The Conservative Case for raising the Minimum Wage

If you have ever worked a minimum wage job, you understand why they call it a starvation wage- if you were trying to live on just that wage, you would starve. While the minimum wage has remained stagnant in most of the country, cost of living has risen dramatically, especially in cities. 

This graph can be a little confusing, the bottom line is what the actual minimum wage was. The top line is what that amount would have been if adjusted to 2016 dollars. The graph shows that minimum wage in the 70’s was worth more than then our current $7.25, that is because minimum wage has not even been adjusted for inflation. Inflation is what explains the fact that $2/hour bought much more in the 1970’s than today, you can buy less per dollar. This graph shows long periods without any rise in the rate, even as the rate itself was providing less. 

You’re wondering, what the heck is conservative about this so far, buckle up. First let’s refresh the definition of working class. Then let’s dive into corporate welfare, and how the Walton’s are the true “welfare queens” that Reagan raved about. 

COVID showed us the value of a job is not reflected by the rate it pays. Hedge Fund managers and big tech executives didn’t offer a thing to us during COVID, it was the minimum wage grocery store worker, the uninsured Rideshare drivers delivering food, and the working class. It is all too common among elite circles to hear the argument, “fast food workers don’t deserve more pay because it doesn’t take any skills or qualifications to work there.” ”If they want more pay they should work somewhere else or learn a skill”. Or a slightly less hostile “McDonalds has to pay that low to stay in business, its supply and demand, after all, you like $1 burgers don’t you?”

This thought can really only come from lack of experience in the other person’s shoes. COVID has really uprooted many of the seeds of anti-worker sentiment running rampant in the US for 30 years. Thankfully Americans writ large are empathizing with the massive class of working poor in this country. While anyone with a salaried job and benefits was and is understandably nervous about losing their job, they saw fellow community members working in their local grocery store, literally risking their life for $7.25 an hour. The only bright side of tragedy is that it has a way of bringing people together and cleaning the slate. Let’s continue to respect and fight for all workers. 

When you think about the welfare system, sadly many Americans think of a poor, lazy, likely obese, con artist who has figured out how to game the system and live off actual workers wages. While they aren’t poor, the biggest beneficiaries of welfare are certainly con artists(Walmart). Let’s go back to the working poor, we know that the minimum wage is so low that even working 40 hours a week will still not provide the basics of food and rent. Imagine having a family on that wage, on this low wage most workers have multiple jobs and still cannot provide enough for their children. Before children go hungry, these workers are forced to enroll for food stamps. 

Take a big pause here, do we like the idea that in America today you can absolutely bust ass and still need Government assistance to survive? 

This is where the Walton’s come in, remember the stories in the news about Walmart holding food drives for EMPLOYEES!? Yes they acknowledge that many of their workers do not have enough food to eat. However lets focus on how they are truly the recipients of the most welfare. By lobbying the government minimum wage companies can get the wages to stay inhumanely low, Walmart can stomach starving people because they know these workers won’t starve to death because they are forced onto the Government’s payroll. Imagine if food stamps didn’t exist, guaranteed we would hear the same stories we hear from China of people keeling over right on the job. Many Walmart workers would lose the roof over their heads. At the end of the day if you pay taxes, you are really paying Walmart’s payroll. If the national minimum wage was gradually raised to $15/hour, we would see the amount of workers seeking welfare drop significantly. 

At the end of the day based on capitalist values, it isn’t the employees but the Walton’s who cannot compete with their own hard work, they only succeed by changing the laws that the government has laid out. Wait a minute, using the laws and government to succeed, isn’t that socialism!? You got that right, socialism is here, you just don’t qualify.

The Velocity of Money

Debating the welfare and government system often escalates into a messy argument, winding back and forth until the original point is lost. In the vein of simplicity, simple concepts or in this case proven phenomenon can be helpful. First we will start with everything that we can think of that the Government is “giving away” or “redistributing”. At the bottom we have traditional welfare- food stamps, government housing, and recently the Trump COVID relief check. At the top we have subsidies for large corporations, oil and gas, Elon musk receiving billions from the American government, bailouts, and large tax cuts. Tax cuts aren’t redistribution but it is a financial burden lifted. 

While you are expecting or hoping for a comparison of the two totals, that is not the point. What do you think would boost the economy more- The redistribution at the top or the redistribution at the bottom? The short answer has to do with the velocity of money. If you gave $1200 to an impoverished worker who makes $25,000/year and gave a wealthy person who makes $2,000,000/year, hard data tells us that the worker will spend 100-110% of the benefit they are given. The wealthy person on the other hand will spend far less 0-30%. If we think about it, it makes sense, if you have urgent bills to pay and need groceries to survive, you will spend that money. If you have a solid retirement fund, large salary, and stock portfolio, that amount of money is insubstantial and you don’t literally(as in won’t starve) need it in the same sense. This isn’t a shame-on-you-rich-guy issue, it’s just reality. The worker will put the money right back into the economy while a wealthy person will save it, effectively taking it out of normal circulation. 

The implications of this are massive. This “law” of the system was one of FDR’s greatest tools. None of the New Deal programs were perfect, many were mismanaged or just overly optimistic leading to programs that went nowhere like Eleanors housing experiment in West Virginia, Arthurdale. However, even when these programs missed the mark, they weren’t putting money into the hand of the ultra wealthy, meaning even failed programs paid real workers. Let’s be clear, this is not some call for wasteful redistribution. This simply highlights the fact that America economically is at its best when the Government is by the People for The People and working in the majorities interest. 

This fact makes something like Medicare for all a simple question from a monetary point. We know that every dollar saved on healthcare by the masses will immediately enter the economy. This fact shows that welfare and food stamps literally cannot be ruining our economy. While we have data that tells us recipients aren’t committing fraud(have you ever applied for government assistance, it’s an insanely tough process), however even if every impoverished person was double-dipping it would have a positive effect on the economy and GDP. 

When will the Left wake up to seize control as the party of American economic values? I wouldn’t hold my breath, so long as they are taking the same money as the Republicans.