Thinking Minimum and Waiting For Yes

The minimum wage in Nevada is $7.25 per hour if the employer sponsors group health insurance policies, or $8.25 if health insurance is not part of the compensation package.  This doesn’t mean a person will automatically receive those wages because some employers are taking advantage of loopholes in current statutes [LVRJ] There are other elements which are the subject of FAQs on the Labor Commissioner’s web site. 

However, the bottom line is still that the minimum wage in Nevada is not a living wage.  The point is driven home in the realm of fast food operations, and there is talk of a bill in the upcoming session of the state legislature to raise the minimum wage to $15.00 per hour.   Because minimum wage levels are a topic inserted in the state constitution, the raise would have to pass in two sessions and go to the voters. [LVRJ]  The second important point is that Nevada job growth is showing in sectors which employ a high number of minimum wage workers – in the sector we are pleased to call “leisure and hospitality.”

Nevada Job Growth 2014

The median wage for a fast food cook in Nevada is $18,890 per year.  [DETR]  A counter attendant can expect median annual wages of $20,990. [DETR]   Now, look at the 2014 Federal poverty guidelines:

Federal Poverty lines 2014

Obviously, there’s ample evidence from the charts above to support the contention that if employers pay sub-living level wages, then the state and local governments must make up the difference in the form of social safety net programs. In short, the taxpayers are subsidizing the businesses. 

But, but, but…  Spare me the noble story of How I Started Mowing Lawns in the 7th Grade And Worked Up To….  Only about 7% of the low wage work force in this country is composed of teenagers.  This means 93% of low wage workers are adults.  Women make up about 60% of the low wage work force, and a growing number of low wage workers are men. [LWW]

But, but, butgranted that wages are low in retail and fast food sectors but this is insufficient to raise the minimum for everyone… yes, fast food work considered nationally makes up about 5% of low wage employment.  However, we’re forgetting about data entry operators, bank tellers, child care workers, teachers’ aides, home health care providers, maids, cooks, porters, cashiers, pharmacy assistants, parking lot attendants, ambulance drivers, dry-cleaning workers, hotel receptionists, and a plethora of other low wage occupations.   The median annual wage for a home health care provider is $26,170; for a bank teller $24,940; for a grocery cashier about $21,370.  None of these jobs would get a person with a family of four above the federal poverty line.

But, but, butif we raise the minimum wage that will actually destroy jobs… this bit of mythology has been around since time out of mind.  It’s purely theoretical, rising from the minds of well paid lobbyists from the United State Chamber of Commerce, and at least five academic studies have debunked it:

“A significant body of academic research has found that raising the minimum wage does not result in job losses even during hard economic times. There are at least five different academic studies focusing on increases to the minimum wage—including increases ranging from 7 percent to 12.3 percent made during periods of high unemployment—that find an increase in the minimum wage has no significant effect on employment levels. The results are likely because the boost in demand and reduction in turnover provided by a minimum wage counteracts the higher wage costs.

Similarly, a simple analysis of increases to the minimum wage on the state level, even during periods of state unemployment rates above 8 percent, shows that the minimum wage does not kill jobs. Indeed the states in our simple analysis had job growth slightly above the national average. […]

All the studies came to the same conclusion—that raising the minimum wage had no effect on employment.” [emphasis in original] [TProg]

But, but, butthink of the Mom and Pop store… which we would except for the fact that 2/3rds of low wage workers don’t work at the corner bodega. 2/3rds of our low wage workers labor for large corporations.  For example, WalMart has seen profits grow by 23% since the Recession, Yum! Brands by 45%, and McDonalds by a hefty 130%, with help from U.S. taxpayers supporting their personnel.  [TP]  From the April 15th edition of Forbes we learn that WalMart workers cost U.S. taxpayers approximately $6.2 billion in public assistance.  One certainly wouldn’t want to disparage the efforts of the Walton’s to create a successful business – but on the other hand there’s no reason to give the ultra-rich family gifts from the taxpayers.  McDonald’s cost the U.S. taxpayers some $1.2 billion in public assistance. [HuffPo]  A billion here, a billion there, and soon, as the late Senator Everett Dirksen opined, it starts to add up to real money.  That would be real money Mom and Pop are paying in taxation to support their competition.

And then there’s the concept – repeated to the point of redundancy – that increasing wages increases aggregate demand, and increased demand produces increased sales, and increased sales yield increased profits – for any business, large or small.

We should be asking Nevada politicians who are out seeking our votes this season: Do you support raising the minimum wage in Nevada to $15.00 per hour?  If what comes back is a “No” qualified by the standard talking points – it’s just kids, or it’s just a few jobs, or it’ll kill employment – then the politician in question is simply regurgitating the corporate line, the big corporate line.  The big corporate lie.

We’re waiting for Yes.

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