Slavery and the Minimum Wage
Remarks to Maine Chamber and Business Alliance - Portland
April 18, 1996
When we were young hippies in the woods, more than 20 years ago, we really wanted a milk cow. So we set about to clear and fence a pasture. An old farmer who lived down the road stopped by one day, gazed across the scrub expanse we proudly showed him, shook his head thoughtfully, and said, "A cow can't make a living on that."
That's the situation we have today with the federal minimum wage. You can't make a living on it.
The minimum wage should be a living wage. People who work full time, 40 hours per week, 50 weeks a year, should be able to provide the basics for their family's survival.
If the minimum wage had kept pace with inflation, it would be in the neighborhood of $6.50 per hour right now. That's $13,000 per year, not much for a family to live on, but a darned sight better than the $8,500 per year the current minimum wage brings in. (Those figures are now about $8.65 per hour or $17,300 per year, versus $10,600 that the current $5.15 federal minimum wage now brings in.)
We bought our cow anyway, way back when. We let her into that scrub pasture, and put her to work making milk. But we were smart enough to supplement her meager diet with high quality hay cut on fields in much better shape than ours - which we paid for with cold, hard cash.
Right now we American taxpayers are using our cold hard cash to supplement the financial diet of those people working for minimum wage. It's a supplement called the Earned Income Tax Credit.
Even though this supplement is paid directly to workers, the Earned Income Credit is in reality a business subsidy, one which lets off the hook those businesses which pay substandard wages. Through this credit, we taxpayers are subsidizing - to the tune of between $1 and $1.50 per hour - those businesses which pay working parents up to $5.65 per hour. This is happening now. Check your 1040 instructions.
This can't go on.
Yes, we've all heard those "sky-is-falling" phrases, that businesses will close if they have to pay a living wage. I don't buy it. And I don't buy it because that kind of thinking is painfully similar to the language used in the South before the Civil War, when the plantation owners insisted that the slaves could not be freed because the economy would collapse if they had to pay a living wage to the workers in the field.
This is not so much about money as it is about fairness. Many of us have this strange idea that America itself is about fairness, along with justice, liberty, and all the other good stuff.
We Americans are getting tired of being played for suckers, both as employees and as taxpayers. This concept of suckerdom started to dawn on us when, quarter after quarter, record profits were posted by the fast-food chains whose names are synonymous with the lowest of wages.
This has got to stop, and a good place to draw the line is to insist that the minimum wage be a living wage, now and in the future.
When I get to Washington, I will work hard to make the minimum wage a living wage. Right now, that would mean around $6.50 an hour. I contend that, as a general rule, workers should be paid by the people who employ them, rather than by the taxpayers through the back door. And I bet deep down you agree with me.
I not only expect workers to support me on this. I expect you, as business leaders, to support me on this as well.
Because the handwriting is on the wall.
And, because it's the right thing to do.