My Thoughts on the Minimum Wage

February 05, 2014

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I’ve been watching the minimum wage debate from a distance without having an opinion. That was until tonight when I listened to the Intelligence Squared debate on the topic, and I can now at least frame the discussion.

The arguments for the minimum wage

There are a few basic arguments for the minimum wage:

  1. The many people on it need more money than they already make, so if you remove the minimum wage that amount they’re getting will drop even lower

  2. Businesses are willing to screw people over massively, and if there weren’t laws against it they’d be paying people VERY little, and they’d have a massive sword hanging over every worker saying, “I can replace you with someone making $1.00/hour, so you better cancel that vacation.”

In brief, it’s empowerment of the business over the worker, and that power would likely be used in a highly negative way.

The arguments against the minimum wage

  1. While it’s true wages might come down a bit if the minimum wage were removed, it’s also true that many more people would be able to enter the work force

  2. Basically, employers would like to hire more people, but because the minimum wage is so high they can’t afford to

  3. This means that there are millions of people making ZERO money instead of SOME money, and it also means that those people outside of the workforce are not learning valuable job skills that can help them earn (i.e. be WORTH) more in the future

What does the data say?

Ideally we’d just look at the data to see which is more true. But the problem (surprise surprise) is that the data are in conflict. Many studies support one side, and many support the other side.

So it’s a wash right now—or at least as far as I can tell as a non-expert.

So where does that leave us?

My analysis of the main trend

I think both arguments above are strong. They both have their merits, and I’d really enjoy having some conclusive data to steer the conversation, but since I don’t I’ll try to intelligently wing it. Here’s what I see:

  • Computers and automation are taking the jobs of the unskilled, so the value of human unskilled work will continue to fall

  • This means that if a minimum wage is kept in place (or raised) it will continue to produce a gap between what that human is TRULY worth to the company and what they have to pay. In other words, companies will be increasingly paying far too much for human labor, since it’ll become cheaper and cheaper to use automation

  • Add onto this the fact that our population is rising while education is declining, meaning there will be MORE unskilled workers who need jobs

  • This will push the natural wage that an employer would have to pay even lower

  • These wages are not enough for people to live on—much less raise a family on. This is especially true when they’re supposed to be saving for retirement, educating their children, having vacations every once in a while, etc.

So there’s a massive gap forming between employers and employees. We must remember that having human workers is HORRIBLE for a business. They’re expensive as hell. They get sick. They sue you. You have to pay for their insurance. Etc.

It’s a mess.

But in coming years there will be more and more opportunity to simply not hire people for low-skill work. There will be better computers, more robots, and less need for human workers at all. And those low-skill workers that you do need to hire will be competing with MILLIONS of others, so you can pay them jack shit.

Yay.

Major victory…I think. Good for profits anyway. And that’s good for America. I think. Although I guess I’m a bit unclear about how that’s going to help America, since the economy is based on people buying things, and fewer and fewer people will have any money to do that.

Not only that, but the more people completely out of work the more people we’ll have in our jails, and in our emergency rooms, and on welfare.

I feel like we as a society are going to pay one way or the other: Either we require companies to pay living wages that lead to healthy and prosperous American families, or we’re going to pay to support those same people once they become the poor and crime-ridden.

Our choice, really.

And I’m not being snarky here. I don’t much like the idea of paying people to do work that a computer can do. Or paying people to do work that there are 20 people willing to do for a quarter of the price.

I think it’s unhealthy as well. It’s damn sure not natural. But either is public school or the fire department. In nature you learn yourself up and put out your own fires. Happily, we’re not animals.

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Anyway, I don’t see an easy solution. The real truth here is that we have too many people, and we just don’t need them. The number of jobs in the world are about to plummet massively, and this is happening at the exact same time that we’re reproducing like we’re trying to survive in Africa 200,000 years ago.

So I think the whole debate is a bit silly. It’s like debating the size of a bandaid for a splinter when you’ve just caught on fire.

Our problem is that we are not even talking about population control, resources scarcity, lack of education, and the overwhelming influence that technology and automation will have on the number of jobs available.

Those are the things that are making human labor a horrible proposition for companies, and raising the minimum wage is an artificial solution that may be the best way forward, but if that’s true it’s only the best of a bunch of bad choices.

The actual solution

The real solution is to do the following:

  1. Acknowledge population control as our #1 priority

  2. Accept it as society’s responsibility to educate everyone

  3. Figure out how to pay everyone a living wage, regardless of whether they work or not (right-wingers, please see Milton Freeman)

  4. Remove growth and profit as the primary metrics of success in human civilization, and move it to happiness and creativity. Start measuring those instead

More tangibly, we have to say to the American people, as the American people, that the happiness of the middle class is the new top priority. And that means removing power from the big corporations and providing everyone the chance for an ideal American lifestyle.

Only then will we have any hope.

Right now our current path is the following:

  1. More people out of work (fired because they cut into profits)

  2. More people uneducated (education is a for-profit business)

  3. More automation replacing jobs (increases business profits)

  4. More people without jobs, in jail, on welfare, committing suicide (or homicide)

  5. A massive rise in crime and unrest due to a highly segmented dystopia of the highly successful and the unemployed and poor

  6. More highly polarizing politics saying either 1) take from the rich and give to the poor (wrong), or the poor are stupid and lazy and don’t deserve anything (wrong)

  7. People will get on one of those two trains and ride them all the way to America’s destruction

Great, now I’m depressed.

Let me sumarize: We better learn, real quick, that the goal isn’t profit—it’s the happiness of the American family. And that means remembering the basics.

Notes

  1. If you’re not partaking of Intelligence Squared yet, you should get to it. I’ve been saying for years that they’re brilliant.

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