JONATHAN DOWNARD photograph

No Silver Spoons Here:

Thoughts On Minimum Wage and American Accounting
by Jonathan Downard August 2006

At your service, sir/ma'am. I'm the guy who knows who you are and what you're ready to imbibe. I don't make judgements about your sex life, your angry wife, or your choice of professions. I bring your beer after your difficult day at work. I have jokes and anecdotes, I get the buffalo wings cooking, and I can make martinis you never knew existed. I listen to every line, story, blonde joke, and divorce lament. I help you answer the trivia questions correctly. I try to make you comfortable and eager to return. I compliment your personality in remarkably intuitive ways and always seem to know what you need to hear, advice or otherwise. I call you "sir" or "ma'am." I watch your back and do my best to see that you make it home safely. I run interference, defend your shortcomings, introduce you to your next hot phone number, and, occasionally, lie for you. I carry thousands of names, faces, recipes, bits of philosophy, trivial facts, vacation spots, current events, and sins of those around me in my head at all times. I can be your friend, your priest, your father, your enabler, and your crucified saviour, all in one.

And one or two times in ten, you try to shit all over my self esteem in attempts to make your own shriveled junk feel bigger to you. Every once in a while, you might treat me like some sort of lower-class slave. You get pissed because it's time for me to close or that I have a wife and home to go to. You might allow yourself the belief that you're the only person I have to worry about.

I'm your friendly neighborhood bartender.

I'm not so different from your waiter, or the guy at the newsstand, the front desk clerk, or the laundry lady. I'm really not much different from anyone. Or maybe I am... You see me only at work and never as the guy I really am. You sometimes ask about me, but we're really usually spending our time together talking about YOU. And that's O.K, most of the time, because that's my job. I know what I've gotten myself into. I do it because it's one of a few things I'm good at that can come close to paying my bills.

Things I'm good at:

* spelling

* poetry

* prose

* singing

* playing guitar

* marginally useless trivia

* criticizing government, etc.

* making tasty drinks

* listening and acting sympathetic

* reading people

* multi-tasking

See what I'm getting at? Did you catch something in the order in which I listed these skills? And the last half of these things come together behind a bar. I do this job, not because I like it, but because I'm good at it and had to drop out of college for financial reasons more than ten years ago.

The old phrase "do what you love" has failed me miserably. I don't have the time. Sure, I've got a novel, or three, swimming around in this cranium, but I've got bills to pay and a wife to think about. How shall I approach the mountain of research and planning and actual writing time when I can't even mow the yard on a regular schedule? I've written a small catalogue of songs that I love, but I don't have the money or time to promote. I have received numerous compliments on my "turn of phrase" and use of poetic license. But these things don't pay any bills. In fact, the skills I have come to know as my strongest take more of an investment to deliver a monetary compensation than I'm capable of at this stage of my life. I am jammed into a paradox: I need to spend a huge amount of time on my REAL goals, but I don't have the kind of time I need because my job/daily life sucks it all away.

For fuck's sake, it's all I can do to work a more than full week; maintenance my house, yard, and marriage; write the monthly contributions to Strangeroad.com; and eat, sleep, shit, and check the mail. Sometimes I can't even balance it all and still remember to check the oil in the car. I sometimes don't remember conversations I just got done having because my mind is so scattered with bills and student loan payments and all the stuff I mentioned in the first paragraph that I carry in my head. Every time I think I might be building a cushion, it deflates with the next random bit of terrorism fate unleashes upon my wallet.

I don't have any kids yet (but my son will be born next month), and already I can't seem to get ahead or even get any real time to relax. Does this all sound familiar to you?

But I should stop bitching, I suppose. I look around and see all of these other people in a hole deeper than mine, trying to raise kids and deal with major health problems, etc, on minimum wage jobs. I see single mothers and alimony/child support payments and disabilities. I see people that, perhaps, don't have the advantages that I might. I see people who have the same problems I have, plus the anguish of not having a good significant other or a stable home. Am I being selfish? Perhaps. But the purpose of this whole selfish little path I'm dragging you along is not really to complain about me. I want you to take a look at yourself, because I'm taking a look at me, too.

I make fairly decent tips as a barkeep. It's a good thing, too, because, for all that I do, the company I work for is only willing to pay the minimum hourly wage. It's fair to say that I probably make TWICE the minimum wage, by the end of the day, but I am still just skirting around the poverty line and struggling. If I'm having a tough time supporting my family with a bit more than double the lowest standard earning scale, I have to wonder how people get by. My boss's attitude is, "Work harder, make people happier, and you'll be responsible for your own raise." This means I can forget about them raising my hourly rate. And in many states, Ohio included, regular waitresses and servers are only paid $2.13 an hour! Most people haven't done the job, so they don't know what we're really talking about-- but let me assure you that the average clientele in many areas aren't generous enough to bring that $2.13 very far above minimum wage, if at all. And I can't always blame them. A gallon of gas today costs more than three-fifths of an hour of minimum wage labor, after taxes! Add a gallon of milk to that, and you're probably in the red. If you are an unskilled laborer working for minimum wage, about the best you can do, even with overtime hours, is go into debt. But look at the current and recently previous Republican economic policies that put the entire country in debt. They're trying to tell you that this is the American Way. But someone has to pay these debts eventually, whether it's the lender or the spender... often leading, ultimately, to bankruptcy.

