Conservative Pulse

All indicators seem to show that the economy is doing terribly, and isn’t expected to get better anytime soon.  Unemployment is well above 7% from 2008.  This year looks even dimmer, and the percentage of Americans out of work may well spiral towards the double digits by the end of 2009 as things get even more bleak.  High unemployment has many bad effects - crime, family disruption, loss of productivity, and so on.  The problem tends to feed on itself, as high demand for jobs makes it difficult for most people without one to get re-employed.  Employment wages are a huge part of what drives the economy, and without it we don’t have much to stay afloat on.

The group hit hardest by these conditions, and the people most likely to spend money in the economy, are workers in low-wage jobs that are directly affected by state and federal minimum wage laws.  These are usually unskilled or low-skill positions that experience high turnover and require little training.  The current federal minimum wage is $6.55 per hour.  Many states have laws that set higher levels.  California, Connecticut, Vermont and Oregon specify minimum pay that is at or over $8.00 per hour for non-tipped employees.

Most businesses have recently been forced to cut back, including those that hire low-wage workers.  Often, the choice may be between continuing to pay one or two workers, and remaining profitable.  Invariably, workers get cut - grunt work is inconvenient but can be performed by others who are happy just to keep their jobs.  As an example, two helpers working for a roofing contractor may have the job of setting up ladders, picking up old shingles and moving materials up to the worksite.  The contractor is charging lower rates to get more business in a tough economy, and is unable to pay as many workers.  Being unable to pay the helpers less than $6.55 per hour, they lay them off and just make everyone else work harder.  With less jobs to be had and less money per job, the helpers simply aren’t providing $6.55 worth of benefit per hour.

Maybe the workers would be worth $4 per hour to their employer.  Or maybe $3 per hour, or $5 an hour - whatever it is that keeps the business viable on the balance sheet.  Opponents will no doubt find fault with this by saying that such a low wage can’t possibly provide for a dignified existence or that it amounts to “slave wages”.  Realistically though, a business that fails can’t hire anyone, and $4 an hour is better than $0 per hour, or having someone draw unemployment.  Low wages, at least, keep people working while the economy is tight, and continues to provide them with an income.  It allows businesses to continue to function with more of their original labor force.

This may work, or it may not - but we couldn’t possibly do any worse right now, and it deserves to be put to a test.  Check out the Let People Work Facebook group and follow us on Twitter!