We Don't Need a "Minimum Wage." We Need a "Livable Wage"
Maybe we're thinking about $15/hour all wrong ...
Publisher’s Riff
As he becomes president, Joe Biden is pushing hard for a bigger minimum wage. In addition to a bigger “stimulus payment” of $2,000 (which might really just amount to 70 percent of that), some added bonus for households with kids and a range of aid in other places, Biden believes raising the federal minimum wage to $15/hour should be the trick to reviving an economy nearly beaten into submission by the coronavirus pandemic.
Of course, critics - from Republicans to the business lobbies they’re still in league with - don’t like the sound of that. Even as we’re seeing a number of companies beginning to embrace a $15/hr wage, there is still stubborn resistance to the thought of a federal or nationwide $15/hr minimum wage setting the standard. Even before the pandemic, when the economy was running fairly smoothly, Senate Majority Leader Mitch McConnell (R-KY) [soon-to-be Minority Leader], made sure to block House Democrats’ passage of a minimum-wage increase in 2019. The general complaint: more money for wages means less money for companies, thus fewer people hired. The problem with that logic is that an economy built overwhelmingly on consumer activity ends up imploding if there are no paid consumers to buy into it. Where exactly do “free market” capitalists expect Americans to get the money they need to buy their stuff from? Just have the government pay people “Universal Basic Income?” But, they don’t like that either.
With the Senate split in half and Vice President Kamala Harris acting as tie-breaker, the battle over minimum wage promises to get epic. It will be interesting to see if the business lobby will forgo concerns over the attack on the U.S. Capitol in a bid to combine forces with Republicans on the minimum wage.
But, as Biden now forces this debate to jump into full public view, people are beginning to realize that $15/hour is not really enough to live on. Now it’s out: $15/yr for 40 hours of work is about $31,200 annually - and that’s before taxes. As the Economic Policy Institute’s “family budget calculator” shows us, not even one adult living alone in the Philadelphia, PA metropolitan area (as an example, so we can include Biden’s hometown of Wilmington, DE) can manage on that …
Now imagine being a single adult with two children …
All these years and all that mileage spent on a $15/hour wage and many failed to realize that maybe we shouldn’t be aiming for a minimum wage - we should be demanding or ensuring a livable wage.
Can $15/hour, by the time it’s a national standard, really keep up with rising costs of living? It doesn’t seem that way. Pre-pandemic, a GOBankingRates survey in 2018 found a growing share of Americans increasingly squeezed by the rising cost in living, citing that as the culprit for why they couldn’t save money …
A little over a year later, February 2020, a TD Ameritrade survey found nearly half of Americans feeling that way - which, honestly, is probably a lot more accurate reflection on public sentiment than the GOBankingRates. At that time last year, cost of living had increased by more than 2 percent from the previous year …
CPI - the increasing cost of everything - continued to grow another 1.4 percent during 2020, not even trying to slow down for pandemic …
We’re thinking about this all wrong. The focus shouldn’t be on a minimum wage. We need to understand what it take to actually live without that magnitude of struggle. Is a $15/hour minimum wage really sustainable for the people who make it?