Los Angeles and San Francisco leaders want burger flippers to be paid $15 an hour.
Keep that in mind if you know of someone who is an Army private in Iraq or Afghanistan. They’re getting paid $8.83 an hour for the opportunity to be shot at. That, of course, assumes they only work 40 hours a week. Their real per hour pay is significantly lower.
While working for McDonald’s and serving in the military are like comparing apples and oranges since soldiers receive additional compensation from subsidized housing and food to retirement and health benefits, it does underscore the problem with raising the floor for higher pay instead of helping people climb up to reach better opportunities.
The Los Angeles City Council this week voted to raise that city’s minimum wage 66 percent to $15 an hour by 2020. San Francisco is already on track to have a minimum wage of $15 an hour in 2018. Currently the minimum wage is $12.25 an hour in San Francisco compared to the $9 state minimum wage that jumps to $10 on Jan. 1, 2016.
I’m no economist but I have noticed a few things with minimum wages and what happens after they are raised since I entered the workforce in 1972.
• When the lowest paid worker’s hourly pay is raised to a new mandated minimum, eventually employers raise the pay of others. It sounds good until you realize that higher pay increases the cost for producing goods that means higher prices for those at the new minimum wage and others as well.
• Not always but often employers stressed by higher costs rethink how they are doing things and decide they can do without certain things and eliminate a job or two. Some of the jobs cuts were better paying jobs but most were minimum wage workers.
• As minimum wages have increased, less and less employers offer summer jobs for teens and other entry level workers.
• Those that I have known in minimum wage jobs didn’t languish there too long as it was just a stepping stone or a way to make ends meet while pursing further education. Rarely did anyone make a “career” of a minimum wage job.
Granted there are pressures today on minimum wage jobs and hours available ranging from mandated health care costs to automation, but for the most part I’d argue the four observations still apply.
That brings us to the purpose of raising the minimum wage: Improved economic stability.
To put it politely, it’s a farce as eventually any boost from the minimum wage that is obtained ultimately is whittled away in higher consumer costs that those minimum wage earners have to pay for basic needs due in a large part to increasing labor costs. It’s akin to a dog chasing its tail.
Yes, there are short-term benefits but they are fleeting.
My first “real” job in 1970 was as a 14-year-old flipping burgers for $1.35 an hour — the California minimum wage for minors at the time. I was still in high school and needed money to help pay for basics such as clothing since my mom was widowed with four kids. At age 15 I started working on a piecemeal basis for the weekly Lincoln News Messenger newspaper at 15 cents a column inch and a dollar per photo used. By the end of my senior year I was selling advertising on commission for the Wheatland News while working as a part-time hourly council reporter covering council meetings in Rocklin, Lincoln, and Roseville for the daily Press-Tribune.
That year I quit the burger flipping job that was now paying the new minimum wage of $2 an hour because I was getting ready to go to college and I could make more money being a newspaper stringer, selling advertising, and working part-time as a reporter. Eventually I was able to get on as a full-time photographer and then as a reporter while going to college. My employer didn’t offer health insurance until I was 24 and I didn’t get my first vacation until I was 25.
This is not a “woe is me” story. I had it a heck of a lot better than my parents and grandparents that survived the Great Depression and World War II. Their work history made mine look like a walk in the park.
Neither my parents nor I stopped at minimum wage jobs. The only way they were able to have relative comfort and buy a home was because they moved up the economic ladder taking every opportunity to learn and make more. It didn’t come easy for them. Jobs weren’t exactly handed to people.
They devoted their energies into moving forward and not sitting still. It didn’t happen overnight. My grandmother had to start all over when she was in her 40s in the middle of the Great Depression with eight kids still at home and a drunkard of a husband that abandoned the family.
She made do with what she could from a variety of minimum paying jobs and always looked — and seized — the opportunity to make more money or to obtain a better paying position.
Real economic gain for individuals doesn’t come from raising the minimum wage which was never intended to be a livable wage. You earned more by moving up to other jobs.
Such upward movement is what powers an economy and makes it vibrant. Simply upping the ante of those on the bottom is almost as if you are paying them to show up. No offense to the labor that minimum wage earners do, but real economic growth comes from climbing the ladder and not waiting for the floor to be raised.
This column is the opinion of Dennis Wyatt and does not necessarily represent the opinion of The Journal or Morris Newspaper Corp. of CA. He can be contacted at email@example.com or 209.249.3519.