{"id":1759,"date":"2015-04-15T07:25:59","date_gmt":"2015-04-15T13:25:59","guid":{"rendered":"http:\/\/admin.patheos.com\/blogs\/janetheactuary\/?p=1759"},"modified":"2015-04-15T08:28:57","modified_gmt":"2015-04-15T14:28:57","slug":"1759","status":"publish","type":"post","link":"https:\/\/www.patheos.com\/blogs\/janetheactuary\/2015\/04\/1759.html","title":{"rendered":"“The [working] poor you will always have with you”: more on minimum and “living” wages"},"content":{"rendered":"\n<\/head>

I\u2019m still mulling over the issues I worked through in my prior post<\/a> on the minimum wage, living wage, and welfare benefits (and, yes, I need catchier titles).<\/p>\n

Here\u2019s the trouble: \u00a0when you look at living wages, as calculated, for example, with the calculator at MIT<\/a>, the hourly wages they calculate as necessary to support a family are not just a modest amount above minimum wage; they are so much higher that it\u2019s hard to fathom someone making the case that these wages should be paid to all workers, regardless of skill (and this is now old data, dating to 2010). \u00a0For Cook County, Illinois, for a single mother with two children, they calculate an income of $25.50\/hour as required to provide for a family\u2019s basic needs without requiring any government subsidies. \u00a0For comparison, a single adult is determined to require $10.50; alternatedly, in Vermillion County, the figures are $7.50 for a single adult, but still\u00a0$22.50 for a mom with two kids. \u00a0At any rate, the single adult wage rates fit in pretty well with my opinion that \u201cincome necessary for a single adult to live with a basic living standard\u201d ought to be the basis for setting the minimum wage \u2014 and considering that I do think that the government does have a role in health-care provision, a la Vouchercare<\/a>.<\/p>\n

Here\u2019s their methodology<\/a>\u00a0(following the links from the \u201cabout<\/a>\u201d section of the calculator): \u00a0they assume the low-cost food plan (second-lowest, with a higher cost than the \u201cthrifty\u201d plan); they assume that child care costs are based on in-home daycare rather than childcare centers; healthcare out-of-pocket costs and employee contributions assuming that the family is covered by the employer; average rent for a two-bedroom apartment for a family with children; transportation costs based on per-mile estimated costs for a vehicle, and so on. \u00a0Some of these elements are reasonable \u2014 they assume no eating out, for instance; others less so \u2014 assuming average<\/em> transportation and housing costs rather than economizing in this area. \u00a0And it seems to me that when I last looked at this there were other quirks in methodology: \u00a0adding in an amount for \u201csavings,\u201d for instance, but I imagine I must have been looking at a different living wage study.<\/p>\n

So what do you do with this? \u00a0You simply can\u2019t bump up the minimum wage to these levels. \u00a0Even the $15 minimum wage being promoted would radically change the economy. \u00a0I\u2019ll admit that I don\u2019t have the time to research the various studies on this topic, but it\u2019s clear that promoters of this boost imagine that the costs will be funded simply by dropping the wages of CEOs and other fat-cat executives, but the reality would be quite different. \u00a0Employers will automate or raise prices \u2014 and when a Big Mac costs $20, McDonalds will sell a lot fewer Big Macs. \u00a0(I\u2019m not joking about the $20 \u2014 that\u2019s what my husband paid, not for a Big Mac but a salad at McDonalds in Switzerland on a business trip.) \u00a0The indulgence of having a lawn service will be indulged-in by a lot fewer people. \u00a0And so on.<\/p>\n

(And don\u2019t tell me that Australia\u2019s experience proves you can have a high minimum wage with no ill effects. \u00a0They have training wages for teens, for one, and, in general, they have their own issues.)<\/p>\n

And how radical an impact would a $15\/hr wage have? \u00a0See this old post on typical wages in Seattle<\/a>. \u00a0$15\/hr affects many, many occupations; workers in that spectrum from $8 to $15 would expect that the same ranges would be preserved, and those above $15 would expect the same delta as well.<\/p>\n

Second issue: \u00a0if we define \u201cliving wage\u201d as \u201cthat pay which is sufficient for a family (e.g., single mom with kids) to live without any government assistance,\u201d it\u2019s not only a rather unrealistic figure, but a moving target as well.<\/p>\n

The New York Times article linked to in my prior post, and multiple similar articles I\u2019ve seen previously, identify the working poor using Medicaid as a marker of employers \u201cfreeloading\u201d off taxpayers. \u00a0But consider that the ACA increased the number of working poor using Medicaid, because it increased eligibility to 133% of poverty and opened up to all, not just single moms. \u00a0Did employers become any more freeloader-y when Medicaid eligibility increased?<\/p>\n

Taking this a step further, \u00a0everyone earning up to 400% of poverty gets a subsidy in the exchanges. \u00a0Are all their employers \u201cfreeloaders\u201d too? \u00a0What if we moved to a single-payer universal healthcare system?<\/p>\n

What\u2019s more, so far as I understand, the similar increases in the number of working poor using food stamps is not a marker of employers increasing the degree to which they unfairly underpay their employees. \u00a0Can an employer really be held responsible for the increasing numbers of single mothers? \u00a0What\u2019s more, it\u2019s my understanding that SNAP eligibility has been loosened considerably in recent years; the \u201ctrick\u201d of a state providing $1 in heating assistance for large numbers of families to put them on food stamp rolls (which is funded by the feds, not the states) is fairly well-known at this point, and it\u2019s my impression (though unresearched) that eligibility has been broadened in other ways as well. \u00a0What\u2019s more, there have been substantial efforts to \u201crecruit\u201d more food stamp participants, with employees being paid for each new sign-up, each new individual who had been persuaded that signing up is not freeloading.<\/p>\n

Fundamentally, it\u2019s a positive thing to provide welfare benefits to the working poor.<\/strong> \u00a0Yes, it would be nice if everyone had a job that provided for their family, but it\u2019s just not an option<\/em>, and, given that reality, it is far better to structure\u00a0the benefits we provide to the poor \u2014 food stamps, Section 8, health care, the whole package \u2014 so that they phase out gradually rather than with cliffs.<\/p>\n

\u2018kay?<\/p>\n<\/body><\/html>\n","protected":false},"excerpt":{"rendered":"

I\u2019m still mulling over the issues I worked through in my prior post on the minimum wage, living wage, and welfare benefits (and, yes, I need catchier titles). Here\u2019s the trouble: \u00a0when you look at living wages, as calculated, for example, with the calculator at MIT, the hourly wages they calculate as necessary to support […]<\/p>\n","protected":false},"author":2209,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1759","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\n"The [working] poor you will always have with you": more on minimum and "living" wages<\/title>\n<meta name=\"description\" content=\"I'm still mulling over the issues I worked through in my prior post on the minimum wage, living wage, and welfare benefits (and, yes, I need catchier\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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