While Americans are divided on many issues, the idea of making the poor slightly less poor is a rare point of bipartisan consensus. From ultra-liberal San Francisco to deep-red Arkansas, lawmakers and voters have boosted state and local minimum wages in twenty states—through legislation, automatic adjustments or ballot measures—enabling local governments to jump ahead of the stagnant federal minimum wage. Yet this eminently popular measure still draws ideological detractors, who are now busy trying to whittle down the meagerest wages in their states in the name of “fairness.”
The death-by-a-thousand cuts approach recently took the form of a proposal by Representative Jim Bolin of South Dakota to roll back the newly raised minimum wage of $8.50 an hour, automatically adjusted for inflation. Bolin sought to excise the inflation provision to allow the wage to also decrease in case of deflation. The logic is that whether the economy prospers or declines, the wage floor should be a “two-way street.” So, if the economy spirals downward, it’s only fair that the poorest workers see their incomes shrink proportionally: why shouldn’t their boat sink at the same rate as everyone else’s?
Beyond the odd notion that economic fairness is promoted by deregulating basic standards of human decency, Bolin’s proposal suggests an insidious premise: that social protections should be chained to the volatility of the market economy. The idea of marketizing the minimum wage actually contradicts its purpose: the minimum is a floor you can’t fall below, not a ceiling that could collapse on you. Though state minimum-wage rates are too low to bring many people above poverty, they at least safeguard workers against exploitation in a competitive job market. The alternative is to allow a race to the bottom—a devastating pattern that has driven the ferocious wealth gap between richer and poorer nations in laissez-faire global manufacturing industries.
David Cooper of the Economic Policy Institute tells The Nation via e-mail, “Given that our economy is driven by consumer spending, the last thing we would want during a period of economic turmoil is more folks with less money to spend.“ And, he noted, “a larger moral/philosophical question that should be considered as well: should the lowest paid worker never have any change in their standard of living?… Imagine we had a revolution in production processes such that prices of staple goods fell considerably, should we legislate that the lowest-paid workers shouldn’t get to benefit from those improvements?”
Although lawmakers complain that minimum wage hikes hurt mom-and-pop shops, a far deeper pain is inflicted by tax laws and regulatory loopholes that ensure CEOs continue to prosper whether the economy does well or poorly. Perhaps a more equitable “two-way street” would be a wage law that automatically caps massive CEO salaries during recessions.