In January, San Francisco will officially be the first U.S. city to have a minimum wage of above $10, nearly $3 more than the federal minimum wage of $7.25. And San Francisco is not the only place where workers will see a little extra pay in 2012 due to a minimum wage increase, helping them weather tough economic times.
It would actually take a minimum wage of about $9.92 today to match the buying power of the minimum wage in 1968. But according to Sen. Ron Johnson (R-WI), the Tea Party favorite, this doesn’t matter because only bad workers get stuck making minimum wage, whereas everyone else quickly makes more because of the magic of the market:
JOHNSON: Bottom line: when you’re a good worker you don’t stay at minimum wage for long. Trust me on that. It’s not universal. It’s not universal, but trust me as an employer, as an employer I certainly didn’t want to lose good employees. And so you actually have a better marketplace. And so if your employer is not paying you good wages and you’re a good worker, you go look for other places. Now that’s hard to do, that’s hard to do when we have such high levels of unemployment. But, again, I would get back to we don’t have a very attractive place for business investment.
But it’s simply not true that only bad workers wind up making minimum wage for substantial amounts of time. In fact, a study by economists William Carrington and Bruce Fallick found that a “nontrivial” group of already disadvantaged workers spends large amounts of time making minimum wage:
[W]e identify a nontrivial fraction of workers that spend substantial portions of their post-school career on minimum or near minimum wage jobs. For example, we estimate that more than 8 percent of workers spend at least 50 percent of their first 10 post-school years working in jobs paying less than the minimum wage plus $1.00. We find that workers with such minimum wage careers are largely drawn from demographic groups with generally low wages: women, minorities, and the less-educated.
These workers hail from populations that already face the short end of the stick when it comes to employment, and their time making minimum wage is no indication of their work ethic. Research by Center for American Progress chief economist Heather Boushey has confirmed this data, finding “that over a third of prime-age adults (aged 25-64) in minimum wage jobs remained in them three years later.”
Even during tough economic times, increasing the minimum wage can play a key role in making life better for many workers (without, as conservatives always claim, causing job loss). But Johnson and other conservatives would rather demonize those workers doing the best they can in a system that prevents many workers from ever moving up. (HT: The Uptake)