Putting aside the degrading and entirely predictable post-election impersonation of a diapered Hugo Chavez by our dimly departed acting president, there was a fabulous result among the constitutional amendments Floridians approved on Tuesday. The state will become the eighth to go for a $15-an-hour minimum wage. It will go up to $10 by next September, then by a dollar a year until 2026. Calling it a minimum wage is a misnomer. It’s to be a living wage, a right as overdue as universal health care and freedom from want.
Of course this is Florida, where the state legislature has never known a constitutional amendment it couldn’t eviscerate. Look at what lawmakers did to Amendment 4 two years ago, Jim Crowing felons out of their right to vote all over again. They’ll put the same infernal machinery to work against Amendment 2, starting with the bogus claim that this isn’t the time, not when the economy is struggling. So let’s just bring out the Gradgrinds to tell the poor to stay poor a little longer, as if there was ever a day in recorded history when profitmongers thought there was a right time to raise the minimum wage–as if the connection between a higher minimum wage and employment has ever been more predictive than conjured.
There is a connection. But it’s vague and intractable, driven a good deal more by fake–or let’s say more kindly, opportunistic–economics than facts, as centuries of assumptions show us.
Theorists have found all sorts of ways to keep employers from paying workers fair wages. The British economist David Ricardo more than two centuries ago had an iron law of wages: any wage increase to one worker would cheat another of income. He was wrong. An economy is not a fixed pie, but grows when workers can spend more. The economist Thomas Malthus years later thought raising wages would actually make people poorer, because it would encourage families to make more babies. The more people you had, the less food there was to go around. He was wrong. The more you paid a worker, the fewer babies were had. But for the decades of the Industrial Revolution Ricardo and Malthus gave employers cover to treat their workers like animals.
In 1912 Massachusetts enacted the first minimum wage law in the country. Six years later 11 more states and the District of Columbia had one, at least until the Supreme Court struck them down in 1923. The court said a minimum wage interfered with the freedom of contract, as if workers and employers were on an equal footing. The absence of a minimum wage didn’t stop the country from crashing into a Depression at the end of a decade of inequalities unparalleled until our own day. It wasn’t until 1937 that the court reversed.
Cyclical depressions and inequality were the norm between the Civil War and 1929. Minimum wages and unions, among other victories for labor, ended that, helping to stabilize the economy since and play a role in the great equalizing decades between the end of World War II and 1980, when prosperity rose like never before and inequality fell like never before.
It didn’t last. The turnaround back to 1920s economics–what the first George Bush called voodoo economics in a lucid, pre-Reagan surrender–can be dated roughly to 1981, though even Jimmy Carter had begun to pre-emptively adopt wage-busting and union-busting strategies: the playbook to crush the air traffic controllers’ union, the American labor movement’s Waterloo, was developed by the Carter administration and merely implemented by Reagan, as Rick Perlstein reveals in Reaganland, his new book. The reaction against fair wages got so absurd that even The New York Times editorialized against any minimum wage in January 1987 because it would “price working poor people out of the job market.”
The David Ricardos and Thomas Malthus of old by then had names like Milton Friedman, fill-in-the-blank chamber of commerce presidents and McDonald’s, whose Ray Kroc lobbied Congress and the Nixon administration in 1972 to let him pay his teen workers less than the $1.60 minimum wage even as he shoveled illegal contributions to the crooked president to sweeten the ask. (Contrast that with the In-N-Out Burger chain, which starts its employees at a minimum of $13 an hour and pays its store managers six-figure salaries. Pound for pound, it’s been a more successful company than McDonald’s.)
The new iron law of wages is that if you raise the minimum wage, you lose jobs. It’s not entirely wrong. You lose some jobs, especially on the margins of the economy, jobs that aren’t stable to begin with. But you never hear the other end of it. When you raise the minimum wage, you lift people out of poverty and improve living standards in far greater proportions than you lose jobs. There’s a stronger argument that you add jobs in the not-so long run, because more purchasing power means more economic activity. That was the principle behind Henry Ford’s $5-a-day wage ($130 a day in today’s dollars) that his business colleagues thought madness at the time. (The draconian strings Ford attached to that wage and the sleaze of his anti-Semitism are a different story.)
