How Much Higher Should the Minimum Wage Be? (Much Higher)

Last week, voters in SeaTac, Washington voted to raise the minimum wage for airport workers to $15 an hour. California recently approved a statewide minimum wage of $10. As low wage workers increasingly voice their frustration with their shitty lot in life, it's time to raise the minimum wage— everywhere.

The federal minimum wage is $7.25. If one were to work full time for 50 weeks a year at that wage, one would make $14,500, which is below the poverty line for a household of two. Add to that the fact that most minimum wage workers cannot get full time hours, and the fact that many of them are supporting families (only 12% of workers earning under $10 an hour are teenagers, contrary to popular stereotypes), and the self-evidently ludicrous nature of our national standard becomes clear.

The common argument against raising the minimum wage is that it would cause employers to cut back on hiring. Not so. The economist Arindrajit Dube wrote this weekend about the latest research into this topic, which finds that fears of job loss have been greatly overstated:


In my work with T. William Lester and Michael Reich, we use nearly two decades' worth of data and compare all bordering areas in the United States to show that while higher minimum wages raise earnings of low-wage workers, they do not have a detectable impact on employment. Our estimates — published in 2010 in the Review of Economics and Statistics — suggest that a hypothetical 10 percent increase in the minimum wage affects employment in the restaurant or retail industries, by much less than 1 percent; the change is in fact statistically indistinguishable from zero.

Dube estimates that a 10% rise in the minimum wage would reduce overall poverty by 2%. That's nice. It's also evidence that we need the minimum wage to rise by much more than 10% (which would only bring it up to about $8 an hour). A $10 minimum wage would offer a full time worker a salary of $20,000 a year—a shitty salary, but enough to raise a household of three over the official poverty line, at least. A $15 minimum wage would mean a $30,000 annual salary. Of course, the vagaries of hourly work and ever-shifting schedules would mean that annual take-home pay would probably fall well under those figures.

Later this week, fast food workers across the nation will stage a one day walkout as part of their ongoing quest to shame employers into raising their wages. Shame will not work, except as a tool for motivating political will. If low wage workers in dead end jobs are ever to gain some small measure of economic security, their wages will have to be raised by law. Ten dollars an hour is a good starting point. But that should be seen as a stopgap humanitarian measure meant to be temporary, until support can be gathered for another raise, or at least for a law indexing minimum wage to inflation.


Minimum wage earners are sometimes dismissed as people too lazy to find a better job. But a land of opportunity in which there is a higher-paying job available for everyone who works hard is a childish fantasy. With a different shuffle of the deck of fate, any one of us could be earning minimum wage. The question is not "How much do those people deserve?" The question is: How much would you accept to do that job?

[Photo: Flickr]