Nancy Pelosi, the new speaker of the House, has told us that
she will call up as maybe the very first order of business
increasing the minimum wage. Here are the relevant facts:
The federal minimum wage, enacted in 1938, was last raised in
1997. From that point on, with certain exceptions, you could not
lawfully hire someone to work without paying him or her at least
$5.15 per hour. Paying that much would yield $206 per week, or
$10,712 per year. A different federal agency defines poverty as
annual earnings of $9,827 or less for a single person. The
mathematics of the above informs us that the existing federal
minimum wage barely keeps a single worker out of poverty.
Of course, many states and localities have enacted higher
minimum wages than the federal one. In San Francisco, you need to
pay a worker $8.50 an hour; in New York state, $6.75; in
Wisconsin, $5.70.
We learn that 60 percent of minimum-wage earners -- two-thirds
of them women -- are working in restaurants and bars; 73 percent,
by the way, are white, and 70 percent have high-school diplomas.
Nearly 60 percent work part time.
Now we can leech from these figures several observations:
(1) It can be very difficult to tell what a minimum wage
worker is actually making. Many of those who work in restaurants
and bars receive tips; then again, the minimum wage is
substantially lower for people in that situation.
(2) A high-school diploma will not in and of itself give the
worker merchandisable skills o'erleaping the minimum wage.
(3) Since there are part-time workers who receive only the
minimum wage, a moment's reflection makes it obvious that they
receive, by whatever means, income that makes life possible.
Now on the matter of what to do about it, we should begin by
acknowledging that any argument for circumventing the market wage
is sophistry. The market will tell you, even in San Francisco,
what you need to pay in order to hire an hour's labor. But
sophistry is sometimes in order. We do not allow child labor --
except in certain circumstances: Peter Pan, at the neighborhood
theater, is allowed to work even if he is only 12 years old. Continued... |