The Price of Compassion, Part II

One of the ways the Washington Post works an issue is to frame a topic in terms of individual lives. A good example is the story in the Sunday September 13th Business section entitled “The Power of One More Dollar.”

The story amounts to a campaign piece on behalf of the $15/hr. minimum wage told through the life of a Guatamalan couple living in a basement apartment in Washington, D.C. The woman is trying to save $7,000 in order to send for her thirteen year old daughter so she can get an education in the U.S.––a noble ambition for sure. Laying out the families economics, the reporter––Lydia DePillis––explains how each dollar more per hour that Dalia Catalan earns means an extra $160/month that can be saved toward that end.

The Catalan family example, however, punctures a hole in one of the cornerstone agruments on behalf of the $15/hr. minimum––the notion that the current minimum, which in D.C. is $10.50/hour, is not enough to support a family because it shows that the typical minimum wage earner does not have to support her family on her or his salary alone. In the Catalan’s case, there are two wage earners plus they share the cost of their apartment with a second couple.

But the huge missing piece of information DePillis left out of this article is whether the Catalan’s are in the U.S legally or not. Since that question is never addressed, one must assume they are here illegally and their two-year-old son is their “anchor baby”––the means by which they hope to gain legal standing to remain in the U.S.
The Post’s story supports my contention that the $15/hour minimum will have a negative impact on economic opportunity for low income American citizens. The author interviews one employer who states that higher minimum wages hinder his ability “to take on the really hard to hire.” In other words, the higher the minimum wage, the harder it will be those who need jobs the most, primarily young minority men, to find them.

One person quoted in the story blames employers for cutting hours in the face of higher minimums. That attitude speaks to my assertion that most people, including most journalists, have little understanding of small business economics. They assume all business owners are rich and that they could increase wages if they weren’t so greedy. That’s a convenient ideological cubbyhole in which to place the blame, but let’s look at the facts.

First, we’re not talking about $1 more per hour to reach $15/hour, but in D.C. $4.50 more per hour or $180 more per week in gross salary. Add in taxes and mandatory benefits, including Obamacare, and we’re looking at $15,000 or more per employee annually over their current pay. That kind of increased cost for just a handful of employees would wipe out the entire profit for many business owners, which is why many will have to lay off empoyees or cut their hours.

No one should blame the Catalans for the choices they’ve made. Dalia says they’re better off here than they were at home. Plus, are unemployed American citizens going to clean hotelrooms like she does? But as a society we’re still making it too attractive for people to come here illegally, disadvantaging citizens as well as those who are applying to come here through the legal immigration process.

How long can we do what feels good without examining the real costs? Is it fair to help those who are getting the raises at the expense of others––namely, those who will be laid off or have their hours reduced and those who can’t find a job?

We also should examine the motives of those who advocate the $15/hour minimum. Who benefits the most? Certainly the politicians who can pretend they’ve done something good without telling the public the full story. Certainly union bosses who can use the $15/hour to leverage raises for their members. Maybe DePillis will tell a union boss’s story next week. How do their family budgets work out on their union salaries? And what about the religious Left––they too benefit because advocating a minimum wage increase is a cheap way to feel good about oneself since it doesn’t require addressing the more difficult problems facing our society.

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