Minimum wages and minimum ethics?
The current national minimum wage is $7.25. Many people claim that this is not a "living wage," although the reality is there are workers earning such a wage and sending money back home to their families. These workers endure unenviable lives, often living with four or six workers in a two-bedroom apartment and eating bland meals. The ethical issue is whether we have a duty to raise wages for low-wage workers.
There are well-worn arguments (which does not make them any less true for being well-worn) against raising the minimum wage. These arguments include that raising the minimum wage may result in people losing their jobs or employers not creating new jobs; that many, if not most, workers earning the minimum wage are not the primary breadwinner for their families; and that persistently high unemployment rates among African-American youth may be a result of the minimum wage‘s passage decades ago.
Aside from these arguments, rank hypocrisy is involved in the minimum wage discussion. Years ago, when then Speaker-of-the-House Nancy Pelosi was pushing hard to raise the minimum wage, researchers discovered in the fine print that Pelosi was trying to exempt employers in American Samoa from the proposed increase. How is Pelosi associated with American Samoa? It turns out that several tuna canneries have headquarters in Pelosi‘s congressional district; they operated canneries in American Samoan. These cannery owners undoubtedly persuaded Pelosi of the rightness of their cause, although campaign donations often heighten the rightness of a cause. Republicans, too, insert similar clauses protecting favored individuals.
There are some vulnerable groups of Americans who are not covered by the minimum wage. When such legislation was passed decades ago, southern legislators made sure that the legislation did not apply to farm workers. In order to secure votes of southern Democrats, President Roosevelt and northern legislators (Republican and Democrat) had to acquiesce to such demands. Once the southern planters mechanized planting and harvesting, they often cast their workers adrift. Their opposition to the minimum wage (and to social security) then evaporated.
Currently, non-profit organizations are permitted to pay their workers with disabilities wages well below the minimum wage. News stories abound of Goodwill, Salvation Army, and other charities employing disabled workers in their stores and warehouses and paying these workers only a few dollars per hour. The CEOs of such non-profit entities assert that they cannot afford to pay $7.25 an hour to severely challenged workers. No doubt their argument is correct, but for-profit employers do not get to use the same argument.
But why should non-profits be allowed to pay below the minimum wage? Just because an entity is "doing good" should not mean it gets special dispensation.
For-profit employers would probably hire many more workers, if they could pay less than $7.25 per hour. If you watch a movie from the 1940s depicting contemporary America, for instance, there were elevator operators, hat-check "girls", and other unskilled workers. These workers were paid low wages, because the services they offered were not particularly valuable for the customers or for the employers. Between the minimum wage and rising labor productivity, such jobs disappeared (and so did staple characters in various detective movies). In China and other countries, one often sees listless workers sweeping streets with bamboo brooms; the brooms are not particularly effective, but I suspect the workers are paid by the government. Presumably they are not paid much, since the value of their services is low.
Prison inmates are another group being paid wages way below the minimum wage. Some of these inmates may be productive enough to justify $7.25 per hour. What are the justifications for paying prisoners dimes or quarters per hour? Because they are receiving room and board? Because they have committed crimes? What if some inmates are innocent?
The minimum wage, therefore, raises troubling questions. Why do we permit over-riding employer‘s and employee‘s rights to freely contract with regard to wages and job conditions? Why don‘t we cover some of the most vulnerable workers? Since the minimum wage hurts some low-skilled workers, is it just to benefit other workers at these low-skilled workers‘ expense?
The views and opinions expressed are those of the author and do not imply endorsement by the University of Northern Iowa.