I am not an economist, but I am rational and logical. I am 30, so I'm old enough to remember "Reagan-omics" and that it didn't work. So-called "trickle-down" policies have a main objective of pouring funds and massive tax breaks into big business and the top 5-10% of the wealthy in the country. The scheme suggested that by doing so, these people and entities could afford to pass more of the wealth on down the line, paying higher wages and spending more money in the community. The reason it doesn't work is simple: greed. The wealthy are quite content to keep the money and circulate it among themselves and their own communities. The fact that they are enjoying more income and benefits doesn't necessarily inspire them to share, or to lighten the burden on others. A short foray into history will illuminate this, specifically items concerning the industrial revolution, racketeering, the tobacco industry, and even specific families like the Rockefellers, the Rothschilds, the Borgias, or the Bushes. On one hand, I do applaud Bill Gates and others for their charity work, etc, but I don't see it as enough. Unless you have aspirations for world domination, a family doesn't need more than a few million dollars, if you get my drift. And the Bushes call themselves "Christians." Does anybody remember that Jesus told his followers to give away all of their worldly possessions except for a robe and some sandals? I wouldn't expect that from anyone, but you shouldn't use a name if it doesn't fit you.

The name "Grey Area" is meant to imply that I'm trying to view things objectively, from both sides... But that doesn't mean the outcome of my exploration has to be neutral. Sometimes it is, but my perception of things like American oppression of other societies or my views on censorship is certainly not unbiased. I'm not even affluent enough to spend time on my real dreams, so I cannot speak without a certain resentment of the, um, "excessively comfortable." Will I ever get to see Scotland? Will I ever build my studio or finish my novel? Will my family even make it? It remains to be seen. No one can be without bias-- and if you try to speak or write that way, you are being artificial. Bottom line-- It's my damn column, and I'll write it as I like. So, on to the minimum wage argument...

A minimum wage is a minimum level of payment established by law for work performed. Its purpose is to protect vulnerable low wage workers from exploitation. It is a time-based rate that supposedly applies to unskilled adults and teens in their earliest work experiences. A minimum wage is established by a law and legally enforceable. The main purpose of a minimum wage system is to prevent labor exploitation and poverty. This means the minimum wage should provide sufficient buying power to enable a worker to have a basic standard of living-- ABOVE the poverty line. The minimum wage should also motivate workers, enabling them to enjoy the benefits of economic growth and contribute to the economy.

The first established minimum wage in the United States came in 1933, when a $.25-per-hour standard was set as part of the National Industrial Recovery Act. In 1935's Schechter Poultry Corp. v. United States (295 U.S. 495), the United States Supreme Court declared the act unconstitutional, and the minimum wage was thrown out. The minimum wage was re-established in the United States in 1938 (Fair Labor Standards Act), once again at $.25 per hour ($3.22 in 2005 dollars). It had its highest purchasing value ever in 1968, when it was $1.60/hour (around $9.12 in 2005 dollars). The current federal minimum wage is $5.15 and has not been increased since 1997.

President Bill Clinton gave states the power to set their own minimum wages above the federal level. As of 2004, 12 states had done so; and on November 2nd of that year two additional states (Florida and Nevada) passed increases, statewide. Community organizing efforts were responsible for the Florida and Nevada increases. Some government entities, such as counties and cities, observe minimum wages that are higher than the state-set rate. Another movement to increase incomes, "living wage" ordinances, applies only to businesses that are under contract to the local government itself. Santa Fe, New Mexico, has a $9.50-per-hour minimum wage-- the highest in the nation-- and there are plans to increase this wage to $10.50 in 2008.

