Minimum Wage vs. Living Wage
by Robert Russo
With national, state and local elections crisscrossing this year and next, a slew of fiscal promises are out there, some of them more realistic than others. Minimum wage always crops up but now states are debating how to comply with the Fair Minimum Wage Act (which decrees a gradual increase from $5.15 to $7.25), or to exceed it. Right now it is $5.85 until September.* And yet despite this measure people with competitive jobs can't support themselves and dual-income families are in debt. Virginia has no minimum wage laws of its own and relies on the federal rate, not counting jobs with some kind of exemption. Kansas currently has the lowest at $2.65.**
This problem is being tackled in a variety of ways. Yesterday Connecticut approved an increase to $8 starting next year. Illinois has an increase of 25 cents a year until 2010, while many states adjust their rate continuously based on inflation or the U.S. Consumer Price Index.** One idea for employers that can't afford to raise their rates is to increase benefits instead. Another is to stop paying hourly wages altogether and make them salaried.
Living wage is compensation based on a person's cost of living. In Europe this standard dictates a set lifestyle one is entitled to by their profession ("housing, food, utilities, transport, health care and recreation").*** This comes from a different school of thought than capitalism where wages are only a contract for doing the hired tasks. It suggests private businesses have a greater responsibility to the community, closer to socialism. Maryland and North Carolina are known for their campaigns to bring the minimum wage closer to the living wage for a given area, while other locales have posted restrictions on it.***
The downside to this is capitalism (especially laissez-faire) says an individual's life is in his own hands. An employer has no control over where he lives, how he chooses to spend and what his goals are. If employers took a more direct role in providing the needs of their workers, a set amount going directly to the landlord, another to the doctor, and allowances for food, fuel and spending money, they would become the new target of those who profit off the individual by raising those prices, along with any bad decisions he makes and unforeseen disasters that befall him.
There's a point where businesses can't say their employees' lives are not their business, which is where pensions and health plans come from. But this involvement is just a hairsbreadth away from owing your soul to the company store, which is where infringements on our rights come from (i.e. penalizing smokers and overweight people for having more health expenses). This catch-22 comes from wanting equality and laissez-faire when the current system is so economically mismatched the highest percentile would instantly gobble up the rest of us.
The only true solution is to lower our dependency on money and the workplace. Currency gives control over our lives to whoever has the most of it, and is therefore an enemy of true self-sufficiency and a smokescreen to the true cost of living, our needs overwhelmed by fees and gratuities toward our masters in every aspect of life. We require allowance to do almost anything and this makes us children competing for quite a pittance. The Dept. of Labor lists the minimum wage schedule and developments for each state at www.dol.gov/esa/minwage/america.htm, as does en.wikipedia.org/wiki/List_of_U.S.A._minimum_wages. Here are some resources on the living wage movement:
http://acorn.org/index.php?id=10265
http://www.livingwage.geog.psu.edu/
http://www.epi.org/content.cfm/issueguides_livingwage_livingwage
http://en.wikipedia.org/wiki/Living_wage
http://www.letjusticeroll.org/
* http://en.wikipedia.org/wiki/Fair_Minimum_Wage_Act_of_2007
**http://en.wikipedia.org/wiki/List_of_U.S.A._minimum_wages
*** http://en.wikipedia.org/wiki/Living_wage
Question of the Week: As an employer or employee you are the only person who knows exactly how much of a role a business should have in your life. What is the first thing that would put it closer to having that role? Is there no one move that won't eventually push everything one way or the other? Send your thoughts to russo@richmondliberty.org.
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