It’s Not About Minimum Wage

Garden After Snowfall

Garden After Snowfall

Two bits of news related to minimum wage emerged last week, and neither of them represents a solution for low wage workers.

The Iowa Legislature advanced Senate Study Bill 1151 from a subcommittee to increase the minimum wage to $8.75 per hour by July 2016, with a $0.75 increase July 1 and another $0.75 a year later. The bill is expected to be debated this week by the full Senate Labor and Business Relations Committee. Rod Boshart covered the story for the Cedar Rapids Gazette here. He indicated there is bipartisan support for increasing the minimum wage in both legislative chambers.

On Thursday, Doug McMillon, president and CEO, Walmart, announced a detailed plan to increase wages for its associates. Notably, current employees will receive at least $9 per hour beginning in April, with positions expected to pay at least $10 per hour beginning next year.

“Today, we’re announcing a package of changes in Walmart U.S. that will kick off a new approach to our jobs,” McMillon said in a letter to employees. “We’re pursuing comprehensive changes to our hiring, training, compensation, and scheduling programs, as well as to our store structure, and these changes will be sustainable over the long term.”

As Vauhini Vara pointed out in her Feb. 20 New Yorker article, “working at Walmart has long been a kind of proxy, in conversations about labor practices, for low-wage toil.”

“Such conversations have received more attention in the past couple of years, partly because they speak to a problem—stagnant wages—that has been acknowledged, even by conservative economists and policymakers, as a serious one,” Vara wrote. “When the recession ended, the unemployment rate began falling to pre-recession levels, and economists predicted that a tighter supply of workers would soon send wages up, too, as has historically happened. But, puzzlingly to some observers, that didn’t happen.”

Walmart, like any business, realizes the value of associates, and adjusted its pay and benefits when it had to.

While in Des Moines last week, I spotted Mike Owen and David Osterberg of the Iowa Policy Project at the capitol. They were working on the wage issue according to Owen.

The Iowa Policy Project is a nonprofit, nonpartisan organization founded in 2001 to produce research and analysis to engage Iowans in state policy decisions, according to their web site. One of their topics is minimum wage.

IPP noted the Iowa minimum wage increased to its current $7.25 level on Jan. 1, 2008 in a February position summary. They pointed out that while Iowa was once a leader in minimum wage, it is now a laggard.

$8.75 would be something, but it is not enough.

“Minimum wage doesn’t come close to supporting a family’s basic needs budget at Iowa’s current cost of living,” said the IPP report.

Walmart’s $10 per hour is better but doesn’t get families there either.

What’s missing from this discussion is that few minimum wage earners support a family alone. According to IPP, minimum wage earners contribute 46 percent of their family’s income on average. Which begs the question, how do low-wage earners get by?

We can’t be distracted by the two minimum wage rate developments.

Any low-wage earner today knows there are plenty of opportunities to earn $9 per hour or more if one can do the work. The minimum wage has not been the problem for a long time as companies pay more to attract a viable workforce. Walmart is a large employer and receives a lot of attention. My progressive friends and I debate whether Walmart is or isn’t the problem, and I land closer to Vara—they are a proxy for another argument.

That argument has to do with the changing nature of our society. We have become a place where fairness and equal treatment has given way to pursuit of financial success at any cost. It includes business models that drive out costs, human costs particularly. Our society, through our neglect, and perhaps intent, has led us to a very harsh place. I recall Thomas Merton:

“If I had a message to my contemporaries it is surely this: Be anything you like, be madmen, drunks and bastards of every shape and form, but at all costs avoid one thing: success… If you are too obsessed with success, you will forget to live.”

All this talk about minimum wage has made us forget something important. Work is not wasted whether it’s paid or not. We must go on living and wages have little to do with that.

~Written for Blog for Iowa

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