

Comments (3)

  1. Submitted by Richard Steuland on 11/27/2013 - 07:05 pm.

    Humorous arguments against fair wages

    Problem is that too many of these talking heads are sponsored by the very interests that don’t want to pay decent livable wages. In Seatac Washington an amendment that raises the minimum wage to $15.00 per hour passed narrowly. However, a front group funded by the Koch Bros. Is demanding a recount of the vote. This group will pay for a recount rather than advocate a living wage. The greed that these people reveal is shameful. How many billions do these Koch and Walton’s and others like them need?

  2. Submitted by Blake Lerum on 12/03/2013 - 09:52 am.

    Changing min wage is stupid

    If these people that are making minimum wage are not happy with there checks then maybe they should’ve went to college or maybe even graduated from high school! Minimum wage is fine. If we raised minimum wage then think about how much other things would cost. Such as a burger and fries and a drink. Right now it’s about $5 at Mcdonalds. Take a second to think about the inflation that this would cause. The price of everything would rise since companies would have to pay there employees more. Therefore this wouldnt just affect the workers, it would affect all of us. That is why it would be ridiculous to raise minimum wage prices.

  3. Submitted by Nicole Hoy on 12/06/2013 - 01:39 pm.

    Response to Blake

    I just want to point out that going to college is not a right. High school is paid for by the tax payers. College is not. College isn’t free and it is actually quite expensive. So before judging those who work in minimum wage jobs, try doing it.

    I know people who work at Best Buy, Walmart, and McDonalds who have college degrees but can’t get work in their field. So how is it fair to them that even though they DID go to college, they can’t find work in their field and are taking anything they can get to make money.

    Before judging and saying stuff like that, try doing some research first.

Leave a Reply