Current business model is race to bottom on wages

The city of Longmont is considering a raise of the minimum wage, and a Sept. 1 article in the Times-Call, “Small businesses feel squeeze of rising rate,” raises the alarm that “You’re going to have fewer jobs really quickly.”

Don’t fall for this argument. Nicholas Kristof (New York Times, May 8, 2020) investigated the difference between the minimum wages McDonald’s paid its workers in the U.S. and the $22 per hour it paid its workers in Denmark before inflation took off. Kristof calculated that $22 per hour, “the price of dignity,” would cost consumers only 27 cents per hamburger. McDonald’s would still be in business, Americans would pay a pittance more, and their workers would have a livable income.

Our current business model is a race to the bottom on wages, and it is fueled by the importation of cheap labor through immigration and H1-B visas. Any business which cannot survive by paying a livable minimum wage does not deserve to have a place in the American economy. There are no jobs Americans won’t take if the pay is good enough, and Nicholas Kristof shows that the cost to the consumer is far less than what business would have us believe.

It is time to regulate business to pay a livable minimum wage, and it is time to let the “free market” determine which businesses cannot survive without using what amounts to economic slavery. “Who is going to do the work nobody wants?” was the cry of the Southern slaveholder in 1860, and it is the oft-heard cry of those who would profit from economic slavery today.

— Michael McNeil, Mead