Minimum Wage Lies: Top 5 Lame Excuses For Not Paying You More

Minimum wage lies: Top 5 excuses for not paying you more. Photo of Pinocchio.

Corporations and the rich have been lying about the minimum wage for decades. We take the top five myths about ending slave wages and lay them bare. Photo of Pinocchio by Tristan Schmurr, cc Flickr 2013.

When I was young, I was taught, “A fair day’s work for a fair day’s wage.” I could work a 40 hour week and make a decent living. I could even raise a family, send my kids to college and still look forward to retiring someday. But since trickle down economics, multiple recessions, the housing bubble, special treatment of banks ‘too big to fail’ and other corporate rot, that’s all gone. The jobs that are now available require I work two of them so I can default on a mortgage, apply for food assistance and deny my children the opportunity for a higher education. Meanwhile, the lazy rich help themselves to the fruits of my labor and produce nothing. Somehow, though, this is my fault.

The reality is that corporate America has stopped paying their workers for their work. Productivity is way up but wages are stagnant. Does that sound like the America you grew up believing in? It certainly doesn’t to me. The obvious solution is for corporate America to pay a fair minimum wage but the right finds the idea of this simple fix horrifying. When asked, those on the right use canned responses to explain why you don’t, and shouldn’t, make a living wage. Here are the top 5 “reasons” and why they’re completely wrong.

(1) Raising The Minimum Wage Will Cost Jobs

The biggest lie. Several studies have shown that increasing the minimum wage reduces turnover, increases spending and increases demand. These studies have all come to the conclusion that raising the wage has a negligible effect one way or another on job creation.

U.S. experience, it turns out, offers many ‘natural experiments’ here, in which one state raises its minimum wage while others do not. And while there are dissenters, as there always are, the great preponderance of the evidence from these natural experiments points to little if any negative effect of minimum wage increases on employment. – Paul Krugman

Does giving an increase really cost jobs? No. It seems that the real “problem” with an increase is that it affects profit margins. We, as a country, can more than afford increases on the minimum wage at the cost of a wage decrease on those earning the maximum. In other words, millions of poor workers can make more if millionaires and billionaires lose a tiny fraction of their yearly income. Clearly, you can see why corporate America is allergic to this idea. Sacrifce a third yacht so millions of people don’t have to use food stamps to survive? Blasphemy!

(2) Raising The Minimum Wage Only Helps Young Workers

Categorically false. The majority of minimum wage workers are, in fact, 20 years of age or older. 76% to quote CNN Money, who took their statistics from the Department of Labor and the Bureau of Labor Statistics. Sadly, almost two-thirds of these adults working for minimum wage are women. Far too many of them being single mothers. Additionally, and even more surprising, 41% of all minimum wage workers are college educated to some degree. Many of these are people with college debt. And they’re only making minimum wage. The misleading statistic often quoted by conservatives is that the highest percentage of workers making minimum wage for their age demographic is young workers 16-19 yrs. of age. Surprise. New to the workforce, teenagers make less. 25% of teens 16-19 make the federal minimum. That does not mean most minimum wage workers are teens. But it’s a nice way of confusing the issue to hide the truth: Raising the minimum wage will benefit adults far more than it will teens.

(3) Raising The Minimum Wage Will Hurt Small Businesses

This is a variation on “Will cost jobs” and is just as untrue. Any business that is running so close to being unprofitable that an increase of the minimum wage would bankrupt it is already failing as a venture. But, unsurprisingly, small business owners are smarter and less greedy than the corporate shills in the GOP. When polled over the effects of raising the minimum wage, two-thirds of them agreed that:

“Increasing the minimum wage will help the economy because the people with the lowest incomes are the most likely to spend any pay increases buying necessities they could not afford before, which will boost sales at businesses. This will increase the customer demand that businesses need to retain or hire more employees.”

