The Liberal Bias: Republicans Said, “Good Day Sir!”

Republicans filibustered a proposal to raise the federal minimum wage to $10.10 an hour on Wednesday, April 30. Thankfully, the Maryland minimum wage will still increase to that rate in the next couple of years, but this is still irritating. There are two reasons why raising the minimum wage is not only a positive action, but (as Dr. Strangelove would say) it is essential.

What it seems to come down to for the conservative side is that making a regulation that forces a company to pay a higher wage is both destructive to small businesses and punishing the success of large ones. First, the minimum wage has not been anything close to a living wage since the 1970s, if ever. The problem is that the country’s economy has been doing relatively great over the decades. While those larger companies have been seeing their productivity increase, they have also seen CEO and executive pay steadily increase as well. The people who do not see those increases with productivity are their average paid workers. That’s “average,” so I am not even referring just to their lowest paid workers.

This means that all of those little cogs in the corporate machine have been working and producing more and more over the decades, but have not seen raises that reflect their hard work. And who is the “fat” that gets trimmed when a company does not do as well as last quarter? It is rarely the executive staff. Essentially, you have people working harder at a company than they had 30 years ago, but also the first people to be fired when a company downsizes. I think paying them a little more than $7.25 an hour is not asking too much.

A wage hike across the board would also actually be beneficial to smaller businesses. I worked at a place once where the boss was a franchise owner of a larger chain. The owner did not like the idea of the minimum wage increasing in 2009. It was all “lay-offs” and “price increases” in the months leading up to it. So, it was a shame when he had to close his business because he had to pay everyone more, right? No. Business increased steadily and prices actually went down. Oh, and employment went up. What happened?

Simple. It is easy to just say to small business owners that an increase in wages will mean more cost to the owner. That is true, I am not going to argue against that. The problem with that message is that it also means that all other businesses have to pay that new wage as well. That means that many of their customers are now getting more money to spend.

If you want an example of this on a Macro scale, just look at our increasingly recovering economy which crashed in 2008 and which raised the minimum wage in 2009.

I know that you cannot say that the recovery is just because of the minimum wage increase, in the exact same way that you cannot say that a minimum wage increase would ONLY cost people money.

Finally, here in lies the rub. The poverty income line in America for a family of three is around $23,000 a year. Anyone family making less than that is considered impoverished. The line for singles is around $16,000 a year. At 40 hours a week, getting paid $10.10 an hour, you can make $19,392 a year. After taxes in Maryland, that wage will net you somewhere in the area of $14,544 a year. A family of three in Maryland couldn’t even get past the single’s poverty line.

Tell me again how increasing the wage to $10.10 will destroy the economy?