If you’re looking for evidence that corporations call the shots more often than citizens in this country, look no further than last week’s news about Wal-Mart CEO H. Lee Scott.
“Our customers simply don’t have the money to buy basic necessities between paychecks,” Scott said in comments directed to Congress. Scott wanted Congress to raise our federal minimum wage of $5.15. Exactly how high he wanted it raised would be a story by itself. The mere fact that Wal-Mart called on Congress to raise the federal minimum wage supplies a lifetime of irony to anyone starved of sarcasm.
I remember well my first-ever job in the warehouse of an office-supply store on State Street. At the age of 12, I raked in a whopping $2 an hour helping assemble office desks, sorting screws and sweeping the front door. Every other Friday, paycheck cashed, I walked home with a wad of bills in my shoe for fear someone might rob my hard-earned wages. After three summers of work between school, I had enough for the purchase of a Radio Shack stereo, an electric bass and amplifier, and all the sports gum I could chew. My only regret is that I never saved that money in U.S. Treasury Bills for a down payment on a house. Ah, the luxury of spending money when you lived “at home.
Were my wages assembling desks, busing tables and prepping Mexican food “minimumâ€? Clueless teenager I was at the time, I honestly cannot remember. But everyone knows teenage workers are central figures in debates about raising the minimum wage. One study by Richard Burkhauser of Cornell University’s Department of Policy Analysis and Management revealed that teenage workers would be the largest group of beneficiaries'28 percent of all beneficiaries, in fact'if the wage were raised. Only 23 percent of all working-poor families would benefit. Shockingly, and most interestingly, Burkhauser’s 1999 study revealed that those who’d benefit most from a raise in the minimum wage are those with household incomes greater than $50,000.
Aside from the fact that more disposable dinero across all income levels helps most all retailers in work-and-spend America, no wonder Wal-Mart has suddenly taken an interest in the minimum wage. We knew all along there had to be something in it for them, right?
Interest rates will always get the spotlight when it comes to business and economic news. Who doesn’t care about the cost of money itself? The minimum wage, meanwhile, is far more interesting because it’s far more slippery. Those on the left never tire of reminding us that we haven’t seen the minimum wage increase in almost 10 years since its last big 90-cent bump in 1996. You’ll recall, however, that the late-’90s economy was so robust that not even most teenagers worked minimum-wage jobs. The real news regarding today’s minimum wage is that its purchasing value over time has been in steady decline. Contrasted against its all-time high in 1968, when $1.60 per hour got you $8.85 in today’s dollars, it’s estimated its real value has declined 29 percent between 1979 and 2003.
Few would argue against letting market forces run the show when times are good, as they were in the mid- to late-’90s'and mandating a federal wage is virtually another added tax on business. But who will demand wage increases in sour times when the market’s not moving, the gap between rich and poor is widening, and Congress cares more about protecting gun makers from lawsuits than the working poor?
Even Wal-Mart knows the answer now. Raise that wage too high, however, and a lot of working teenagers might spend too much money on music gear and sports gum.