Why a $10.10 Minimum Wage Won’t Solve Poverty

Filed in Gather Politics News Channel by on November 9, 2013 0 Comments

Raising minimum wage is a divided subject and Conservatives aren’t without merit in their opposition, however, their reasoning is flawed. Both sides in this debate have fatal errors in their argument. Increasing it will not solve poverty and could make poverty worse if other issues aren’t addressed along with any increase approved on the federal level.

Every Worker Deserves a Fair Wage

This week President Barack Obama put his support behind a starting hourly rate of $10.10 per hour to improve the lives of American workers. The current rate varies by state. For states adhering to federal employment laws, that rate is $8.25 per hour, unless you get tips. Employers of waiters, bartenders, and other tipped employees are only required to pay those workers $2.13 per hour. Ouch! So the next time you are in a U.S. eating establishment, think about your waiter when you leave a tip.

Wait, why is that only in the U.S.? The U.S. is one of only a few countries that require gratuity. A good step towards helping these workers is to do away with required tipping. This only provides an excuse to pay workers less. How is it fair to have your weekly paycheck decided by the hundreds or more customers you serve daily? Performance-based pay needs to be decided by qualified individuals and not Joe the plumber who is having a bad day or too low on cash to provide a 15 percent tip at the end of his meal.

The Current Rate Leaves Full-Time Workers Struggling

Gone are the days when most minimum wage employees are high school students working to buy their first car or young people in college looking to earn a few extra dollars between classes or over summer break. If you need proof, just open your eyes the next time you are checking out at your local grocery store, mall outlet, or fast food restaurant. Many of the employees you will see are parents and other caregivers working 40 or more hours a week to make ends meet. Some may be on a form of public assistance, such as food stamps, Medicaid or Section 8 housing, however, many of them have a spouse working in a similar position, putting them over any level for additional help.

You might be thinking, that’s great, they are working full time and meeting their financial obligations without state or federal help. Unfortunately, there is more to this picture. It is not the same as in America’s past, where workers had quality manufacturing jobs with benefits. These parents don’t have paid time off, if they get sick, they work sick. If they miss time, they lose money. Living paycheck to paycheck and missing just one-day’s pay puts more stress on the families. When there is no extra money to make up for that loss, you have to choose which bill not to pay. Many times that money comes out of a food allowance.

It’s Not That Simple

Reducing a food budget means trading quality for quantity. It’s easy to say a person can eat healthy on a small budget if they spend the time cooking and preparing the meals from scratch. That is easy to say, however, not as easy to implement. Add to this childcare, health care, and transportation costs and problems, then maybe you can see the compounding problem facing workers in America.

Increasing Wages Will Only Increase Inflation

It’s one big cycle, inflation drives up wages, wages increase inflation. Give America another decade and it will look like Russia after the collapse of the U.S.S.R. Americans will need a children’s wagon to bring money to the local corner market just to purchase a gallon of milk and loaf of bread.

If more Americans would open their eyes, they could compare prices in other countries. The prices of basic items, such as food, shelter, and medical services, as well as what some consider luxuries, cable television, high-speed internet, and mobile phone service. Why should the same services have such drastic difference in prices? By increasing wages, the government does nothing to discourage prices from increasing.

Poverty, minimum wage, and inflation are complicated issues. Raising one because of the increase in another won’t solve problem, it will just further complicate the problem. If President Obama and the Democratic Party want to begin fixing it, they need to look at the entire picture. The large picture includes access to quality food, housing, and health care at a reasonable rate. You can’t put a Band-Aid on a broken arm and expect it to heal.

Image Source: Whitehouse.gov

© Christine M. Dantz 2013

 

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