What is a living wage?

 

What is a living wage? This week’s film, Waging a Living, really inspired me to think about the range in quality of life across society. Watching this film was heartbreaking. It can be easy to focus on your personal situation rather than think about the working poor struggling to pull themselves up by their boot straps in a system pushing them back down. In this film, we follow four different people and their families while they work overtime attempting to make ends meet. Many of these families simply wanted to provide shelter, food, and the basic necessities. If they splurged to have a Christmas dinner, presents, or pay for a doctor’s visit and medicine, they would fall into even greater depths of debt or even end up homeless and unable to afford even the necessities.

According to the film, the federal minimum wage has remained at $5.15 per hour since 1997. However, since then it has risen slightly. In North Carolina, the minimum wage is $7.25 an hour. I don’t think the point of the film is to tell us that the minimum wage needs to be raised or even that we need universal health care. Rather, the film is a glimpse into the reality of working class citizens living on low wages and without health care. For one single woman with two children who recently went through a divorce, her reality involves  having approximately $15,000 worth of credit card debt and a daily struggle to make ends meet. Another woman lives in fear of raises and promotions because when she does she loses federal aid, such as food stamps and Medicaid. To her, this seems like she is hustling backwards. Many working class citizens are stuck in this vicious cycle. They feel trapped. However, does that mean we should raise the minimum wage?

If I simply answered that question based upon the fact that so many families are struggling to get by on a minimum wage today, I would say yes. No one wants others to suffer and live in fear of an inability to support themselves or their family. However, there are consequences to raising the minimum wage and, honestly, I am not sure if raising the minimum wage will be the most effective solution. Though I am not an economist, I think it is safe to say that if the minimum wage rises based on a federal mandate, prices for goods will increase. With a federal mandate to raise a wage, companies will be less willing to internalize these costs of production. As a result, instead of taking the monetary equivalent of the percent increase in wages out of the company’s profits, they will increase the price of their products or services. Consequently, people will be unable to afford these products. In a sense, this is not completely negative because some of these products could have a high elasticity. Elasticity is a measurement of how the change in one economic variable could affect the others. So, in the context of raising the price of a good or service, if a product is elastic then its demand can fluctuate, meaning that if the price is too high, it could be deemed unnecessary to buy that particular product. However, when a product is inelastic, they its demand will not sway much, if at all, when other factors, such as price, are changed. So what does this mean? Basically, if prices are raised, this can cause those, even with higher wages, to remain stuck in their working class social status unable to escape the vicious cycle because of an inability to afford even the basics and get out of their rut. With a higher wage, it is plausible that qualifications could rise, increasing the difficulty of those without experience or an education to break into the job market. Another thing we also have to remember that a minimum wage was never meant to support an entire family. As the film shows, it is extremely difficult, if not impossible to support a family on a minimum wage, especially if a health issue or something of that sort arises. The focus needs to be shifted away from an increase in minimum wage if we want to make a difference in the lives of people struggling to get by. That is not to say that increases in minimum wage should not happen. Regardless, we need to look at the larger picture, such as income for these families and change our government programs to accommodate them better.

I don’t think that people should stay on the federal aid system. Part of the American dream is to better yourself and achieve your goals. However, if you remain on the system, that seems like simply settling. The system is designed to help you get by, not help you achieve your life goals. Furthermore, minimum wage should be a starting point, not a dictator of your future. I think this film was empowering in the sense that it truly brings light to a poorly run system that is not effective in helping people support themselves. People who are of poor, working class social status are not all lazy and content just barely getting by with slight assistance from federal aid. So, restructuring our government system would be the first step in creating effective assistance for those struggling. 

Consolidated State Minimum Wage Update Table (Effective Date: 01/01/2012)

> Federal MW	Equals Federal MW of $7.25	< Federal MW	No MW Required
AK - 7.75	DE	AR - 6.25	AL
AZ - 7.65	HI	GA - 5.15	LA
CA - 8.00	IA	MN - 6.15	MS
CO - 7.64	ID	WY - 5.15	SC
CT - 8.25	IN		TN
DC - 8.25	KS
FL - 7.67	KY	4 States
IL - 8.25	MD		5 States
MA - 8.00	MO
ME - 7.50	NE
MI - 7.40	NH
MT - 7.65	NJ
NV - 8.25	NY
NM - 7.50	NC
OH - 7.70	ND
OR - 8.80	OK
RI - 7.40	PA
VT - 8.46	SD
WA - 9.04	TX
	UT
18 States + DC	VA
	WV
	WI
	23 states