At Work

Earning the minimum wage is not living in “poverty”

Sanders makes it quite clear; we must raise the minimum wage to get people out of poverty, to earn a decent living. Sounds pretty good and like most of what he says and the figures he sites, he is wrong and decidedly one dimensional. 

The current minimum wage is the equivalent to $15,080 per year, almost $4,000 above the federal poverty guideline. If a married couple were both minimum wage workers that would be $30,160; above the poverty guideline for a family of five

Now you may say that’s not accurate, most minimum wage workers don’t work full-time … and you would be right and they are not married and not heads of households and not primary breadwinners .. and that too is the information left out of the Sanders misleading rhetoric. 

Let’s raise the minimum wage to $15.00 an hour or $31,200 a year; $62,400 a couple; an amount above the median household income of $53,657 and close the the median family income of $65,910. 

So, where are we going with all this? Good question. Does anyone waiving the banner for a $15.00 minimum wage know? I doubt it? 

I’m guessing we will raise the poverty guidelines and in the process eliminate many people from being qualified for various government benefits (or simply adjust eligibility and get nowhere). We will also raise the rates of pay for workers currently earning anything above the current minimum wage of $7.25. As a result of all this, prices must rise as a consequence of higher expenses for all employers and from higher demand. 

  
There is another way to describe all this. The lowest skilled, uneducated workers in America who stay in minimum wage jobs will do nothing more than tread water. 

  

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4 replies »

  1. If we could eliminate poverty by raising the minimum wage, then we shouldn’t stop at at $15.00 per hour. If a minimum wage increase has no impact on the number of hours an employer will “buy” from a worker, then we should raise it to $20.00 an hour or $25.00 and make everyone middle-class. The $15.00 minimum wage movement underscores how millions of Americans do not understand basic economic principles. You can’t legislate people out of poverty.

    The best way for workers to earn $15 per hour (or more) is to increase their productivity through education and training.

    I wrote a short post (500 words) called β€œHow a $15 Minimum Wage Creates Winners and Losers.” If you would like to read it, I am open to any helpful feedback: https://christopherjohnlindsay.wordpress.com/2016/04/10/minimum-wage/

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    • Chris, the problem with saying you can gain productivity through education and training is there may only be so many higher paying positions in the company that you work for, or in the city where you live. Most minimum wage jobs are part time, so unless you can find 2 or 3 jobs, you are living in poverty. Just because the minimum wage is increased does not mean people will lose their jobs or get less hours. The fast food store may just have to raise prices 10% across all menu items to cover the increase.
      When Montana voters passed the minimum wage law in 2007 all the business owners were on TV saying it would cost jobs and cause businesses to close their doors. IT DID NOT HAPPEN! Minimum wage is now $8.05 per hour and I have seen more new places open in my city of 60,000 in the last 8 years, than in the 10 years before the minimum wage law was passed.
      If a business wants to make money they have to manage all of their costs to stay competitive, not just labor.
      The market place always creates winners and losers when companies open and close all the time, but without some kind of minimum wage people just entering the workforce would be taken advantage of by employers.
      Dose minimum wage need to be $15 everywhere across the U.S.? NO only in high cost of living areas, but it should be at least $10 and indexed to inflation to help out all workers. Not just the CEO’s.

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      • Hi Jratt, I came across this article that I hope you might find of interest: “The federal poverty level for a working adult is $11,880 in 2016 according to the United States Department of Health and Human Services. At $7.25 per hour a minimum wage workers earns $15,080 per year, which is already greater than the federally determined poverty level. If the worker’s pay jumps to $15, yearly earnings would move to $31,200 per year for a 40-hour week. From a mathematical and logical perspective, increasing the minimum wage does not lift anyone out of poverty because the prior minimum wage already paid more than the official poverty rate.” http://www.investopedia.com/articles/07/minimum_wage.asp

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      • Did you miss my point in my second sentence???, most people working for minimum wage in retail and fast food, do not get 40 hours per week. When I graduated high school in 1974, I got a job loading trucks for Gallo Wine in Commerce, CA for $9.10 per hour, no skills, just a strong back to work those 12 hour shifts. Minimum wage was $2 and there were plenty of jobs paying $2.85 per hour = $12.60, today. If the economy is doing so good after the recession why is the Federal minimum wage still at $7.50? Record corporate profits, record low wages for the average worker.

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