Simple solutions to complex problems sound terrific. That’s why they make excellent rallying cries. Repeal-and-replace Obamacare. Secure our borders. Destroy job-killing regulations. Cut all taxes. Institute a $15-per-hour minimum wage.
One of those things, however, is not like the others. One of those solutions has been fought for by liberals, union members, and activists all across this nation – from the food counters in McDonald’s restaurants to delivery drivers, to everyone who knows someone who relies on subsistence-level wage jobs and wants a better future – or those that sympathize with the plight of the undervalued worker.
But those simple solutions rarely work as hoped.
The Fight for $15 is a noble cause, and gives us an excellent rallying cry. But there are a few very specific reasons why it may not be realistic or beneficial public policy – reasons why it may cause just as many problems in this nation as it solves. I’ve summed two of them up in this article – and at the end, I will propose a superior, if less sexy, solution which will come closer to solving the problem of sub-standard wages permanently.
1) America is not one economy, with one living wage.
This criticism comes straight from the Republican Party – but that doesn’t mean that it’s wrong. In this case, they have a point. What works in the big cities, may not work in rural areas of the country. A city may be able to support a $15 per hour minimum wage. My home town of Seattle has already moved to institute such a wage, city-wide. But I will tell you that in Yakima, Washington – just two hours away, in the same state – a $15 per hour wage would cripple the local economy.
This is because the concept of a living wage does not refer to any set, static number. A living wage in San Francisco, where you might find a studio apartment for $2,000 or more per month, is obviously far different than a living wage in West Virginian coal country – where a mortgage on a house might only cost you $600. So, why have we always tried to push one flat wage on every jurisdiction across this country?
The United States is a massive entity with a complex economy. We have areas specializing in mining, manufacturing, agriculture, technology development, transportation, and any number of other industries. And you can’t just divide things up by states, either. I could live comfortably in Colusca, California on $20 an hour – paying a mortgage, buying a car, with money every month left over after feeding my family. But if I drove just an hour and thirty minutes south to Palo Alto, that wage buys me a rented room in someone’s house and poverty.
So, no, simple, one-size-fits-all solutions can’t be the way for us to go as a nation. A $15 per hour wage is higher than the cost of labor many areas can support, while at the same time far below that which other areas in this nation require as a living wage.
2) It’s a temporary solution.
Current minimum wage laws on a federal level don’t account for inflation. If you’re not familiar with the term, inflation is a cold, hard fact, which dictates that as time goes on, money declines in value. It’s what prevents people from simply storing their cash in mattresses – forcing them to put it back into the economy, where it can do some good.
But inflation means that over time, the value of our wages decline, if our pay does not go up. This is a recurring issue with American politics, concerning the national minimum wage. Every several years, the minimum wage declines to the point where it represents a level of income barely enough to ward off starvation. Today’s minimum wage – $7.25 an hour on the federal level – was instituted in 2009. In today’s money, according to the CPI Inflation Calculator, that would be $8.21.
Do you see the problem here? Assuming we were able, as the Democratic coalition sweeps back into power in 2018 and 2020, to institute a national living wage, all the Republicans would need to do to ensure our wage becomes starvation-level again would be, precisely, nothing.
They’d just have to sit there and block any further attempts to hike the minimum wage to keep track with increases in the cost of living. In the gridlocked American political system, doing nothing is always easier than doing something – so, they’d win.
Here’s my proposed solution.
It isn’t sexy. It’s hard to fit on a sign. But it would be fairer to both the poorer and richer areas of this nation, who would, in order, see people lose their jobs and livelihoods, or be turned out on the street, unable to afford to live. What we need to do is empower the Department of Labor to institute minimum wages on a granular level, indexed to the cost of living in each individual area of the United States.
What do I mean by that? What I mean, is that we should pass a law establishing a national *standard* for a minimum wage, not a wage itself. There are many ways to do this, but one solution would be to take basic measures of cost of living – the price of rent for a one-bedroom apartment plus a month’s worth of groceries, for instance – and set the minimum wage to allow a worker to earn a set percentage of that cost-of-living measure. We have many methods available to us to determine cost of living – like the pictured Consumer Price Index – which to varying degrees of accuracy estimate the yearly chance in how much we pay to exist.
All we need to do is require that the Department of Labor measure, clearly, year by year, changes in the cost of living in every area of the United States – and adjust the minimum wage accordingly. If an area sees an economic decline, the wage goes down accordingly, incentivizing businesses to move into the region. And if an area sees a shocking increase in wealth, that wealth gets better spread out as labor becomes more expensive and jobs flow to less-wealthy areas of the nation.
But best of all, if we established, in our legal code, the requirement that our minimum wage shall be indexed to the cost of living in each jurisdiction of the United States, we ensure that not only us, but our children and grandchildren benefit from this law. We head off future fights and challenges before they appear, and make our solution the status quo, rather than a fight we need to renew at least once per decade.
And eventually, paying a living wage will become what people are used to. We will feel entitled to a fair wage for a day’s work, to a life which, if we are working 40 hours a week, is free from poverty and monetary desperation. And that solution, that freedom from poverty with an honest day’s work, will endure.
And that, my friends, is my solution. Sexy, it is not – but good policy is rarely sexy. Good policy is usually boring and nuanced.
The Skeptical Liberal is a writer focused on fighting pseudoscience, hyperbole, partisan hackery, and political bullshit. You can find him most days on Modernliberals.com, on his website, or on Facebook at @skepticalliberal. But mostly, you’ll find him here.