Minimum Wage Thoughts (Tevye Edition)
Thinking about Minimum Wage:
The federal minimum wage is not a wage that, given a 40-hour work week, would provide enough money for most people in most parts of the US to be able to meet all their basic needs (i.e. a living wage).
One the other hand, the work typically thought of as minimum wage work is low value and (according to opponents of minimum wage) not meant to be the kind of work an adult should be trying to support themselves or a family on.
On the other hand, employers who offer work at minimum wage will tend to hire a responsible adult over a teenager, especially for shifts during the school year/day.
On the other hand, adults should not be looking for unskilled, minimum wage work as a career or to support a family.
On the other hand, far too many adults have few, if any, marketable skills, because primary schools are no longer meeting the education needs of the emerging workforce.
On the other hand, employers have all but given up on the idea of on the job training (or other advanced training) for all but the basic skills needed to do the job, or for the most dedicated and competent employees.
On the other hand, secondary education is widely available across the land and online.
On the other hand, market distortions, etc. have made access to much of that secondary education out of reach for the average minimum wage worker. Social expectations have also made some career paths unattractive to the emerging workforce. But this is getting into education policy now, so let’s set this aside for a moment and go back to the beginning.
On the other hand, raising the minimum wage can boost the purchasing power and living conditions of a great many people.
On the other hand, a rising tide truly does lift all boats, and prices will rise in response, especially among businesses that operate on very tight margins, which are very often the same businesses that minimum wage workers frequent.
On the other hand, prices might remain low while marginal businesses find other ways to cut costs, such as layoffs or paying people under the table.
On the other hand, marginal businesses may just fold, depriving communities of their products and services, further cementing the large corporation as the primary provider of such things.
On the other hand, large corporations are best situated to absorb and manage the costs associated with an increase in the minimum wage.
On the other hand, going back to rising prices, areas heavily dependant upon tourism, or upon the cash flowing out from larger businesses that employs low wage workers, may find themselves with a reduction in tourism, or a reduction in jobs as affected employers layoff workers, fold, or flee.
On the other hand, a tide that rises nationwide results in few places to flee to.
On the other hand, it makes it easier to raise prices across the board, which washes out the effects of the hike in the minimum wage.
And here is the catch-22.
Now, assuming all my hands are true statements, and I did not miss any critical ones, this strengthens in my mind the switch to a Guaranteed Basic Income. Something that the fed sets a floor on, ties to inflation, and states and cities can supplement according to a cost of living index (if they happen to be a place where the cost of living easily exceeds the federal minimum). A GBI can remove the need for Social Security, food stamps, section 8, unemployment insurance, and a minimum wage (which streamlines welfare services, saving us money). Yes, I said minimum wage. The GBI becomes, in fact, the default minimum wage.
It works like this. Say the GBI is $30K/year (~about $14.50/hr). You pay no taxes on it, you just get two checks a month for $1250.00, no questions, no strings except a requirement to report income. If I am a high school grad, and I’m living with three friends, $30K/year is probably enough for a basic, easy living. If McDonalds wants me to come work for them, to wear a silly uniform, and stand behind a counter dealing with annoying people all day, or slinging burgers, they are going to have to find a way to incentivize me to work for them beyond just paying me $15/hr. Either they’ll pay me well above $15/hr, or they’ll have to offer some kind of other benefit (education or training benefit, etc.). Of course, McDonalds may just decide to mostly automate their entire restaurant, but would that be such a bad thing? The thing is, no one is forcing McDonalds to pay anyone anything. McDonalds can’t play the victim and say, “Woe is me, I have to pay these unskilled layabouts more than their worth because the government is forcing me to at the proverbial barrel of a gun!”
Of course, a GBI will have it’s issues that will need to be dealt with. Parents on the GBI will need stipends for children, and someone will want to make sure we don’t have welfare queens with 12 kids because the checks get big and fat (whether or not such a thing will be enough of a problem to be worth talking about is, of course, besides the point).
We’ll also need to watch out for people moving to popular destinations just because it’s an attractive place to be and they don’t have to worry about finding a job to support themselves (I can just see the Florida Keys over-run with Parrotheads).
And we still have to do something about secondary education and job creation, because people living on the GBI have to remain a small minority or we’ll be in trouble. Although a GBI can help people establish good credit (this is common amongst military members).
But at least we can stop having a discussion every damn election season about minimum wage.
 &  This goes to both education policy, as well as the availability of good paying jobs where people live. Adds support for some kind of education &/or relocation benefit.