Increasing the minimum wage and income inequality will continue to dominate the news in 2016. It is expected that income inequality will take center stage during the presidential nominating and general election campaigns.
Income inequality is not something that will be corrected by protests in the street; it would take systemic changes in tax laws, lobbying rules and reforms of campaign finance laws.
Increasing the minimum wage can be accomplished at the ballot box. Voters sympathetic to workers’ demands for a higher wage are not necessarily the people who would benefit. Oregon has one of the highest minimum wages at $9.25 (the federal minimum is $7.25); a measure in the 2016 general election would call for an increase in our state’s minimum to $15 by 2019 and annual increases after that.
Businesses say that an increase will force them to raise prices; some businesses say a wage increase will cause them to cut jobs. An increase in payroll also increases a businesses’ tax bill as well as increased contributions to Medicare and Social Security. Business has always passed on its increased expenses to its customers, a wage increase would be no different.
Reasonable people would not begrudge a fellow citizen from earning a life-sustaining wage. The debate will come down to what a living wage is. A post-high school teenager earning $9.25 an hour might be quite satisifed with the wage, even working part-time. A single mother of two would probably not be satisfied with that wage especially if child care is part of her weekly expenses.
A household earning less than $15,000 per year is eligible for the Supplemental Nutrition Assistance Program. An eventual increase of the minimum wage to $15 would make many workers ineligible for SNAP. Unless the eligibility ceiling is increased along with the minimum wage, in which case nothing would change. In that scenario the minimum wage sought would continue to climb.
The marketplace will have to decide what the minimum should be. But business should take a lesson from Henry Ford. The car manufacturer understood that thousands of his employees would be able to buy one of the cars they built if they were paid better.
Depressing wages while stockpiling cash at the top is a recipe for more than discontent; it’s a recipe for a shattered society in which everyone fights to grab their share of the economic pie. Capitalism has its winners and its losers. Once, hard work and perservence were enough to lift a person out of poverty, now that path to success is much harder—and some would say obstructed.
Financial success is available to anyone who will work smarter, harder and not feel entitled to success just because they want it. Success is seldom an overnight thing. In a world where instant gratification is the desire, success will come to those who know nothing comes easy or free.
Political and business leaders should applaud those who strive to reach the next rung. The public should demand,though, that they not put a foot on the fingers grasping for the next level.