The GOP claims to represent small business owners. But the bottom line is that 85% of them pay their employees more than the federal minimum wage already. Just to be clear, only 18 states have a minimum wage set higher than federal law yet 85% of ALL small businesses pay more anyway. Obviously, this is not hurting small businesses in the slightest.

(4) Raising The Minimum Wage Will Hurt The Economy

That’s quite the lie. As is normal in the world of right-wing doublespeak, the exact opposite is the truth. Raising the minimum wage will actually help the economy. More people with more liquid income spend more. It’s just that simple. I know it’s taboo subject matter for some but when more people have more (the dreaded “redistribution of wealth”), then more people do better. Don’t you hate it when logic enters the equation?

The “liberal” reality is that a rising tide lifts all boats. The conservative fantasy is that giving the rich even bigger boats means they can have more people scrubbing the decks. Everyone else can take a long walk off a short pier. With cement shoes. In shark infested waters.

(5) The Minimum Wage Sets The Poverty Line

Current federal minimum wage is $7.25 per hour. That equates to a full-time worker (30 hours a week) making around $11,500 a year. The poverty line varies according to household size and it looks like this:

—————————————–POVERTY LINE IN THE U.S. ——————————————-

Single = $11,490 (that’s $7.25 an hour for 30 hours a week, 52 weeks a year)

(Two people) Single parent of one child OR two working adults = $15,510

(Three people) Single parent of two children OR 2 working parents with a child = $19,530.

Stereotypical American nuclear family of 4 (2 parents, 2 kids) = $23,550

So, if you are a single teen working 40 hours per week then you can survive on $7.25. Good luck getting an education but you shouldn’t go hungry or homeless. By the way, at 40 hours a week, you’re making well above the poverty line. The new standard for full time work and where they set the poverty line is 30 hours per week. That’s why you keep hearing about employers cutting work hours back to 29 per wk. to avoid paying for benefits.

Related: Does Increasing The Minimum Wage Increase Unemployment? 60 Years Of Data Says ‘No’

But let’s say you’re one of the 76% of minimum wage earners that are not teens. If you work 40 hours a week (an actual full-time job) for 52 weeks a year you make $15,080. Congratulations! Take two weeks off for a vacation, you earned it! You most likely won’t have a paid vacation at a minimum wage job but so what? You still make $14,500 a year. You’re above the poverty line! Sure, you can’t afford to pay for rent and food and transportation and clothing and insurance on your salary but it’s all good! According to federal guidelines you’re not really poor, right?

But you are. And everyone knows it. Including Republicans.

The minimum wage does not set the poverty line. The poverty line is set by what it costs to survive and those costs are somehow left out of the equation. Almost like no one wants to admit how many people are struggling in the world’s richest nation. If the number became widely known and understood, people might wonder why. Can’t have that now, can we?

America’s bottom line

The fact is, the federal minimum wage isn’t enough to survive on. You cannot house, feed, clothe, transport and medically care for yourself (much less a child or children) while making the minimum wage. The simple proof of that is that if you make the minimum wage you are eligible for entitlements nationwide. Every. Single. State. The number, amount and type of entitlements vary from state to state but you would qualify in them all. This is the thorn in the Republican paw when it comes to legislating minimum wage versus entitlement benefits.

Related: The Case For An $11 Minimum Wage

Rather than compromise on either minimum wage increases or entitlement funding conservative thinking goes in a sick and disturbing direction. Republican orthodoxy dictates shrinking government through entitlement cuts AND having fewer regulations on companies. That way, corporate America can pay their workers even less.

If conservatives truly wanted people to make their own way without government “handouts” (which is a hallmark of the Republican platform) then raising the minimum wage is the easiest way to do that. To mandate that those employed full-time earn a living wage is the surest wage to reduce the burden on the social safety net.

Related: Australia Is Proof That America Should Raise Its Minimum Wage

Want to actually shrink the size of government?  Don’t cut entitlements. Instead, give people a chance to make it on their own. Tell corporate America to stop bloating their bottom line with tax payer dollars and pay their workers a fair day’s wage for a fair day’s work.