A little more than half a century ago, I had summer job at a factory. The work was unskilled manual labor, and the job paid $1.98 per hour. Gasoline was 30 cents per gallon. An ice cream cone sold for nickel a scoop, and coffee was a nickel per cup.
Today, prices for the things we buy are 10 to 20 times higher than they were when my unskilled manual labor job paid $1.98 per hour. Minimum wage, however, lags far behind. The federal minimum wage is $7.25 per hour. State minimum wages are higher in some states, but not much, except in Oregon ($9.10) and Washington ($9.32).
How did the minimum wage fall so far behind rising prices? Three things come to mind.
Most of the manufactured items that most of us buy are imported from ultra-low wage countries. That allows the importing company to sell the products at low prices and still make a handsome profit. The availability of those low priced goods helped minimum wage employees survive, but it obscured the fact that the minimum wage was not keeping pace with the American economy.
Secondly, taxpayers subsidize employers who pay minimum wage. Minimum wage employees, not always employed full-time, often require assistance: unemployment compensation, food stamps, aid to families with dependent children, or other financial assistance.
Finally, charity, commendable as it may be, has helped obscure our failure to address the deficient minimum wage.
According to the U.S. Department of Health and Human Services, an individual who earns $11,490 per year lives in poverty. An individual, who works full-time for federal minimum wage, earns $14,500 per year, not much more than the poverty level. And, if that person isn’t employed full-time or supports family members, minimum wage is surely inadequate.
In 1914, during the early years of the Ford Motor Company, Henry Ford suddenly raised his employee’s wages to more than double the going rate. When asked why he did so, he reportedly replied: “There is no point in producing automobiles unless people can buy them.” No matter what your job, you sell a product or a service. If people cannot afford to buy those products or services, you lose. Everyone loses when people are unemployed or attempting to survive on insufficient income.
A country that could afford to pay four hundred dollars per gallon to ship diesel fuel to its forces in Afghanistan, as we did, can also afford to pay its own citizens a reasonable wage.
— Jack Stevenson is retired and now living in Florida. He served two years in Vietnam as an infantry officer, retired from military service, and worked three years as a U.S. Civil Service employee. He also worked in Egypt as an employee of the former Radio Corporation of America. He can be reached by email at Sheavybones@AOL.com.