By Tall Angry Scotsman
The 2016 Presidential election had many variables, but certainly a large part of why Donald Trump won a majority of the electoral votes was his economic message. It is a non-partisan and undisputed fact that wages have remained low even as more jobs became available following the recession at the end of the last decade. Instead of focusing on how to best solve this problem, politicians have anchored themselves in opposing positions. For the sake of optimism, let’s imagine for a moment a scenario in which a compromise could be reached and what that might look like.
The first step in any mediation is to find out the starting position of the parties. Democrats, most notably lead by Bernie Sanders, are calling for an increase in the federal minimum wage. The amount varies depending upon which Democrat you listen to, but the prevailing amount is typically between $12 and $15. They are also advocating for more stability in terms of scheduling consistency and distribution of hours. Republicans argue against a raise in minimum wages because they claim it incentivizes companies to automate their workforce faster, cut down on hiring, and pass on the cost of increased wages to consumers. They are also advocating for stronger immigration laws, which Republicans argue will lead to a smaller supply of labor and thus an increased bargaining position for American workers. Lastly, many Republicans link minimum wage jobs to low skilled and/or teenage workers that do not truly rely on the income as living wages or the job as a career path.
Next, we need to acknowledge that barring some type of outside influence or force, companies themselves are not going to automatically improve the lives of their employees out of a sense of gratitude or morality. Companies are organized around the principle of maximizing profits. Although studies have shown better paid employees increase profits above the cost of the corresponding wage increases, not enough companies follow this logic. As citizens of a democracy, we have not only a financial stake in the way our tax dollars are spent, but also the way our culture is shaped by those elected to set standards of living. One of those standards is that America is a land of opportunity; those that work hard should be able to build better lives for themselves. A job and the paycheck derived from it should equal a freedom from poverty.
So how do we tie in both a need for a wage floor and the concerns that doing so puts those very jobs themselves at risk? By being reasonable in terms of demands and focusing on the end result of helping people. For example, a $15 minimum wage makes sense in New York City or San Francisco where the cost of living is atrociously high. But in Mississippi or Arkansas that same $15 has the buying power of $20.39. Instead of getting hung up on a dollar amount, figure out a base number that is a percentage of inflationary index in different geographical areas. The burden on employers is commensurate with the area in which they do business and the effect on prices would be absorbed accordingly.
As long as we are varying rates by location, let’s be even more subjective and apply the minimum wage to only those businesses that can bear the increased costs. Small businesses can be defined by size of gross income, number of employees, and net profits within their respective industry and exempted after qualifications are verified. Penalties can be added for companies that automate or outsource more than a certain percentage of their work force, or for those that hire “under the table” or immigrant employees not authorized to work in the United States. Even on an individual employee level, employees under the age of eighteen can be exempted in exchange for being granted work permits.
The point here is that Congress should be focused on solving problems by crafting solutions that meet the concerns of both sides, even if those are the same concerns as your party believes in. Without some type of compromise, the legislature will continue to grind to a halt and no one will get any help at all.