Forget assumptions. Forget fear-mongering PR releases chambered in baseless claims as outdated as Ricardo’s Whigs. We have lots of studies and numbers to go by. New York City’s $15-an-hour minimum wage was enacted in 2018. It did nothing to dampen employment. Until covid hit, jobs grew. Restaurants thrived. They hired more. They made more money. There’s been no such things as $20 Big Macs. Since 2016, a dozen states or more have enacted laws to raise the wage either to $12 or to $15, and again, until covid, none of it was affecting employment. But the number of people in poverty was falling. Same story across the country.
The biggest wage growth between 2018 and 2019 took place in states with higher minimum wage increases, which was to be expected. But the job market improved equally in those states as it did in states without higher wages, which contradicts the tired howl about higher wages costing jobs.
The Congressional Budget Office’s latest analysis of a national $15-an-hour wage projects that employment might fall by about 1.3 million, initially anyway. But the CBO also projects that 27 million workers would see higher wages, improving their standard of living, and 1.3 million people would certainly be lifted out of poverty. Chambers of commerce only tell you about the imaginary job losses. They don’t tell you the certainty that 20 times more people would benefit than those losing work. It seems to me that in any economic calculation, when the cost-benefit ratio is 20-to-1 in the positive, it’s pretty much case closed.
The voters have it right. They’re not buying the voodoo. But industry lobbyists know they don’t owe voters anything, lawmakers even less so. The rioting and looting of the amendment I’m worried about is from chicken-little businesses and their lackeys in the Legislature. The clucking starts now.
Pierre Tristam is FlaglerLive’s editor. Reach him by email here. A version of this piece airs on WNZF Friday.
The winds of change are blowing and this is a start. No doubt there will be pressure to demonize this but it passed. Its time to being in the Calvary for the little guy IMO American people deserve betterNice job with the Article
I am not hear to Educate or change your minds. Dont really care It passed. DEAL WITH IT. But on a present value of money concept alone out 6 years for pricing to adjust slowly none of your arguments make Fiscal sense. After reading these comments should have raised it to 20$ And like the Fiscal Stimulus pumped into the Markets over the last 12 Years sending Asset prices and Real Eastate among others to the moon doesn’t have more effect on Inflation Bet me whatever. Stop living in the past with antiquated ideals
It’s a proven fact that short term inflation occurs to steal away any tax rebates or tax stimulus. What makes anyone think increasing rents are going to drop because the minimum wage was increased to $ 15/hour. $ 15/hour may be more than the average prevailing $ 12/hour wage with a $ 7-8/hour minimum wage. Wal-Mart starts new employees at $ 10.50/hour. Tell the corporations they’re paying more, inflation is the response to get that back. Take unaffordable healthcare for example, whether it’s called ACA, Obamacare/Trumpcare/Bidencare or whatever else. The threshold for the maximum income the Government will assist with any subsidy grew from $ 46K/year at the beginning to right at $ 50K/year gross income. It’s no coincidence that $ 50K/year is that limiting income. They know at $ 50K/year that any individual will require a subsidy to be able to pay for the premium(s) for themselves & family. Tell someone what they’re making and inflation will steal that away every time. There’s really no shame & sense of fair play in any of that. Add that with this new found wealth, people will blow that. The substance abuse addict will buy more drugs, marketing will lure others to buy products they can’t really afford for the complete life cycle of any given product. People may be able to afford a down payment on something, but the first recessionary reboot and they’ll lose the ground they made and the money & products goes back into the economy and the used market. See when they announce a higher wage, the individual only has that on paper, they still have to earn that level of income, hour by hour, and that’s a function of time. It doesn’t change anything about what wealth never was compensated for. And then the game becomes one of cutting hours, cutting staff to provide services. Everything that has ever happened, then there’s a net gain in corporate profits with self service. Look at the self checkout lines at any retailer. 5+ registers that used to require 5 cashiers, now has 2-3 overseers. You bag your own. See the issues with increasing costs to employers ? And Biden’s plan, wage increase, that will increase inflation, profits will increase, so will bonuses to execs. So tell me who really wins with a $15/hour minimum wage. Standards of living won’t be any better and the free market economy will absorb that wealth. Anyone that ever complained about paying 35-39% income taxes on a dollar is just flat out cheap & greedy. What if I told you that I’d pay you 60 cent s for every dollar that you were paid and you didn’t have to do any more than you already do.
