When Joseph Robinette Biden Jr. took the office as the nation’s 46th president, my focus immediately changed from the previous administration. My policy has always been to hold the individual who occupies the big chair in the Oval Office accountable.
That said, when Biden, prior to taking office, proposed $1.9 trillion to address the coronavirus pandemic and the resulting economic crisis, I winced slightly at the inclusion of raising the federal minimum wage to $15 per hour. My concern is not in opposition per se, but my hope was that the new president would provide a new way to discuss a critical issue.
The passage of the Fair Labor Standards Act in 1938, which established a federal minimum wage, represented a major shift in labor policy. For the first time, the federal government established a minimum standard at which employees were to be compensated.
Has that rationale changed? Are the reasons for baseline compensation established in 1938 different in 2021?
On the surface it would appear that calls for a $15-per-hour federal minimum wage reflect an increase of more than 100%. There are currently 29 states, in addition to Washington, D.C., that already pay a higher wage than that. The current minimum wage debate is an intractable binary conversation languishing between economic and moral considerations.
High-wage cities like San Francisco and New York already have $15 or higher minimum hourly wages. The change would be negligible. But in low-wage communities, where the minimum wage is much closer to $7.25 and, perhaps more important, where the median wage is closer to $15 per hour, the 100% increase would make a huge difference.
According to the nonpartisan Congressional Budget Office, "hiking the national minimum to $15 an hour by 2025 would lift 1.3 million workers above wages that put them below the poverty line.” The CBO also estimates the hike could cost $1.3 million jobs, as small businesses unable to pay their workers $15 an hour would lay people off or go out of business.
Productivity has more than doubled since 1969, but wages have not kept pace. Had wages kept pace with productivity, it is quite possible the minimum wage would more than exceed $15 per hour. The manner in which productivity has outpaced wages, coupled with the inaction to raise the federal minimum wage for more than a decade, has resulted in a regressive policy that bears more similarity to working conditions prior to the Fair Labor Standards Act.
I support raising the minimum wage. It’s been 12 years since the last increase. But I also find that a hard number across the board is incongruent with today’s economy. Because the minimum wage is a moral issue, it must be removed from the binary conversation that dominates it.
At $15 per hour, assuming full-time work, it could place some individuals within the median income of certain communities. If so, that would be economically unsustainable, an unintended consequence that’s foreseeable.
The American economy is not a single entity. Therefore, policies that address it in a one-size-fits-all manner are destined to be ineffectual regardless of their good intentions. Why not consider replacing calls for a hard $15 per hour with a model that ties the minimum wage to a percentage of GDP in that local community? This would increase the federal minimum wage above the current $7.25 per hour, but remain commensurate with local economies. In some cases, it would be higher than the $15 per hour proposal.
My suggestion is not a panacea, but the failure to consider the economic and moral considerations on both sides would be a disservice.
As I have offered in previous columns, the final outcome is not nearly as important as the journey. Can we hold to our current position on the minimum wage while authentically factoring the salient point offered by the opposition?
This is not to suggest that the president and his team were unaware of these considerations. But I would like to see Biden move the conversation beyond the restrictive and unproductive nature of our current public discourse. I want him to use his newly acquired bully pulpit to explain that the minimum wage is a complex moral issue, and both sides have a claim to that moral argument.
Moreover, the minimum wage is merely part of an important conversation that includes single industry communities that have been unable to recover since manufacturing jobs that paid livable wages moved overseas.
I also realize it is customary that a newly inaugurated president is afforded a honeymoon period before concerns and criticisms are levied. But this is 2021 and the new honeymoon period has been reduced to 72 hours.
The Rev. Byron Williams (firstname.lastname@example.org), a writer and the host of "The Public Morality" on WSNC 90.5, lives in Winston-Salem.