Below the poverty line, wages affect everyone.

The owner of a small restaurant in Minnesota recently added a 35¢ line item surcharge to his guest receipts, supposedly to make up for an increase in the state minimum wage law.

It was his way of making a political statement, that this increase is an added hardship for his business.

I for one am sick of companies that are allowed to pay employees less than a living wage on the pretense of keeping expenses low and saving customer’s money. It does not save me money when an employee of a company works full time and yet is under the poverty line requiring subsidized food assistance, subsidized health care, subsidized mass transit, etc… all of which add to my tax burden

The cost shifting of employee compensation from private to public entities is a practice that needs to be abolished.

The minimum wage started as part of the New Deal legislation with the goal of leveling the wage negotiations between a single employee and a large corporation. The goal of the program was to bring the minimum wage to a number near the poverty line. From 1938 to the 1960’s the minimum wage rose with inflation and the wages rose.

However in the late 60’s the real value of the minimum wage was allowed to fall resulting in a wage that reflects a 25% decline in real value today. That 25% that had to be made up somewhere else and that turned out to be social assistance.

There are many causes for the decline in workers wage value. The decline in union participation has eliminated much of the collective bargaining. The entry of Walmart (and stores like it) in almost every market has eliminated small entrepreneurs who had a stake in the community they lived in. (It is a lot harder to not pay someone a fair wage if you have to see them in church every week.) Third, corporations have moved many of the higher paying blue collar jobs overseas to capture cheap labor.

What needs to happen is a new social contract needs to evolve, allowing everyone who works in an industry to have the opportunity to make a living wage without the need for a subsidy. Private Industry and business should pay for the labors they require and shouldn’t be allowed to cost shift their moral responsibilities to the public sector.

This new social contract should include a linkage between the fiduciary responsibilities of a corporation to make a profit and the moral imperative of a corporation to treat human beings fairly.

3 thoughts on “Below the poverty line, wages affect everyone.

  1. Hello. “There will be poor, always” — (Jesus). Sad but true. The, ” to capture cheap labor” phrase is why this country is in trouble economically. America was built on cheap labor. No one ever tells the truth about that. This post was insightful.

    Thanks for your moderation.

  2. Amen, bro. The poverty line in my city is $17,000 a year. My income is $9,000 a year. If internet weren’t included in my room rent, I wouldn’t be here talking to you. And my poverty means I can’t buy the mutual funds and luxury cars and $2,000 tablet computers that get advertised on TV, so it hurts the rich in their pocketbooks as much as it does me.

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