Great well researched article.
If past is an indication the “well informed” conservative will attack you.
Don’t let them get to you.
The Voice Of Reason says
Speaking as someone who knows nothing about running a business, I would assume a business in a category would remain on a level playing field with the competition. Everyone would pass on higher costs to consumer. Or not. Worker attitude and work ethic should improve. Employee retention would be better resulting in training cost savings. Workers would have more money to spend in the local economy. Less people living on various gov’t subsidies. Sounds like a winner to me.
Dennis C Rathsam says
Super dooper wonderfull…. So if you get 2 full time jobs,@ 15.00 bucks each. That might be able U to afford rent in Palm Coast. But everything in general will cost more, Frenchy, or less people will be employed. Some one (us the tax payers ) have to make up the difference. Now that folks are making 15.oo…What about the poor seniors collecting SS? What about them????? Wheres thier raise? Yeah sure it will take some time to get there but, in all reality this is just another way how the government will control our lives, and instead of creating good jobs, so we are less dependent on them … But thats not in the master plan. Adios America!
Pierre Tristam says
Odd how I never heard any of that when dividend payouts broke records last year. Where do you think that money comes out of? Neverland? Uranus? Or companies’ balance sheets? And who pays for it? Uncle Soros or every consumer you’re referring to? I suppose redistributing a trillion upwards is ok—and look, no inflation, no complaints about passing costs to consumers and seniors!—but redistributing millions downward is a world-ending catastrophe. Actually with fabrications like Ratham’s—foxie—we are in Neverland.
Palm Coaster says
A 16 year old who is going to High School and is just looking for spending money does not need to make 15.00 an hour. This is going to hurt the young more than anything!
It’s just a hair less than what starting police officers make in Holly Hill.
Mike Cocchiola says
It seems to be a conservative rule of law that paying people a barely living wage will cost jobs. Or that seniors will suffer. Or that small businesses will fold. I think the answer is maybe a few in all cases. But people will adjust, businesses will adjust and the economy will prosper. Simple economics. More pay, more spending, more sales and more profits. So, what’s the real problem here? Conservative beliefs as opposed to data-driven economics.
Minimum wage was never designed for a person to support a family , let alone themselves. It is a starting point for the young and a ending point for those who choose to work in later life. I do agree the wage can be adjusted for inflation in a given year, however starting an unskilled workforce @ higher wages is a recipe for disaster. When you look at the self checkouts that have starting taking over the retail stores it shows where those jobs are heading.
Please keep in mind that no matter what legislation is passed business owners will ( and should) always protect the
bottom line. One should never be satisfied in life with minimum wage and should strive to improve their situation.
If I chose I too could work for minimum wage just like when I was 15 and starting out . I choose to work hard and earn as much as I can to support my family .
Satified or not I will say those dangerous words” Its different this time”. You cant build a house or and Econmoy without a foundation or base. This would be a small part of that along with targeted Stimulus tax breaks etc, This is going to take 5 years or more IMO to ramp back up
R. S. says
In Denmark, Fast Food workers have been reported to make $20.00 an hour and have healthcare and paid vacations.
The Voice Of Reason says
I frankly think good old American greed plays the largest role. Capitalism is the best system but greed is the cancer of capitalism. Business owners paying peanuts expect undying loyalty and devotion while paying not 1 red cent more than they have to. Most of them can’t blow their nose without some republican tax cut.
Everyone a Millionaire says
I have a better plan. STOP all this “nickel & dime ” crap. Why bother paying any wage to workers ? Tell Creepy Joe to give a stimulus check of $1,000,000 to ever citizen in America. There you go, all is well, and we saved the taxpayer 19 trillion dollars for 15 years. It will work out just fine. The citizens will spend the money on a house, car, and business. Plus have money to save for retirement or invest. Trickling out little lumps of cash to the hard working Americans over a 6 year period is ridiculous .
