On the Minimum Wage

Here in California, a State of the United States, the State Legislature voted to increase the minimum wage from $10 to $15 by 2021, a whopping 50% increase over five years.

Obviously, not everybody would be happy with this change.

I talked to a coworker of mine, her name being kept anonymous for obvious reasons, and we discussed the increase in the minimum wage today. Working at a coffee shop that serves Starbucks drinks, our prices across the board were hiked up, some increases being as much as 10%.

For coffee drinkers, it would seem insignificant to pay 20 extra cents for a cup of the stuff, but for my coworker, as she put it, that 20 cents could mean everything.

She said she didn’t like the idea of raising the minimum wage because prices and inflation would rise to combat the effects of it: this is simply the way the market works. While I am calm and understanding about it, she was dismayed and annoyed that the cost of living and priceĀ for things will increase.

After plenty of thought into her argument, I can understand her concerns about the cost of living, but I also understand that ultimately, she is perhaps in the wrong mindset about the wage increase.

In the first place, the cost of living even before the minimum wage hike is already ghastly: myself being a college student and having worked since my second year of high school some four years ago, my wages and my work effort have never quite been on the same level (if you catch my drift).

I often worked forty hours a week for $8 an hour, and it was only a while after that $9 and then $10 came around. And still, my credit cards, rent, food, transportation, tuition, and medical and car expenses far outweigh anything I have ever made from working. I even had two part-time jobs in high school just to have some money in my pocket to ease the burden on my parents.

I retorted to her that the cost of living and prices could increase without market fluctuations from a minimum wage, and she responded that this is better than the market being distorted by government action.

It was here that I became quite disappointed in her lack of compassion for the action: government officials, elected to represent the People of California, raised the minimum wage in a hope to put a little more money into the pockets of people who work minimum-wage jobs to help better their lives. And although yes, the cost of living and prices can increase some, I find this an acceptable price to pay for roads, police forces, soldiers, healthcare subsidies, government regulations, and, perhaps into the future, universal college tuition and public-sector health insurance and healthcare.

I will admit that there is even more irony in her lack of appreciation: she is a Latina, just as I am, and her in particular an advocate and social justice warrior for Latins everywhere. She tells me of her recent trip to Nicaragua, the second-poorest country in the Western Hemisphere after Haiti.

Under Daniel Ortega and the Sandinistas, Nicaragua’s economy is in shambles, the army and police corrupt, and the people destitute, impoverished, malnourished, and lacking basic necessities like clean water, food, and electricity.

And yet she comes back to California, the 7th-largest economy on the planet and the most populous state of the United States with some 37 million people, and complains that the minimum wage increases her standard of living.

Nicaragua’s minimum wage is $1.45 an hour, adjusted for PPP.

She also fails to understand time horizons: while we in the present day might bear some additional costs or pay a few extra cents here and there, I hope that the next generation of students and Californians, those who will come after me this year and the next and the year after that, will be able to work diligently and perhaps struggle just a tad-bit less than what I, and many individuals, have had to bear.

Government policy and money is not just about us, but about the future of those who will come after.