Last week, I wrote about unemployment benefits and my hope that Congress votes to reinstate some extension of federal assistance that supplements the state average of 26 weeks of jobless payments.
There are arguments about how long is too long — regarding 50 or 73 or even 99 weeks of benefits — but I think that the preponderance of the evidence shows that longer federal assistance pays for itself in many ways. Not least of which is the fact that unemployed workers are required to keep looking for a job in order to qualify for the benefits.
The subject of today’s column — establishing a wise minimum wage level — again embodies the same sort of competing economic analyses as are involved in sorting out the best duration for unemployment payments.
The arguments for raising the federal minimum wage (state minimums vary) are obvious. Currently set at $7.25 an hour, which is about $15,000 a year, the wage is woefully inadequate to live on. Many 40-hour-a-week, minimum-wage workers are forced to seek all kinds of government assistance. And many of them will work two — or even three — jobs, totaling 80 hours per week, in an effort to make a living.
Furthermore, as the nature of the economy has changed over the past 40 years, with globalization moving many industrial jobs to developing countries, a greater and greater percentage of the jobs left in America are low-paying retail and service jobs. That has meant that increasingly those jobs are filled by primary breadwinners who are relying on them to help support a household.
That trend has only accelerated since the Wall Street meltdown. Roughly half the jobs lost since 2008 paid between $38,000 and $68,000 a year. But 70 percent of the jobs added during the same period were at or near the minimum wage. So, the remunerative value of work itself is shrinking.