Mr. Deeds says
Those who opposed the minimum wage change all share the same plantation boss mentality. With this change people will have more money to spend on essentials and this will boost the economy.
Mary Fusco says
Personally, I don’t care about the $15 an hour. The fact is that you cannot live on $15 an hour. You cannot pay rent or a mortgage, plus insurance, plus utilities, plus food, plus clothing, plus child care, plus the almighty $1,000 cell phone. Historically, minimum wage jobs were geared toward kids in school (other than management) and seniors looking to subsidize their income. Minimum wage is not meant to raise a family on. My kids all worked minimum wage jobs while they were in school. BUT, they lived at home. Maybe it would more productive if parents encouraged their kids to look into jobs that paid livable salaries instead of living with their heads stuck in phones and then looking for a miracle to live and pay bills. Just a thought.
Palm Coast 07 says
Ever wonder why big business does not complain about the $15 minimum wage. The answer is simple: Automation. The $15 will sooner or later cost jobs. Last year well in upstate NY, stopped at a franchise restaurant that was packed with maybe 50 customers but only had 3 employees. Two cooks and a cashier. All food was ordered at the automated menu station and you got a receipt and a number. When cashier called your number and you paid and got your order. In NJ while at a Chick-fil-A, you had a choice either stand in line to order or use the automated system to order and pay and then walk up and pick up your order. Those who keep their job will be happy but more will loose their jobs and corporate’s profits will rise
James M. Mejuto says
Isn’t that wonderful? Workers now have to work until Sept. of 2021 to gain a miserable buck and a half to their
paychecks and all this with no medical or other benefits deserving of an honest day’s work. When Sept. comes around,
they’ll still be behind the eight-ball when their paychecks don’t cover the purchase of everyday items steeped deeply
in inflation. Then, they’ll have to work a few more years to finally reach $15 an hour when then, they will also find
themselves behind in our all-American game called inflation. There seems to be no end in a Capitalist gov’t. where
only the wealthy are secure.
As someone that owns a business with over 40 horribly employees, I have no problems upping the wage for my employees, BUT!, the price of providing services is going to go up as well. An increase in wage means an increase in operating cost as “money just doesn’t grow on trees” and the US govt is not going to give the me difference in wage increases for my employees. So sure its great, but taxes , increase in operating cost of a business is going to wipe out any increase these employees see in a pay check and their living budgets. Nothing is free in this country, someone pays and that’s the customers.
James M. Mejuto says
re: capt: This is too much ! ! ! What do you mean, “40 horribly employees?”
Your email message is entirely incomprehensible.
If it weren’t for your workers you would not make a profit. They are the lifeline
of your business and without them, you wouldn’t exist.
My hope is that he meant to type horribly PAID employees?
Every dollar in pay increase costs businesses approx. $1.10 due to matching taxes and unemployment expenses.
Every business impacted by the increase will try to mitigate its effect by reducing costs or increasing prices.
Running a business is simple math, you need to match costs/expenses on one side with income on the other or you lose money and go out of business.
Being realistic,inreasing the minimum wage to $15/hr will only hurt.The companies paying these wages are not going to absorb the increase.It will simply be passed on to the consumer,as well as cutting back employees for cheaper,more reliable electronic services(Im sure everybody’s noticed the kiosks in certain fast food places and the ever increasing self checkout)and the trend will quickly increase.Furthermore think hard about the ripple effects.The cashier is now earning almost as much as manager.What about every other skilled worker that WAS making 15/hr?They will now make $20?Entry level SKILLED trades started at 15/hr.Will they now start at $20?As this trend continues what do you think will happen to rents/etc as the landlords costs of upkeep will increase as well?People really don’t see this?Or do they believe that the minimum wage employers will really absorb these increased wages from their profits??The minimum wage earner will remain in the same EXACT position-it will just increase everything for everybody else.I worked at a fast food joint when I was kid for minimum wage I think was about 4.95/hr.Even as kid that was not good enough for me and I quickly learned to move on and right passed that.Best bet is to educate yourself and move past the minimum wage threshold as it was never designed to employ adults trying to support growing families.It was designed for exactly how I used it-a job as a kid to learn work ethics and responsibilities-then quickly realize this isn’t nearly enough and move on quickly.
