Because that’s being generous regarding this drivel by the Washington Post’s Catherine Rampell, which I stumbled across from this link by MTV’s Jamil Smith (boldface mine):
Right now a number of bad ideas booming on the left need a credible, coherent, megaphoned rebuttal. These are ideas that may sound nice and perhaps appear helpful. But pursuing many of them would be, at best, irrelevant and ineffective, a waste of time and resources; at worst, they would be actively harmful to the marginalized groups that bleeding-heart liberals claim to champion.
These are proposals such as bringing back Glass-Steagall, a banking law whose repeal actually had nothing to do with the 2008 financial crisis. Its resurrection is perplexingly popular on the left….
Or instituting a $15-an-hour minimum wage nationwide, even though that’s higher than the current median wage in four states and three territories.
Or free college for all, including rich people.
Or arbitrary tax carve-outs for items such as tampons (which constitute a giveaway to rich people, too, and ultimately require raising tax rates on everything else, which can disproportionately hurt poor people).
I didn’t realize that tampons were going to bust the budget. Before I get the minimum wage, if we consider the last two proposals, the best ‘means test’ is to offer it for ‘free’ and raise taxes on those who can afford it. We do that for those ‘free’ things like schools, roads, and libraries, among many other things–and it seems to work out OK. That should probably be a tell as to the seriousness of the other items. But I digress.
Anyway, the $15/hour minimum wage. I’ve noted before that a $15/hour minimum, in many cases, won’t lead to significant price increases. But more importantly, people need $15/hour–and not just in expensive areas. Of course, the wage wouldn’t go to $15/hour right away: it would increase gradually over five years, meaning if we assume inflation rates ranging from one to three percent*, in current ‘real’ dollars, that $15/hour in the fifth year becomes $12.94 – $14.27.
Over the last couple of years, the local and state offices of the United Way have created what they call the ALICE Project. ALICE stands for “Asset Limited, Income Constrained, Employed.” The project determines a livable minimum wage within individual states and counties, so you can actually look at costs in wealthy and poor communities. There are very few places where even a single person with no dependents (and no debt) can get by on less than $15/hour. “Get by” means no more than forty percent of income going to housing, and less than eight dollars a day for food. The latter is a level the Department of Agriculture refers to as “Thrifty”, which is reminiscent of how certain pants sizes for large boys used to be called “husky.” There is no slack in these budgets. Any unexpected expense, including something like a $100 health insurance co-pay, and you’ve just busted the budget. Throw any dependents into the mix, and $15/hour just doesn’t cut it. At all.
The Iowa Policy Project comes to a similar conclusion:
The Iowa Policy Project estimates “a single parent of two children who is working a full-time job would need to make $28.07/hr to cover basic, no-frills monthly expenses.” And that worker would not be getting employer-provided health insurance, or any public-assistance income.
That’s Iowa, by the way, not mid-town Manhattan.
Workers simply need $15/hour.
At this point, some will start to argue for various income supplements. That’s all fine–I like programs like EITC (and think it should be expanded**)–but even a MOAR DEFICITZ! wackaloon like myself realizes that our political system is obsessed with budget deficits. Every dollar spent supplementing lousy wages is a dollar we can’t use to fix all the broken things, including our transportation system, our schools, our scientific research infrastructure, and our public health infrastructure. While I’ll gladly deficit spend at the drop of a hat, subsidizing crappy wages at the expense of rebuilding the country is an incredibly stupid thing to do, especially when many of those subsidies, one way or another, will ultimately be income transfers to the wealthy.
There’s also the concern that we don’t know what will happen–a $15/hour wage would be outside previous minimum wage levels so anyone preaching certitude, pro or con, is full of it. That said, this will probably favor the lower-middle class and the poor at the expense of the upper-middle class and gentry classes–that is to say, the Rampells of the world (the servants for hire of the rich already get paid a lot, so it won’t affect them). Corporate profits will decrease as wealth is shifted to the formerly ALICE. There will be winners and losers, some even bigly. But right now, too many people aren’t getting by on their wages.
Because those opposing $15/hour don’t have any serious proposals to make the ALICEs’ lives significantly better. Like my Uncle Harry used to say, rich or poor, it’s always good to have money.
Aside: The conflict will come from inside the wire, not outside it. Rampell and Smith illustrate that clearly.
Related post: Steve M. at No More Mister Nice Blog has similar thoughts.
*Let’s not even get into how inflation is too low.
**If nothing else, EITC is an excellent unofficial ‘underemployment’ insurance mechanism. That said, it only pays out once per year (via tax refunds), which means people will have to borrow–and then pay additional interest–to make up the shortfall.