How a $15 Minimum an Hour Wage
Helps All Workers
By Shamus Cooke
April 19, 2015 "ICH"
- Giant corporations and
the wealthy are naturally united in their hatred of the $15 minimum wage.
Surprising, however, is the strong opposition sometimes encountered by workers
who make barely above $15 an hour.
logic of these workers varies. Some simply repeat the misinformation they hear
on the media, that a higher minimum wage would cause mass inflation and
unemployment, regardless of the fact that, according
to the U.S. Department of Labor there is no evidence to support these
Some workers against $15 say such an increase isn’t fair,
since they haven’t had a raise in years and have worked hard to get what little
they have. Unfortunately, it’s becoming increasingly untrue that people “get
ahead” when they work hard. The economy has fundamentally shifted in the last 30
years to the point where the average fast food worker is now 29
Opportunities to earn a living wage have shrunk
exponentially. According to a recent
study 43 percent of the U.S. workforce earns under $15 an hour. There are
simply not enough high wage jobs to leap into; the leaping is now going in the
Regardless of their reasoning, the anti-$15 workers are
arguing against their own best interest, since a $15 minimum wage would benefit
the overwhelming majority of people who make over $15 an hour. This is because a
$15 minimum wage would transform the labor market in favor of all working
Economists have even given a term for this phenomenon, called
“compression,” which describes the effects of how rising lower wages puts
pressure on employers to raise wages for higher paid workers, marking a shift in
the labor market.
Even if an employer doesn’t give into the pressure of the
labor market and raise wages immediately, a $15 minimum wage would give workers
making over $15 enormous leverage to demand such a raise, since they could
easily prove by market comparisons that they’re being underpaid. Feeling
empowered to make demands is the first step towards achieving them.
The labor market works a lot like other commodity markets, and
is affected by supply and demand (for example unemployment) as well as
regulation (like the minimum wage). Of course, the labor market is different in
that humans can demand higher prices for themselves, where widgets can’t.
A higher minimum wage drives all wages higher in the same way
a low minimum wage drives wages lower. For example, when one company lowers
wages, other companies often follow suit. If a couple of large companies lower
wages at once, the market begins to shift, since workers have less opportunities
to find higher wages elsewhere.
The workers either fight to maintain their wages usually by
forming a union or succumb to their new, lower wages, which quickly form a new
equilibrium for the labor market in that industry, affecting other industries
indirectly. No workers’ wages are safe if they are surrounded by low wage
workers; islands of high wage workers are always targeted in such an
environment. It’s only a matter of time.
In the same way that corporations are constantly striving to
lower wages, it’s the job of unions to raise them. It was not the good grace of
the corporations after World War II that created a U.S. working class able to
purchase cars and homes, but a strong union movement that raised the price of
wages to such an extent that the market was altered in favor of all working
people, union and non-union alike, since employers had to raise their wages to
compete for workers who would otherwise have gone to work for the unionized
But the post-World War II wages were smashed by the Reagan
administration that sought to re-align the labor market in favor of the
employers. Reagan knew that by attacking unions he would be able to lower the
wages of all workers, and this attack on unions has continued ever since, creating
massive income inequality in the process, regardless of whether the
Democrats or Republicans are governing.
The wealthy often argue that a $15 minimum wage would cause
harm to workers by ruining small businesses and causing layoffs. Again, there
has been much study and little
evidence that raising the minimum wage causes unemployment. This isn’t to
say that all businesses would flourish under a $15 minimum wage. It’s true that
some small businesses would fail, but it’s also true that others would flourish
with new customers, expanding and hiring in the process.
Some entrepreneurs will capitalize on a $15 minimum wage, in
the same way that some businesses thrived, like Google and other companies, when
regulations were placed on Microsoft to curb its monopoly power.
When the economy is stagnant due to monopoly control or
because consumers are too broke to afford to consume new regulations, like
breaking up monopolies or a $15 minimum wage, can reinvigorate the economy.
The U.S. economy is constituted by 70 percent consumer
spending. Raising the national minimum wage would inject as much as $450 billion in
the U.S. economy each year, money that entrepreneurs would have the opportunity
to chase after.
A $15 minimum wage would also save taxpayers an estimated
$153 billion a year, according to a study by the University of California,
Berkeley. This is because companies that pay low wages force workers to get food
stamps and other benefits to help offset their low wages
Corporations always scream economic Armageddon every time they
are threatened with a new tax or regulation. But taxes on the wealthy were 90
percent under several presidents and were only substantially lowered once Reagan
came into office. The corporations are screaming because their profits are
affected, not because the economy as a whole is in danger.
The economic arguments in favor of a $15 minimum wage pale in
comparison to the human arguments. No one deserves to live in poverty. The last
30 years have drastically skewed labor relations in favor of the employer,
lowering workers wages, health care, pensions, and job protections in the
process, creating massive poverty and economic uncertainty. This dynamic is now
considered “normal,” where 30 years ago it was considered a radical anti-worker
A $15 minimum wage is the quickest, most direct route to
empower working people, and directly intervene into the labor market on the side
of the workers. We cannot allow people to say that $15 is too much, when the
focus should be on how ridiculous the current minimum wage is.
Unions and community groups have the power to achieve a $15
minimum wage if they prioritize their resources and work collectively. Half of
the states have voter initiative measures, a process that could begin
If unions want to prove themselves relevant to non-union
workers, they have no better opportunity than the “Fight for $15.” By winning
$15 for everyone, unions will be less vulnerable to the rhetoric of the
“overpaid” union worker, since lower wage workers will see a boost in their pay
due to the work of a union-led campaign. There’s no reason to settle for less
is a social service worker, trade unionist, and writer for Workers Action (www.workerscompass.org).
He can be reached at firstname.lastname@example.org