What’s the best way to get millions of more people working? Why, by dropping the minimum wage — to five bucks an hour.
I know, you wouldn’t have thought of that either. But this guy who wrote an op ed in today’s Wall Street Journal did.
Granted, that’s behind a paywall — a paywall operated by no one making $5/hour, I’m sure — so let me share a few of the key points:
A Minimum Wage That Will Work
There’s a way to create millions of jobs for people the stimulus didn’t help.
The president’s call for a $10.10 minimum wage applies the worn-out notion that higher wages create more jobs. Despite repeated minimum-wage increases over the years, we have seen a continued flight to the sidelines by people who are unable to find jobs because they don’t exist. Many jobs don’t exist because employers refuse to hire people at such wages. Isn’t it obvious that, with a higher wage, McDonald’s $1 menu, for example, would cost $3, few would buy it, and Mickey D would have less revenue and far fewer jobs?
As a volunteer interviewer of the poor at a religious charitable organization in southwest Florida, I have come to believe that the most effective step we can take to ameliorate poverty, kick-start job growth and invigorate hope in every social stratum is to experiment with a $5 minimum wage.
A $5 wage will put money and hope into the lives of our poor in immediate, powerful and enduring ways. For all its $4 trillion stimulus, mere nickels of quantitative-easing funding “trickled down” to where the poor reside. But a $5 minimum wage will “trickle up,” directly from employer to employed—creating millions of jobs rapidly and putting them within reach of huge numbers of the poor.
Three enormous labor pools of can benefit immediately. The most dramatic change among the poor that our charity serves right now is in the demographic sector of hardworking lower-middle-class families who are being squeezed into poverty by ever-increasing food, housing, transport, medical, drug, insurance and other costs they are unable to pay. These include:
• Intact low-income families, where three or four persons have the capacity and desire to work, but only one has a job, often at a near-minimum wage that typically generates about $15,000 a year. A $5 wage that opens full- or part-time jobs for the remaining three can change that single survival income into a $30,000-plus income stream to help produce a life of reasonable comfort and dignity.
• Single-parent families, often headed by an educated young woman with one or two infants who supports a live-in partner on an entry-level job income. He cannot find a job and her hours are reduced: As wage-earner, mother and caregiver, she is in extreme stress and they are in crisis. A job-fostering program that helps the partner find work can bring immediate and potentially long-term relief to these folks.
You’d think no one can value making $5 an hour. But for those in poverty, a primal need is immediate and reliable access to an income of one’s own. When one has nothing, anything becomes priceless. Watch the expression on the face of a poor person when you provide him or her with $2, $3 or $5 to put gas in a neighbor’s borrowed car so he can bring free groceries, clothing, linens, housewares or furnishings from our organization back home. You’ll see then the value of such a “trivial” wage.
I’ll say just this: If we want to slide back to being a pre-Colonial banana plantation of low-wage workers, this is the way to go. Germany is the powerhouse of the EU — and they aren’t paying anyone the equivalent of five bucks an hour. Henry Ford created the $5 workday almost a hundred years ago (over the outrage of his competitors) so that people could afford to buy a Ford. Creating an economy where no one can afford anything isn’t going to serve anyone.