President Biden spoke yesterday responding to questions about the nation’s supposed “labor shortage.” “Pay them more,” he urged employers across the land on national television. I wonder if there are any other policy options besides trusting private industry not to exploit and squeeze their workers.
Other than the ridiculousness of trusting firms everywhere to take on the responsibility of paying their workers a livable wage, president Biden seems to have no interest in leveraging the power of the law to raise the minimum wage to $15 an hour. It ‘s so simple: If lawmakers wanted to pay people more than starvation wages, they would. There is no legitimate reason, if history is any indicator, why all firms and companies would otherwise step up and do the morally right thing and raise the wage if not for the legal incentives to do so.
After several years of complaining and crying, even Chipotle raised their wages after massive blowback and worker protests. They only raised their prices a modest amount in response to the wage increase, a compromise their customers are still willing to accept for the cost of better pay. They had the money all along, and only after immense public pressure did they finally make a shift. If you can afford to purchase more of your company’s stock, and especially after decades of generous corporate welfare and tax benefits, you can afford to pay employees enough so they can afford to feed themselves.
While a $15 federal minimum wage is a good first step, it is still not enough to get many people by. If you were working an 8-hour shift every weekday throughout the entire year, with no breaks or vacation in between, you would only take in roughly $31,000 in pre-tax income. The well-compensated, establishment Dem leadership is visibly unwilling to lift a finger for many people, and people of color and women, by simply raising the wage.
The fight has gone on so long now that the $15 mark is no longer sufficient to maintain a decent standard of living in the U.S. If indexed to inflation, a proper federally mandated minimum wage would be well over $23 per hour.
Opponents argue that a raised minimum wage is bad for business. They parrot the tired trope of long debunked studies that ostensibly show that somehow giving people more money for their labor is bad. There is no sense to which these beliefs are true and they should not continue to dominate labor policy. The actual good news is that a raised minimum wage is overwhelmingly beneficial to everyone.
Give poor and working class people more money, yes prices may rise as a minuscule fraction of the increase in wage (not to mention the cost of everything has already gone up without the wage increase), but the increase in pay means people can save more and inject more of their money into the economy. As it stands now, poorer Americans typically spend everything they make with little room for savings because they do not make enough. Giving people the breathing save to save and pursue other activities is a markedly better economic situation and widely preferred to the current paradigm.
In sum, there is no labor shortage. From one perspective, there are just not enough people willing to work for poverty wages and subject themselves to workplace abuse for minimal pay while they struggle to make rent. There is, however, a shortage of employers willing to pay their labor a living salary. This framing of the question of who is at fault and who “deserves” what solely lies in the narratives of bad economics. And unfortunately there is a lot of money to be made if you’re a sitting president or lawmaker who shares the opinions of a few behemoth corporate donors with soulless and retrograde opinions.