But on a national scale, over the last 25 years, minimum wage has not risen with inflation and the cost of living. In the 1980s, the minimum wage remained unchanged from January 1981 until April 1990-- a period of nine years and three months. In 1996 Congress passed legislation to raise the minimum wage from $4.25 to $5.15 an hour by 1997, and there it has stayed, despite staggering inflation. This December 1st it'll be nine years and three months since the last increase, and on December 2nd the federal minimum wage will have remained stagnant for the longest period since it was established. The minimum wage now equals only 31 percent of the average wage for private sector, nonsupervisory workers. This is the lowest share since the end of World War II. Since September 1997, the purchasing power of the minimum wage has deteriorated by over 20 percent. After adjusting for inflation, the value of the minimum wage is at its lowest level since 1955. The percentage of workers receiving health care benefits from employers has dropped almost 5% since 2000, and the percentage of people receiving health insurance from the government rose to 27.2 percent, from 24.7 percent, in the same time frame. Health care costs are higher than ever, and prescription drug prices have been increasing at more than double the rate of inflation. Gasoline, in terms of adjusted dollars, is the costliest it's been since 1980, and may be rising above that peak as we speak. Since 1997, the price of bread has risen 25%, basic health insurance 97%, and the price of regular gasoline has risen 136%. So, with all these prices inflating, why doesn't the price of labor inflate somewhat accordingly? Big business has influenced Congress in such a way that it will not back a raise in minimum wage that's supported by over 80% of the U.S. population, according to polls.

The arguments against raising the minimum wage are more numerous than I thought possible:

* Employers should only have to pay wages that they feel are necessary to keep the staff they need, based on supply and demand.

* Employers can't afford higher wages, so they're forced to lay off workers, outsource overseas, or hire illegal immigrants. This would destroy or reduce jobs that "have a value less than minimum wage," resulting in higher unemployment and underemployment. Unions have forced up their wages, and more than ever, their jobs are being done by non-Americans.

* I have heard some fairly convincing arguments about how raising minimum wage actually takes jobs and money away from the lowest paid workers and redistributes them to slightly higher skilled, higher paid workers. By this reasoning, an employer would rather pay one moderately skilled worker a higher rate to do the same work that two or three unskilled minimum wage laborers would do. So expectations and stress rise in the workplace, which ultimately would lead to more health problems and higher insurance premiums, in turn leading to less purchasing power for the wages being paid.

* Economic growth would be curbed and inflation would rise due to a decrease in affordable labor.

* Decreases opportunities for training in skills needed to move up later. McDonald's claims that many successful people have worked their first jobs there, supposedly gaining important skills.

* Increases cost of government social programs assisting laid-off workers.

* Encourages young people to drop out of school, as higher low-skill wages make working full-time more attractive.

* Encourages more illegal immigrants to enter the country, especially from Mexico, as the pay differential between the U.S. and poorer countries rises.

Arguments for raising the minimum wage:

* Helps the poorer and needier citizens pay their bills and have a better quality of life.

* Reduces labor exploitation and unfair compensation (wage slavery).

* Forces employers to pay at least the wage society thinks human labor is worth, rather than low-balling potential first time employees with insufficient salary offers. First time employees don't really know how much they're worth and have little bargaining power because if they try to negotiate for a higher wage, the employer can just find another person who will work for less.

* Stimulates consumption, and thus economic growth, by putting more money in the hands of poor people who would spend their entire paychecks.

* Stimulates economic growth by discouraging labor-intensive industry, which would encourage more investment in capital and training.

* Encourages many who would take low-wage jobs to stay in or return to school and work toward higher skilled, higher paid professions.

* Very low wage-rates have the effect of reducing the work ethic among those at the bottom echelons of society.

* May actually increase employment due to economic growth, stronger sales, and greater incentive of individuals to get off of welfare programs and reenter the workforce.

* Increases tax revenue due to taxation of higher incomes and sales tax paid on increased sales of goods.

A possible solution to the problem often mentioned is that of tax breaks. The idea is that by giving tax breaks to the poorer income brackets, you can actually appease the poverty problem without forcing industry and employers to absorb the cost through wage increases. Unfortunately, this has been unsuccessful in practice. I don't want to go into specifics here, but almost every set of "breaks" passed over the last 30 years has been sold as a helping hand to the poor or the middle class. Do your own research, and you will find that most of the real tax breaks are going to big business and the top 5-20% of incomes in the country. In classic, ineffective, "trickle down" style, the idea is to give massive tax breaks to big business and the wealthy in the "hope" that it will cause industry to flourish, thus creating jobs and raises for all of us little people. It's not working any better than it did during the Reagan years. George W. Bush's tenure as President is actually the first to see an overall decrease of jobs and employment since the Great Depression. Also, due to the decrease of revenue resulting from reducing the tax responsibility of the largest sources of income in the country, a defecit is created. Welfare, Medicaid, and other social programs benefitting the poor, the elderly, and education have been cut-- taking benefits from the mouths of babes. We've been watching our Congress and our President giving free money away to those who are already very comfortable and taking it right away from students, the poor, the elderly, the orphaned, and the disabled.

"How can a person of conscience say to the congress, we do not support an increase in the minimum wage? Instead we'll give $800 billion to the wealthiest people in America. The minimum wage is $5.15 an hour. It hasn't been raised in nine years. This is a shame. It is a disgrace. It is unfair."

