Minimum Wage Revisited

Since it's Labor Day, let's revisit this whole minimum wage issue that was brought up on this blog a couple of days ago. Along with many other progressive commentators, I continue to be very worried about how low the U.S. minimum rate remains. It results in poverty-level salaries that make it difficult for people to put enough food on their tables, let alone have the resources to afford decent healthcare or be able to send their children to college. 

There is an intriguing piece in the online Atlantic, however that suggests the minimum wage rate in the U.S. compares more favorably than one might think to other Western nations. When you take into account the cost of living in these countries, then the $7.25 an hour rate in the U.S. comes in at an adjusted $7.10 per hour, whereas the highest adjusted rate can be found in Luxembourg at just a little over $10.00 a hour. Australia, which enjoys a very generous unadjusted rate of $16.00, falls to an adjusted rate that is less than $10.00. France's adjusted rate is almost identical to Australia's. So it turns out there is less of a difference between the U.S. and other wealthy countries than it first appears.

Yet, as the Atlantic is quick to point out, these adjusted rates do not take into account other factors, such as the cost of healthcare and higher education. And since in most of the countries the U.S. is compared to, healthcare is free and higher education is far less expensive or even free, the minimum wage gap once again widens considerably.

The Atlantic concludes that the U.S. looks just a bit better using these comparisons. But my sense is that when you compare, say $10.00 an hour to $7.00, and acknowledge that in France and Australia, the minimum wage workers have all their healthcare costs covered, well, that's a hell of a difference, probably on the order of $5.00 or $6.00 difference, maybe more.  This differential is exactly the amount that many people believe should become the basis for an increase in the minimum wage. That is, the minimum wage in the U.S. should now be at least somewhere between $12.00 and $14.00 an hour. Reassuringly, of course, once the Affordable Care Act really kicks in, this additional difference will lessen, though this will vary by locale and job type. In any case, an unnecessary and easily remediable burden on the low-wage American worker will remain.

To sum up, then, whatever light the Atlantic was trying to shed on this issue, we return to the original conclusion. The minimum wage in the U.S., by any standard or comparison, is too low, way too low. An artificially low minimum wage hurts people. It puts undue financial pressure on workers and their children. It keeps them and their children from eating well or getting the healthcare they deserve. The time has come to give the most serious consideration to significant increases in the minimum wage. It is in all of our interests to pursue this.