Aug 29, 2013 Comments Off on Don’t fear 15
With fast-food and retailer workers striking in 58 cities Thursday — a dramatic increase over the seven cities where similar actions took place last month — calling for a $15-an-hour wage, here’s an interesting historical note:
Fifty years ago, when Martin Luther King spoke at the March on Washington, one of the demands was a minimum wage increase from $1.15 to $2 an hour. That would be just over $15 in today’s dollars.
In case we’re tempted to get carried away with this “dream,” the Chicago Tribune offers us University of Chicago economist Allen Sanderson’s advice: “Don’t fight for 15.”
All in all, it’s a pretty thorough demonstration of how far the dismal science can stray from any connection with reality.
First of all, he warns that if workers become too expensive, they risk being replaced by automation. In fact, though, it’s really hard to imagine how much more automated McDonald’s could be. Or to picture computerized checkouts at Macy’s.
He suggests higher wages would mean even higher unemployment rates for minority teens. That might be a factor if there were a better job market for older people, but there isn’t — especially with an economy that is quickly replacing middle-class jobs with low-wage ones.
More than half of new jobs are in low-wage retail and hospitality sectors, according to the Chicago Political Economy Group. And the number of college graduates earning minimum wage is steadily growing.
In fact the surge in youth unemployment came before the 2008 crash, while the economy was growing (not very fast), as federal funding for youth jobs was eliminated. As we noted at the time, it was the first economic recovery in which youth unempoyment increased. That was without a minimum wage hike, too.
Sanderson then looks into the “claim” that “one can’t live on $8.25 an hour and that someone working full-time would be in poverty.” Not true at all, he says — a full-time minimum wage worker earns $16,500 a year, a generous $1,000 above the federal poverty level for a two-person household.
Of course, if the full-time worker had two kids rather than one, the family would be at about 20 percent below the poverty level. Which is not exactly quibbling.
But the reality is that only about one-third of minimum wage workers have full-time jobs. That’s one of the reasons fast-food workers want a union — so they can negotiate over things like scheduling.