The Short term Inflation is dwarfed by the Inflation that will be caused down the road by the continuous QE Stimulus and mounting Natl. Debt which is approaching a crisis level and its not far away. Debt to GDP is nearing 150% and the idea is to Inflate the Debt away. Print print print. THATS the problem. NOT a living wage over 5,6 years SMH
James M. Mejuto says
Re: Realist says: Well, we’re not talking about “kids” working at a fast food joint! We’re talking
about real life, here.
Pay your workers what they deserve and nothing less. If you can’t do that, then
you’re in the wrong business.
These jobs were NOT DESIGNED for “real life”!!!!You can only charge so much for a burger!!They were actually designed for kids coming into workforce and for seniors to supplement income!!Get passed the end goal in life to be making minimum wages!!!No,it will never work to support 6 kids and pay a mortgage,save for college and retirement!NEWSBREAK!!!Donuts are now $45 per dozen to supplement a 35 yr old with 2 kids wanting to make 32/hr now!!:)
Dear wage earners. The working class is not your enemy.
This guy over here says
This is what will happen…in the short term, businesses might cut a few jobs here and there to keep their profit margins with the rise in personnel costs. In the long term, however, those jobs won’t be lost. What will happen is inflation. The same thing that has happened every time the minimum wage is increased. It’s why gas doesn’t cost $0.89 anymore and a gallon of milk is $4. Over time, everything will cost more which will negate the rise in wages. The only way to be sure that the minimum wage will be “fair” for workers is to tie it to inflation. But it will never happen. The minimum wage will increase to $15 by 2026 and then inflation will take place and our kids will be having this same argument again in 15-20 years when a gallon of milk costs $10 and the average income is $120,000 but the guy at McDonald’s is only making $15 an hour. It’s all relative.
Inflation has been benign and may continue for awhile this way due to over capacity in just about everything in past Decade or so.Durables etc. C19 hit the reset button. At some point Inflation will come home to roost but It is still a Supply/demand World and rates are at Historic lows due to the fear of Disinflatoin or God Forbid Deflationary Forces first IMO. The FRB cannot let off on the pedal. QE forever conceptually but in reality will it unwind on itself. Watch the Dollar, FedPolicy, rates ,Credit spreads etc.. Now is not the time to be Fiscally responsiblewithin reason. A steonger base at the bottom threshold of the Economy coykd help. Remember a Consumer driven Economic Base.
Concerned Citizen says
While we are raising the wages of workers in the fast food industry and other places lets also not forget.
To raise the wages of our Enlisted service personnel, Cops and Fire fighters. I know people in the higher risk jobs who are working 2 and sometimes 3 jobs to keep their families fed. And before you come after me about their choice of profession yes I realize they chose it. And no I don’t hold them different than anyone else. But if we are raising wages for mimimum wage jobs let’s be fair about it.
I know from first hand experience that life as a young enlisted person or public safety professional isn’t easy at all. And a lot of these men and women going into Law Enforcement or Fire Rescue have educational expenses looming over their heads when they start working. Let’s make their careers a little less stressful by paying fair wages.
Many things will be affected. Consequences abound. What happen to a free market driven economy? Let’s control every aspect of your live, what you make, what you pay, your health care, what you wear, and especially what you think and say. I wonder if Pierre pays a “living wage” or forks over his “fair share”? HWill Pierre’s business be able to grow when he starts paying $15 bucks and hour? Will he be able to hire more full time employees as it grows. Will people pay to read his stuff when it costs $20 a month? You can’t cover everything with $15 bucks an hour. Let the market set the local wage.
Free Mkt. no offense but that went the way of the Tech. Bubble, 2008 Paulsen/Bernanke bailout, now C19. IMO IFF The FRB ever pulled the plug it would be 1929 and then some. Central Banks of the World pretty much control things and a train wreck will come due to their Policies.
