The Minimum Wage Must Have Sufficient And Sustainable Purchasing Power

The following post, written by The Rev. Robert A. Franek, is a part of Politicus Policy Discussion, in which writers draw connections between real lives and public policy.

As the debate over the minimum wage continues, we must consider the purchasing power necessary to afford the basics of life. For too long the minimum wage has been allowed to stagnate and has quickly become a starvation wage. It is nothing less than a moral failing that in no state in this county is an average basic apartment affordable on a full-time minimum wage salary.

This is a travesty in the richest nation on earth that people who work full-time minimum wage jobs cannot even afford the basics of life starting with shelter. By the time one figures in food, clothes, supplies, transportation, phone/internet, and healthcare we’re in the negative range. This doesn’t even begin to consider costs for raising kids, travel, unexpected repairs, or any kind of savings (retirement, emergency fund, large purchase, etc.) or charitable giving.

Meanwhile CEO pay is skyrocketing while businesses say that they cannot afford larger wages for workers because it will hurt their bottom line and shareholder value. This logic is not only economically indefensible; it is morally repugnant. If there is money for bloated executive salaries it is clear the bottom line is not in danger. It also makes economic sense to increase wages for the lowest paid workers. Income at the top is mostly invested and does little to stimulate the economy. Minimum wage workers spend nearly every dime they earn on goods and services providing an immediate and regular investment in the economy that keeps businesses in operation and able to hire more workers to meet an increased demand. Giving the lowest paid workers sufficient and sustainable purchasing power is not only morally right, it is good for the overall economy.

For too long the minimum wage debate has centered around specific dollar amounts and the time interval to move from the current minimum to these higher alternatives. However, while I agree that the $15 minimum wage is a goal to push Congress to adopt, as a country we must consider the morally acceptable minimum amount of purchasing power a person who is employed full-time at minimum wage should have. This is to say what goods and services should a person be able to afford at this minimum level of income.

Relatedly, we must also then consider the threshold for various types of public assistance such as access to the Supplemental Nutrition and Assistance Program and Medicaid. Should a person working full-time at minimum wage need to rely on public assistance for a sufficient and sustainable livelihood? How does raising a child as a single parent or going to school enter into the determination of a sufficient and sustainable wage and the need for public assistance? We must also keep in mind that the lower wages are the greater the need for investment in public assistance will be. From housing to healthcare, the expenses must be covered. The critical question is how will they be paid for in the richest country on the planet. There is a direct tension between earned wages and government subsidies.   

In making these determinations, it is also important to remember that it is expensive to be financially poor. With little room for error in a tight monthly budget our fee saturated economy the counts on consumer mistakes, has the potential to eat away at a person’s limited funds.  The fees from an accidental bounced check or needing to use an out of network ATM consume money needed for food and gas. Any unplanned expense from a car repair to a doctor’s visit can bust a budget for months. Moreover, the inability to buy in bulk often times means per unit prices for staple goods are higher. Cheap foods are also often the least nutritious and can lead to expensive healthcare costs treating chronic conditions like heart disease and diabetes. Taxes also consume a significant portion of income for those on the lower end of the earnings spectrum.

Raising the minimum wage to a sufficient and sustainable threshold for earners to be able to have a sufficient and sustainable livelihood is a crucial and necessary action that is urgently needed to end the morally reprehensible practice of paying workers starvation wages that entraps them in an endless cycle of poverty.

Martin Luther in his explanation to the Fifth Commandment: You shall not murder writes:
We are to fear and love God, so that we neither endanger nor harm the lives of our neighbors, but instead help and support them in all of life’s needs.

And in his explanation to the Seventh Commandment: You shall not steal he says:
We are to fear and love God, so that we neither take our neighbor’s money or property nor acquire them by using shoddy merchandise or crooked deals, but instead help them to improve and protect their property and income.

It is not a stretch to see a minimum wage that meets the moral threshold for a sufficient and sustainable livelihood as a component of supporting our neighbor in all of life’s needs. Further, Luther makes it clear that it is imperative to help our neighbor improve and protect their income. Such protection necessarily includes seeing that no one especially those making a minimal income is the victim of predatory and unjust practices. Providing opportunities for increased earnings and fostering a culture of being financially savvy would go a long way to helping people improve and protect their property and income.

Our country must come together and demand that Congress make a moral choice in setting a minimum wage that offers the purchasing power for a sufficient and sustainable living. Few businesses will do this on their own. It is long past time to end the practice of paying people starvation wages in the richest country on the planet.

The harder question remains: What constitutes a sufficient and sustainable livelihood in the United States in 2017? Surely, it must begin with being able to afford a decent place to live.