Another Assault on Minimum Wage

 

        Today’s op-ed in our decidedly right leaning newspaper was Jackie Cushman taking yet another shot at the $15 minimum wage. She quotes Art Laffer (supply side/Laffer curve) as stating that some American workers aren’t “worth” $15 an hour. Back when Laffer was 16, in 1956, the minimum wage was $1.00 hourly. The Consumer Price Index (CPI) in December of that same year was 30. The CPI at the end of 2020 was 260.47. Adjusted for inflation from when Professor Laffer would have been a minimum wage earner (assuming he ever worked such a job and can even identify with that situation), the minimum wage should be just $8.68. One assumes it is calculations like this which Laffer uses when denigrating the $15 /hr.

        However, consider that Laffer, a child of privilege and a professor by 1970, having earned a Yale BS and MBA, followed by a Stanford PhD, probably never worked a minimum wage job. Ever.  The fallacy here is the assumption that $1.00 was a living wage in 1956. A 40 hr./wk., 50 wks./yr. earner would have grossed only $2000 annually and that was a hair over the poverty level at the time. Adjusting for inflation, that is $8.68 which is still higher than the current (and still in effect) $7.25 hourly.

        So, having established that the current mandated federal minimum is inadequate to maintain a single earner household, even without children in the mix, let’s look at the number of such earners in today’s workplace. In 2017, the last year for which complete data is available, 80.4 million workers ages 16 and older in the United States were paid at hourly rates, this represented 58.3 percent of all wage and salary workers. Among those paid by the hour, 542,000 workers earned exactly the prevailing federal minimum wage of $7.25 per hour. About 1.3 million had wages below the federal minimum. Note that! More workers were paid less than legally required than were paid the exact minimum! Together these 1.8 million workers with wages at or below the federal minimum made up just 2.3 percent of all hourly paid workers. Why mention this? Because in 1979 when this data was first collected, that percentage was 13.45.  In simplest terms, fewer and fewer workers are working at or below the minimum wage level.

         This, in essence, means that we have an increasingly small minority of workers who continue being either underpaid or earning the bare legal minimum. It seems easier to denigrate these folks as their numbers decrease, doesn’t it? At least it does to those like Jackie Cushman or Art Laffer who, with no personal basis for comparison, ignore or minimize the impact on the lives of those who, with no skill training, must work two minimum wage jobs to maintain a bare poverty level household.     

        Ms. Cushman then continues with an account of being in two different fast food “places” and of the widely different service she experienced in each. Without the gory details, service was prompt and courteous in one, while in the other, she and other customers were forced to wait, and service seemed disinterested and lackluster. She then made the incredible leap of illogic of citing the second experience as "proof" that a $15 minimum wage is unjustified.

        It was at about this point that my own personal experience in management at several levels kicked in as I called bullshit! I have “managed” the seaman gang on a submarine, over 100 high level senior instructors in a challenging Naval Nuclear Power School curriculum, and six classes per day of high school students, and oddly enough, they all required the same skill set to a significant degree.

         I would wager that a look behind the scenes at the fast-food place which disappointed Ms. Cushman might well reveal conditions with which she is unacquainted or more likely unconcerned. Short staffing comes to mind at first. Another and far more significant issue, however, is the management skill set and, as important or even more so, the leadership ability of the supervisors of these folks. A great team of minimum wage folks can suffer under poor supervision by someone who is being compensated much higher for the job they are “supposed” to do.

        The father of the US Navy’s nuclear power program, Admiral Hyman G. Rickover, had a saying which has remained with me since first I read it. “You get what you inspect, not what you expect.”  This does not necessarily mean micro-management, but rather engagement, presence and guidance, where necessary, as a prime component of leadership. Managers provide materials, schedules and orders. Leaders encourage their personnel to want to meet those expectations and, yes, provide the management component by making sure the team sees itself as one and feels empowered to make suggestions to supervisors as appropriate. Yeah, listening is a significant component of leadership, too!

        We see this in all levels of the workplace. Management frequently seems concerned only with the end result or product. Leaders are concerned with the process as well.

        A well-managed, encouraged, and “led by example” staff of fast-food workers will meet expectations with a smile and be worth every bit of $15 /hr. Those that need help meeting expectations should be coached and encouraged, those who won’t, should be terminated, not tolerated. That means leaders and manager need to make encouragement, guidance and, where required, correction, key parts of their job. Additionally, they need to do realistic evaluation and provide feedback.

        And, in simple humanity, those who are privileged and/or well off, for whatever reason should stop devaluing the humanity of those who, whatever the job, do it to the best of their ability.