August 29, 2013

by Steve Levy

Across the nation, fast food workers are organizing, protesting, and even striking for an increase in salary to something reflecting more of a living wage. This is one fiscal hawk who says it is conservatives, above all others, who should be cheering it on.

The standard mantra for a conservative economist is to oppose hikes in the minimum wage on the theory that the additional expense borne by businesses will lead to fewer people employed in the marketplace. This, the theory goes, would wind up doing more harm than good to those on the lower economic stratum.

While there certainly is a point where increased wages will tip the scales for an employer, thereby resulting in lower overall employment, the small amount of increase that is being proposed for a living wage is not going to significantly impact many businesses to that extent. On the other hand, a more decent wage for hardworking manual laborers will hit the sweet spot for most centrists and conservatives, i.e., providing incentive to work.

A recent study in Pennsylvania showed that a person on public assistance can accumulate the equivalent of over $57,000.00 a year by staying home and taking advantage of all the different handouts from the government. These include Food Stamps, Medicaid and Section 8 Housing, to name a few.

The Cato Institute issued a study this past month, using what appears to be a somewhat different formula, confirming that for those who have become government dependent in numerous other states, it is indeed more profitable to reject minimum wage jobs and just stay home on the Dole. A person declining work in Washington D.C. could make the equivalent of $43,000 from government subsidies. In Massachusetts it is $42,000, while Hawaii comes in at $49,000. Consequently, there are millions of Americans pondering the question as to why they would go to work for 40 hours a week at minimum wage and bring home a total of $15,000.00 before taxes. Do the math. It simply doesn’t add up.

Now in the old days, most Americans would say that they would do whatever they could to avoid Social Services because of a sense of self-pride. But the stigma attached to dependency has been dissipating at a rapid rate. Indeed, the Administration is expending taxpayer dollars to promote films and PSAs to convince folks that they should aggressively seek out food stamps and any other government subsidy they can get their hands on.

One way or the other, those on the lower end are going to get enough money to survive. The question is whether it will come from money they earned or money that is subsidized by the taxpayer. Isn’t it preferable to put a working person over the poverty threshold by adding a few cents to a Big Mac rather than having the taxpayers make up the difference when the salary falls short.

Working for minimum wage gets you about sixty bucks for the day. Now, subtract the gas money it took to get there and the day care costs if you are a working mom, and you are basically working for peanuts. Where is the incentive? It is not as though all these workers are seventeen year olds, holding these positions for a year or two. (Even at that, the money they save for college would pay for merely a text book or two.) So many of these workers are unskilled, mature men and women who are just trying to scrape by.

We have it all backwards. A recent FOX segment interviewed a California surfer dude who bragged before the camera about how he thought it foolish to get a job when he could hit the waves all day and then rock out with the hot babes at dusk, all while filling his belly on sushi paid for by his food stamp card. He all but said you’d have to be a sucker to work for minimum wage. We’ve given credence to this imbecile’s words by encouraging such abhorrent behavior through our increasingly unchecked welfare state.

Still, there are millions of Americans who refuse this easy way out, because, despite the governments efforts to de-stigmatize reliance on the state, they have a sense of pride and self respect. (That isn’t to say that those legitimately down on their luck and requiring government help don’t have such pride.) It’s time to throw the surfer bum to the curb and allow hardworking minimum wage employees know that they can make more than the poverty level if they are willing to work a forty hour week.

Steve Levy is President of Common Sense Strategies, a political and business consulting firm. He served as Suffolk County Executive 2004-2011, and as a NYS Assemblyman