In the 1930’s when our government first initiated the country’s first minimum wage law, it only effected about 300,000 people out of the 54 million American workers in the workforce. The average hourly wage at the time was 62.7 cents per hour, so the basic minimum wage, which was set at 25 cents per hour didn’t affect very many people. It only effected a small fraction of the population back then. Compare that to today’s minimum wage laws, which only effect 2-3 percent of the population.
Now, with all of the political fuss we see about the minimum wage, and pushing for a higher minimum wage, you would think it’s a very, very important issue that affects a large portion of the population, and that by raising the minimum wage that we are having a significant impact on a substantial portion of the country. But if you thought that to be the case, you would be wrong. I mean, seriously, we have heated debates about this subject. We have considerable political division in this country, which only serves to drive a wedge down the middle of our country rather that working to unify us.
The Two Sides of the Debate
On the one side are the people that push for higher minimum wages, and claim that if you don’t, then that proves you are evil and don’t care about the well-being of the working-class population. They vilify you. They fill their hearts with hatred towards you. They imagine themselves to be morally superior to you on this front. They believe themselves to be pushing for something that they think will have a significant impact on a large portion of the population, even though, like I already said, it only impacts about 2-3 percent of the population.
(The same people often make the claim that we need Scandinavian-style socialism in our country, using that as a reason to push for higher minimum wages. This is despite the fact that Scandinavian countries don’t have minimum wages.)
On the other side of the debate are another group of people that, although the first side doesn’t think so, also cares about the well-being of the population, especially those at the low end of the wage spectrum. They, too, want a better life for all people, except they believe that utilizing minimum wage laws is focusing our energies in the wrong direction. They believe that, although raising the minimum wage might be beneficial to some workers, it harms other workers by causing them to lose their jobs. And it hurts the well-being of the businesses for which these lower-wage people work, and can possibly harm the vitality of the macroeconomy at large if not done right.
In the minds of this group of people, the well-being of the working class, and the well-being of businesses, are inextricably linked to each other, and so both of their well-beings should not be done in a way that puts them at odds with each other. They need to be brought into harmony with each other, and minimum wage laws do not do this, so another approach to raising wages needs to be utilized that benefits both the workers’ well-being, and the businesses’ well-being.
I, the author of this article, am one of these people that stands in this second group, and I am going to try to present my arguments in this article, and other articles, on the minimum wage, and its imposition and increases. In the meantime, if you are in the first group of people who are pushing for higher and higher minimum wages, and believe this is the best approach to improving the well-being of workers at the low end of the economic spectrum, please understand that we are not your enemies – we care about the well-being of workers at the low end of the pay scale, too, except we’re approaching the subject, and how to improve their lives, by utilizing a different approach that we think is far better than your approach. In fact, like I’ve said, we think your approach does some harm in the end to some people, and to the macroeconomy, so you might consider seeking to understand our arguments, as doing so will allow us to all be on the same page. That is my wish.
But, for now, let’s get back to the point I was making about how minimum wage laws only impact a small portion of the population.
Minimal Impact
Now, it could be argued that because imposition of the minimum wage only affects a small fraction of the population, all it’s really doing is establishing a basic minimum-level income for people. The argument is that this makes sense because almost all people who work minimum wage laws don’t work them very long; most people find other jobs that pay more, and in many cases, significantly more. Of course, many of you who push for higher minimum wages don’t seem to understand this point or believe it, or think that most minimum wage earners are stuck for life in their low-income jobs, and need to provide for their families with those jobs, even though that’s quite rare, and something I don’t quite understand.
Question: if you are working at a minimum wage job, and you’re married, and a child is on the way, why would you just stay at your minimum wage job? Why wouldn’t you look for a higher-paying job? In fact, why wouldn’t you look for a company that has some training program that allows you to learn a skill set that makes you more valuable to any possible employer, which allows you to make more money? Are you afraid? Do you lack motivation? What exactly is going on in that head of yours?
Your author is an example of this – I started working for a company because they had a driver-training program that allowed me to get my commercial driver’s license (CDL) without me needing to pay for that training, all while having a job that continued to pay me an income while going through that training; the end result is that I am now making an income substantially higher than the average American annual income, and I didn’t have to go deep into debt to do so. Going this route paid off for me, and it could to these low-income-earners as well.
Of course, the truth of the matter is that there are very few people that are in this position, and choose to stay in the position for one reason or another. Most people in this position, where they are starting a family, choose to go out there, become bold, and improve their lives. They take their own initiative. As for the ones stuck in the minimum wage jobs and who refuse to leave, maybe we need to talk about underlying emotional and psychological states that might hinder them from improving their own lives, as improving that underlying state can do more to improve their well-being than raising of their minimum wage can do even on its best day.
Final Point
There’s another point to be made, and I will end this article on this. The truth of the matter is that the establishment of minimum wage laws back in the late 1930’s didn’t affect everyone equally. For most Americans, there was no problem because a vast majority of Americans were already making a higher wage than that minimum amount. With that being said, there were a couple of places that were negatively impacted by the imposition of minimum wage laws. What places am I talking about? First, there was the American south. Second, there was Puerto Rico, where imposition of minimum wage laws proved to be catastrophic. When we look at the problems faced by these two places with the introduction of a federal one-size-fits-all national standard for minimum wage laws, there are two lessons that can be learned from them.
You can learn more about how minimum wage laws impacted the American south and Puerto Rico by reading my articles on those two subjects.
