Warren Rule: Minimum Wage Earner Should Be Able to Afford Spouse, Child and Mortgage
Terry Jeffrey |Posted: May 01, 2019 10:01 AM
Sen. Elizabeth Warren told a story at the She the People Presidential Forum last week, illustrating the tough life she lived before growing up to become a Harvard Law professor and then a senator.
"My daddy has a heart attack. Everybody thinks he is going to die," she said. "He comes back home. He can't work."
"My mother has never worked outside the home," she continues. "We lose our family station wagon. My mother is terrified."
But that did not stop her from getting a job.
"She put on her high heels. She walked to the Sears, and she got a minimum wage job answering the phones," said Warren. "The minimum wage job saved our home, and it saved our family."
Inspired by her mother's experience, Warren wants a minimum wage job to pay the expenses for a family of three.
The vision of government behind this, she explains, derives from three lessons she learned when her mother had to go to work.
The first two lessons Warren cited made her sound as if she might be promoting hard work and self-sufficiency. They included "it doesn't make any difference how scary it looks" and "you take care of the people you love."
But her final lesson was this: "the third thing I learned eventually about that story is it's a story about government and how, no matter how hard you work, the rules that are made by the people in government will still make the big difference in your life."
She did not say this as an admonition against big government but as an endorsement of it.
"Because when I was a girl, a full-time minimum wage job in America would support a family of three," she said.
"It would pay a mortgage. It would cover the utilities, and it would cover food," she said.
"Today, a minimum wage job in America will not keep a momma and a baby out of poverty," Warren concluded. "That is wrong."
Today, the federal minimum wage is $7.25. The Bureau of Labor Statistics published a report in March explaining who earns it.
There were 81,915,000 people 16 and older in the United States in 2018 who worked for an hourly wage, according to BLS. And 1,711,000 -- or 2.1 percent -- were paid at or below the minimum wage.
Why would somebody be paid below the minimum? "(A) 'tipped employee' -- a worker who 'customarily and regularly receives $30 a month in tips' -- may have his or her cash wage from an employer reduced to $2.13 per hour, as long as the combination of tips and cash wage from the employer equals the federal minimum wage," explains the Congressional Research Service.
Of the 1,711,000 workers paid the minimum wage or less, only 905,000 were 25 and older.
In other words, only 905,000 -- or 1.1 percent -- of the nation's 81,915,000 hourly wage earners were both 25 or older and earning the minimum wage or less. The other 98.9 percent were paid more than minimum wage or younger than 25.
And, according to the BLS, the workers making at or below the minimum wage were disproportionately concentrated in one industry.
"The industry with the highest percentage of workers earning hourly wages at or below the federal minimum wage was leisure and hospitality (11 percent)," said the BLS report. "About three-fifths of all workers paid at or below the federal minimum wage were employed in this industry, almost entirely in restaurants and other food services."
Specifically, according to Table 5 in the report, of the 1,711,000 workers paid at or below the minimum wage, 1,049,000 -- or 61.3 percent -- worked in the leisure and hospitality industry.
"For many of these workers," the BLS said, "tips may supplement the hourly wages received."
Should the federal government force a restaurant to pay a college-aged kid working 40 hours a week enough to support a spouse, a child and mortgage? If you follow Warren's logic, the answer is yes.
Warren is right that America has a wage problem in some industries, but she is looking in the wrong place for a solution.
As far back as 2005, the Social Security Administration Office of the Inspector General published a report on "Social Security Number Misuse in the Service, Restaurant, and Agricultural Industries."
"(W)e believe SSN misuse in the service, restaurant, and agriculture industries is widespread," said the IG.
Why?
"We identified various types of reporting irregularities, such as invalid, unassigned and duplicate SSNs belonging to young children and deceased individuals," said the IG.
"Employers and industry association representatives acknowledged that unauthorized noncitizens contribute to SSN misuse," said the IG.
"We use the term 'unauthorized noncitizens,'" the IG explained, "when referring to individuals who do not have permission from DHS to work in the United States but who are working -- regardless of whether they entered the country legally or illegally."
If Warren wants to see wages rise among people working in the industry most likely to pay the minimum wage or less, she should demand that the government secure the border and enforce the immigration laws.
Terry Jeffrey |Posted: May 01, 2019 10:01 AM
Sen. Elizabeth Warren told a story at the She the People Presidential Forum last week, illustrating the tough life she lived before growing up to become a Harvard Law professor and then a senator.
"My daddy has a heart attack. Everybody thinks he is going to die," she said. "He comes back home. He can't work."
"My mother has never worked outside the home," she continues. "We lose our family station wagon. My mother is terrified."
But that did not stop her from getting a job.
"She put on her high heels. She walked to the Sears, and she got a minimum wage job answering the phones," said Warren. "The minimum wage job saved our home, and it saved our family."
Inspired by her mother's experience, Warren wants a minimum wage job to pay the expenses for a family of three.
The vision of government behind this, she explains, derives from three lessons she learned when her mother had to go to work.