I have no issue with a $15 wage for a job that deserves it. But flipping burgers, bagging groceries, or being a greater at Walmart are not included in that. While I commend those who do those jobs, they jobs are not meant to take care of a family (ie what you call a living wage). Making a law that blankets all jobs regardless of what they are to be paid a certain wage is ridiculous. Get ready for more self check outs and kiosks and the implementation of efficiency to eliminate these types of jobs completely. The market will decide when it is cheaper to automate / eliminate than pay someone $15 an hour. It is also funny Pierre for you to use the words “fear mongering”. Those words coming from you, one of the kings of fear mongering, makes me laugh
Interestingly, no one mentioned the increases in tax revenue if/when higher wages are paid. 10% of nothing is nothing. 10% of something more equals more something; like tax revenue.
Hey, it’s now time to pay back your broke Uncle Sam for paying you for your vote . . .
this doesnt bother me at all people need money to live. I dont know how people live on what they make now ,I made more than $15 an hour in 1984 and just kept getting more year after year after year . Any way Pierre , even though you and I dont see eye to eye on many things ,I had fun bantering with you and some of the posters on this forum ,the wife and I are getting to live out our life long dream and moving over near cedar key , basically off the grid,no internet etc,we have met a couple of times and your a good guy ,a little different then me ,that makes the world go round
James M. Mejuto says
Re: Mary & the $15 min.wage. Are you or are you not concerned with this issue that this economic system has everyone embroiled in the facts of life.
Things have got to change in this society, that material goods are supreme. A family on a low budget simply cannot afford
several $1000.00 phones while food and rent are skyrocketing out of control.
Everything seems to be up and down, black is white, etc. People have got to get more out of life than just a weekly visit
to the fast-food joint.
Things have got to change from the bottom- up. We can no longer depend on our employer to provide an avenue to a more
James M. Mejuto says
Re: PTristam: $15 per hour . . . $15 per hour is not a livable wage but it’s step forward.
people who want to keep their jobs.
I really hope that the FL legislature pays attention, THIS time, to the will of the voters who overwhelmingly passed the amendment to raise this state’s minimum wage eventually to $15 an hour. I am hopeful, but it is not lost on me how many other times in recent years the legislature has turned their backs and ignored the voters who passed other amendments only to have the legislature proceed with underhanded and deceitful ways to prevent what the voters passed from being enacted into law. I remember how they tried putting so many stumbling blocks into place in order to stop the required environmental lands purchases after that was passed. They tried to do everything in their power to prevent the passed medical marijuana amendment, and they finally threw in the towel after realizing even they could no longer prevent what the voters passed from becoming law. They jumped up and down screaming about the felon voting amendment, and are still trying to figure out their next move in preventing felons who have served their prison sentences from ever regaining the right to vote, again despite the will of the voters. What really opened my eyes was the amendment that was put on this ballot, trying to get FL voters to fall for the idiotic amendment that would have required voters to pass in 2 consecutive elections any amendment before it would be enacted. It was a weak attempt to thwart the will of the people’s ability to take advantage of the amendment process, and thankfully, enough voters saw through that and it did not pass. It may show up again on a future ballot, because the Republicans in the legislature want nothing more than to rob our right to enact change through the election process because they have their own interests in mind, not the interests of the voters or the public good. With the $15 minimum wage amendment, I hope I am wrong, this time, but if history is any guide, we need to be vigilant because trusting our legislature to do the right thing is like turning your back on a wild animal… you have no way of knowing you will not be blind-sided if you let down your guard. Voters, we need to remain awake and vigilant for our own good.
This was brilliant. If there is one thing I’m sure of, the largest employers like fast food restaurants and walmart will definitely take this cost of business increase out of their profit margins. They definitely won’t cut workers or raise prices to compensate for increased labor costs. And we taxpayers won’t have to worry about the fact the public service employees (like police, fire fighters, teachers and emts) will have to have their salaries go up. Skilled positions that require additional schooling or increased responsibility will happily accept that unskilled workers are compensated at roughly the same rate as them. Or even if we do decide to compensate those public workers more. It will definitely be offset by the increase in new home owners that will definitely come out of the unskilled workers purchasing homes and paying property taxes.
James M. Mejuto says
It’s long overdo corporations do their responsibility. This is why the loss of workers’ unions to much
of the labor movement is a critical loss.
Workers, no matter where they are throughout this world deserve a fair day’s pay for a fair day’s work.