--Nancy Pelosi, House Democratic Leader

The majority of evidence compiled over the last 50 years has shown that increasing minimum wage has had little or no effect on unemployment and underemployment. Before 1997, minimum wage increase opponents predicted that inflation would rise, small businesses would suffer and the unemployment rate would spike upward. Actually, unemployment went down a half a percent after the raise.

I challenge anyone to explain to me, in layman's terms, how raising minimum wage would actually hurt the American worker. The misconception that minimum wage jobs are held only by youths, retired elderly, and those who desire secondary income is refuted by the very existence of a large number of people that I work with and see everyday, including myself. Several of my co-workers are single mothers attempting to keep their households afloat. Many people here in southern Ohio work minimum wage jobs, and sometimes more than one, in order to support their spouses and children. Many of those same people have been seriously further impoverished by the welfare cuts caused by the "tax breaks."

With inflation, which I'll oversimplify as the elevation of prices on goods and services, should come greater revenue for businesses. With greater revenue should come greater labor value, higher wages, and subsequently more consumption. With more consumption, profits and revenue should increase, and so on. The only reason I can see for denial of a minimum wage elevation is deflation.

I also don't understand the lack of regulation on international outsourcing of labor. If this kind of economic suicide were more strictly regulated, along with either tighter border control and/or easier and more efficient immigrant naturalization, then American labor value would increase. If we weren't willing to practically give labor away to illegal immigrants and locations overseas, the money would stay right here in the U.S.A. If the tax breaks were actually going to the bottom 50% of earners, rather than the top 5-20%, the American populace could have more money to spend on itself, which, ironically, should result in greater earnings for the wealthy and big industry anyway.

I'm no economist. But simple logic seems to be the best, and here's how I see things:

The lowest legal wage in this country should rise and fall with inflation/deflation and the actual cost of living. Labor and production of American goods should be done by Americans, even if it takes creating more Americans. Prescription drugs, healthcare, gasoline, and other goods should be regulated and held at the same inflation rate as everything else-- since I've seen no good explanation for their price hikes. I've seen no evidence of actual shortages of any of the aforementioned, regardless of what's happening in the Middle East and elsewhere. The price of a barrel of oil is set by OPEC, not by actual supply and demand. Advertising of prescription medications should be abolished so that doctors can prescribe drugs and treatments according to need and their consciences, rather than consumer suggestion and corporate kickbacks. Congressmen and public servants should have the same social security and retirement plans as the rest of us, while being prohibited from raising their own salaries beyond the same rate of inflation that would dictate minimum wage. A flat rate tax for all citizens' incomes, based on the cost of living and minimum wage, applied to all corporations and entities, would seem to be the best way to level the playing field for all Americans. Higher tariffs, duties, and taxes on imported goods, especially nonessential non-food items, could generate more public revenue while discouraging spending of American dollars outside the U.S. The withdrawal of American armed forces from foreign lands and the discontinued interference in foreign conflicts and overseas politics would bring about a decrease in military spending, freeing funds for more useful and less destructive uses like education and social programs. It would also ease tensions with the rest of the world and positively affect international relations. Legal bribery, and by that I mean lobbying, should be outlawed to prevent big business from influencing legislators away from accurately representing the will of their constituents and protecting the rights and welfare of actual American citizens.

And, for fuck's sake, when the President commits perjury or is found to be misrepresenting the truth (whether about a blowjob or weapons of mass destruction or motivations for military action), impeach him. We have always had the right to recall our elected officials, so it should be used more often. If all our officials were elected by popular vote, rather than an electoral college or priveledge of appointment, perhaps recall and impeachment wouldn't be needed as often, anyway.

It would probably better serve us, in this age of light speed communications, to create an actual democracy, where all elections and legislation are decided by a popular vote. Let's put Congress out of a job. They're screwing us to get rich, and we really don't need them, anyway. We're being sold down the river by wealthy lobbyists, large corporations, and overpaid politicians. It's just about time to take back our freedom and control of ourselves. It's time to pay ourselves what we deserve for our labor, yet with restraint. Everyone should be able to get fed, educated, and have a stake in the nation's future. Continuing to shit on poor families and the children of the U.S. will only lead to revolution. Communism, socialism, and capitalism have never actually worked, in practice, to protect equality and civil rights. Why not overthrow our oppressors and give true democracy a try... so we could truly blame only ourselves if we should fail.

The commentary in this article is in part speculation and opinion based on my understanding of my own research, and should not be construed as concrete fact. I have drawn largely on the sources indicated earlier, and I have paraphrased and reprinted parts of my previous article entitled "Selective Scriptural Support."

You can write to me at mark10_18@yahoo.com for a free copy of the United States Constitution. You can also tell me there what kind of American you think I am.

Copyright 2006, Jonathan Downard

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