The first two lessons Warren cited made her sound as if she might be promoting hard work and self-sufficiency. They included "it doesn't make any difference how scary it looks" and "you take care of the people you love."
But her final lesson was this: "the third thing I learned eventually about that story is it's a story about government and how, no matter how hard you work, the rules that are made by the people in government will still make the big difference in your life."
She did not say this as an admonition against big government but as an endorsement of it.
"Because when I was a girl, a full-time minimum wage job in America would support a family of three," she said.
"It would pay a mortgage. It would cover the utilities, and it would cover food," she said.
"Today, a minimum wage job in America will not keep a momma and a baby out of poverty," Warren concluded. "That is wrong."
Today, the federal minimum wage is $7.25. The Bureau of Labor Statistics published a report in March explaining who earns it.
There were 81,915,000 people 16 and older in the United States in 2018 who worked for an hourly wage, according to BLS. And 1,711,000 -- or 2.1 percent -- were paid at or below the minimum wage.
Why would somebody be paid below the minimum? "(A) 'tipped employee' -- a worker who 'customarily and regularly receives $30 a month in tips' -- may have his or her cash wage from an employer reduced to $2.13 per hour, as long as the combination of tips and cash wage from the employer equals the federal minimum wage," explains the Congressional Research Service.
Of the 1,711,000 workers paid the minimum wage or less, only 905,000 were 25 and older.
In other words, only 905,000 -- or 1.1 percent -- of the nation's 81,915,000 hourly wage earners were both 25 or older and earning the minimum wage or less. The other 98.9 percent were paid more than minimum wage or younger than 25.
And, according to the BLS, the workers making at or below the minimum wage were disproportionately concentrated in one industry.
"The industry with the highest percentage of workers earning hourly wages at or below the federal minimum wage was leisure and hospitality (11 percent)," said the BLS report. "About three-fifths of all workers paid at or below the federal minimum wage were employed in this industry, almost entirely in restaurants and other food services."
Specifically, according to Table 5 in the report, of the 1,711,000 workers paid at or below the minimum wage, 1,049,000 -- or 61.3 percent -- worked in the leisure and hospitality industry.
"For many of these workers," the BLS said, "tips may supplement the hourly wages received."
Should the federal government force a restaurant to pay a college-aged kid working 40 hours a week enough to support a spouse, a child and mortgage? If you follow Warren's logic, the answer is yes.
Warren is right that America has a wage problem in some industries, but she is looking in the wrong place for a solution.
As far back as 2005, the Social Security Administration Office of the Inspector General published a report on "Social Security Number Misuse in the Service, Restaurant, and Agricultural Industries."
"(W)e believe SSN misuse in the service, restaurant, and agriculture industries is widespread," said the IG.
Why?
"We identified various types of reporting irregularities, such as invalid, unassigned and duplicate SSNs belonging to young children and deceased individuals," said the IG.
"Employers and industry association representatives acknowledged that unauthorized noncitizens contribute to SSN misuse," said the IG.
"We use the term 'unauthorized noncitizens,'" the IG explained, "when referring to individuals who do not have permission from DHS to work in the United States but who are working -- regardless of whether they entered the country legally or illegally."
If Warren wants to see wages rise among people working in the industry most likely to pay the minimum wage or less, she should demand that the government secure the border and enforce the immigration laws.
Assuming 40 hours a week, that's about $2,286 per year for a female retail clerk. That's about $20,038 in today's dollars. Even bumping for the then real disparity in male versus female wages, that still falls short of supporting 2 adults and one child AND paying a 1959 mortgage (not counting VA benefits) such mortgage being roughly $50 - $60 bucks a month.
Of course, nobody worth employing stays at minimum wage for long (nor did they then aside from teen jobs).
Interestingly, Warren's mother did not have shoulder this burden alone. Warren's father continued to work although at a lower wage (at least initially after his heart attack) and we have no idea of what her mother made after 6 months, whether she worked full-time, or what her father made after two years post heart attack. That would be good information to know.
The fact that Warren started waiting tables at 13 certainly doesn't impress me since that's when I started paycheck work. I assume her older brothers (like mine) also went to work at the same age.
There is something wrong with anybody who can't get a raise or a better job after a few months on minimum wage. It's the no skill/low skill pay rate. If you haven't picked up some skills in that time, that's you - not them.
Supporting a child and one non-working spouse on the lowest wage has never been realistic. It wasn't realistic in 1880 and young men didn't attempt it. Marriage for most men wasn't something they pursued until they had enough experience and skills to ply a trade that would stretch to supporting a family. If a boy apprenticed at 12, that day might come for him at 19 or 20 in the city, it might come at 17 for a kid sharecropping.
Whether 1880 or 1959 no working class breadwinner expected to pay for a house with separate bedrooms for each child, multiple toilets, two or more vehicles (or pleasure horses), vacations (other than staying at a family member's slightly different farm/small town), old age retirement, college, medical insurance other than hospitalization in the late 1950s, or much else.
You can't equate a 1959 lifestyle for the average working class person with 21st century expectations.
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