North Texas Daily

The minimum wage is a political issue for ordinary people. While the majority of politics can feel like it’s playing out in a separate world from ours, it is everyday people who are affected by policies concerning the minimum wage. My firm belief is that refusing to pay people high enough wages to live a comfortable life in exchange for their labor is exploitation.  

The North Texas Daily recently published an opinion piece regarding minimum wage in the United States. Its position was that a $15 minimum wage would benefit the wrong people. I disagree with that statement, as well as the reasoning, on a number of fronts. First is the claim that a minimum wage hike would create problems such as racism, ageism, and ableism in hiring practices, as well as allow for large corporations to take advantage of the situation due to the fact that raising their workers’ pay wouldn’t cut into overall profits that much.

Where I take issue with this is the potential problems that the potential problems already exist, and keeping wages low will do nothing to solve them. The second claim is that small businesses would be devastated by a minimum wage increase, due to the fact that they can’t afford to pay their workers that much. The problem with that reasoning is that minimum wage increases happen incrementally, over the course of years, not all at once. Additionally, since our minimum wage is based on the poverty line, and the poverty line is outdated and inaccurate, businesses that demand to keep wages low are advocating for further exploitation of their workers. 

The article states, “the benefits of the proposition help employ able-bodied people, skilled workers, people with multiple years’ worth of experience and large corporations earn more profits.” I agree. When working-class people are given more money for their labor, more money will be flowing into the economy. Unfortunately, due to the nature of how the U.S. and global economy function, this plan could never work. A large portion of that newly flowing cash will go straight into the pockets of billionaires and large corporations. These entities are far less likely to share their wealth than an individual consumer because after someone accrues a certain amount of wealth, their living expenses can be covered by a fraction of the dividends they make off of investing their fortune. The rest of their plus-sized bank account will be locked up with no way to benefit others through the free market.

Sounds bad, right? Well, the fact is this already happens. With workers being paid a minimum of $7.25 an hour, billionaires are still able to take advantage of our economic systems. The same could be said for potential hires who have more experience than their competitors. In a society where we can charge $7.25 for an hour of work, people who have more experience can edge out their 18-year-old competition. Yet again, the same could be said for disabled people. The requirements of many restaurant jobs (including the one that I currently work) demand an employee that is able to stand for multiple hours at a time, lift more than fifty pounds and climb ladders if necessary. If a person looking for a job uses a wheelchair, there is a strong chance they would be unable to do any of these things that I do every day working in a restaurant. 

Next, the piece depicts a thought experiment over how paying workers more for the same work will cut into the costs of small business owners. Disregarding the fact that on average, the gap between productivity and wages is the largest it has ever been, this simply makes no sense. I care about small businesses as much as the next guy, but this scenario is entirely disconnected from reality and borders on misinformation. As much as it surprises me to say, lawmakers have actually thought their way through this one and have found a pretty effective solution. 

Minimum wages being increased, at a state or federal level, is not a huge switch being pulled that requires small business owners to double the amount of money they pay their workers. A new minimum wage being signed into law is a signal to employers across the country. “You have x amount of time to raise wages to this number or you will be illegally paying your workers less than the minimum wage.” 

We can see a clear example of these scheduled increases in states that have already raised minimum wages through their own legislature. On January 1st, 2021 in California, the minimum wage rose from $13 to $14 per hour. On the first day of the year in 2022, the minimum wage will rise to $15 per hour. As we all know (mostly due to how much Californians like to brag about it) California’s economy is booming. 

This proves that raising minimum wages across the country won’t destroy our economy or make it impossible to own a small business. The problems that the previous story brought up already exist, and they can’t be solved by refusing to pay workers a living wage.

Mom and pop small businesses always seem to be at the forefront of people’s minds when it comes to increasing the minimum wage. I understand why. These people are trying to achieve the American dream, strike out on their own and leave a mark on the world. Personally, my first thought with regards to minimum wage is not the business owners, but their employees. Imagine the difference $15 an hour would make on someone with no outside support. It can mean paying off a car payment, paying more towards their student loans or even living in a nicer apartment. 

To top it all off, a huge portion of these endearing small businesses are doing something not-so-endearing underneath: they are exploiting their workers. Not paying your workers a high enough wage so that they can live is exploitation. Shouldn’t the minimum wage guarantee one’s ability to cover their living expenses? I certainly think so, but $7.25 hourly pay is nowhere near enough to support oneself. Businesses can exploit workers this way through the belief that the minimum wage is based on the U.S. poverty threshold, which is laughably inaccurate.

A minimum wage should be based on a country’s poverty threshold. A poverty threshold, also commonly known as the poverty line, is an amount of money that an individual must make to be able to live a comfortable life. The poverty line was first established in the early ’60s as a part of the Social Security Administration creating a social safety net for those in need. The poverty line is set by the cost of a meal in the United States: three meals a day, seven days a week, 52 weeks a year.

We then assume that the cost of food should be about one-third of the expenses a person would have. The other two-thirds would be meant for rent and costs such as clothes, gas or personal devices like laptops and cellphones. Our poverty line is roughly based on the cost of food over a year multiplied by three. Therefore, our minimum wage should be enough to cover that cost. The poverty line for one person is $12,880 per year. I challenge anyone to detail how they would live on their own with no outside assistance with less than $13,000 a year. 

The reason the poverty line is so distorted is it assumes that rent wouldn’t outstrip other costs of living. Sadly, rent prices are increasing in this country, to the point that it is impossible to rent a two-bedroom apartment with the federal minimum wage. Rent can take up to 50 percent of living expenses for people and eats up the majority of the wages they earn as a result. When you don’t pay people enough money to make rent or eat, that is exploitation.

In essence, I won’t be keeping small business owners at the front of my mind when it comes to arguments over minimum wage. Instead, I’ll be advocating for the rights of working people in this country. The problems that the story speculates would come about from a minimum wage hike already exist, and require outside action to fix. The minimum wage needs to be built off of a reality-based poverty threshold that takes high rent prices into account. Raising our minimum wage is a step towards evaluating poverty in the United States as what it truly is. 

No one should hope to own a business and expect wages not to rise with the cost of living, and no worker is obligated to keep someone’s vanity project alive at the expense of their life or dignity. If a business can’t afford to gradually raise their wages to meet a new minimum wage, then the free market should have its way with them. After all, isn’t capitalism about competition?

Featured Illustration by J. Robynn Aviles