As the rate of
inflation in the United States rises, the minimum wage rate remains at $7.25 an
hour. This has been stagnant since July
of 2009, when wage rates were changed from the $5.15 that had been set in 1997.
To put this into perspective, a mother or father working at McDonalds, making
minimum wage in 2009 dollars, is now making the equivalent of $6.55 (Calculated
using US Inflation Calculator, found here- http://www.usinflationcalculator.com/) . Is
this enough to support a family? Is this even enough to support oneself?
I’ve
seen the news- McDonalds and Burger King and Wendy’s workers are organizing to
raise their wages to $15 an hour. I have also listened to our conversations in
class- is this what they should be making? Should they work harder? From an
economic standpoint, raising minimum wage effects inflation, and eventually,
this problem is compounded and needs to be fixed again sooner rather than
later.
Instead
of taking the articles that I could find online for their word from the outset,
I wanted to do my own calculations based on information that can be found
online. MIT has a “Living Wage” calculator on their website where you can
search for a location, first by state and then by county, then find that specific
locale’s minimum wage followed by the wage that one needs to make in order to
live a comfortable life. It contains a vast amount of information about the
different costs that one has to pay on a monthly basis, and then it has the
average hourly wage based on occupation.
In
Allegheny County, the living wage for 1 adult is $8.29 an hour. The more
children there are, the more one needs to make. If there are two parents, one of those parents can
survive while making less because the other has the ability to take care of a
child. Currently, the minimum wage in Allegheny County matches the national
average of $7.25. Instead of going into dirty details about the wage riots, I
want to brainstorm about three things
that could happen if the minimum wage was, in fact, increased- first, to $10.10
nationally, as President Obama is currently calling for, and then to $15, as
fast food workers would like.
1)
A single parent of one child would still be below the comfortable living wage, but
not quite to the poverty line, regardless of whether the wage is raised to
$10.10 or to $15. Many people might say that the individuals who have one child
should work harder to support them, but if a parent is single and working more
than 40 hours a week, what time is there for actual parenting? Admittedly, it’s not much. This can create uneducated children with low morals, but there are ways
around it, especially if the wage was raised to $15, because….
2)
…Earned
income Tax Credit, mentioned in The
Working Poor, could push impoverished workers closer to the “Living Wage”
line of Allegheny County. If wages were raised to $15 an hour, individuals who
filed for Earned Income Tax Credit could earn around $1000 more a year- they
would be making around $30,000/year before taxes. Although this doesn’t seem
like that much, the more children there are, the more money they can make. This
chart explains the numbers better than I ever could in words-
Of course, if minimum wage was
increased, the numbers on this chart might increase as well.
3)
If
fast food workers’ wages increase, should it increase in other service jobs
too? Would it mean that working a job that does not require education could
make you nearly as much as one where you have to train and know what you’re
doing? In Allegheny County, construction works make about $19 an hour. Social
Service workers make about $17. These are people who went to college or trade
school to learn their craft- if fast food wages increase to $15, will
individuals in skilled positions start requesting raises too? If everyone’s
making more money, businesses can begin to charge more for their products
because individuals can afford to pay more, making the increase in wage
temporary.
I think there are
bigger problems to deal with, like the national inflation rate and what it
means for international trade. With a lower inflation rate, the net worth of
the dollar would increase, allowing a single dollar to go farther- instead of
increasing the amount people are making, we could make our money go farther.
This is a very long-term approach, but if America as a whole can do more with
less, then everyone is better off, not just any single group of individuals.
