GUEST OPINION: Raise the Minimum Wage

By on December 1, 2015

Workers’ wages are not keeping pace with soaring rents, so it’s time town council take action.

The Town of Jackson could lead the way toward a fair wage minimum. (Photo: commondreams.org)

The Town of Jackson could lead the way toward a fair wage minimum. (Photo: commondreams.org)

Jackson Hole, WY – I’ve been writing these bi-monthly columns from the perspective of the average resident; low-to-middle-income Jackson residents who are likely dealing with at least housing insecurity, and probably income and health care insecurity as well.  For many of these people, housing is a very important issue. But it’s decidedly not the only issue, so today I’d like to address the minimum wage in Teton County.

The federal minimum wage (which supersedes Wyoming’s minimum wage of $5.15 per hour) is $7.25 per hour. Working 40 hours a week, that totals $290 a week, or $15,080 a year. Free market cultists will (wrongly) argue that there should be no minimum wage, but if you accept that there should be one, you cannot seriously argue that it should be $7.25 an hour in Teton County, where housing alone would likely eat up three quarters of that income.

Financial advisers will often tell you not to spend more than 25 percent of your income on housing. Now let’s pretend that housing is readily available for $600 a month in Teton County. We all know it’s not, but someone will probably send me an ad for a basement closet bedroom and tell me I’m wrong, so let’s just play along.

If you’re spending only 25 percent of your income on housing, and your housing costs a minimum of $600 a month, then you need to make $2,400 per month at minimum, year-round. This works out to $15 an hour. That should be the starting point, a starting point that assumes you have no dependents and that you can actually find housing for $600 per month, and that the job that pays you $15 per hour is actually available year-round.

If you believe there should be a minimum wage, there is really no argument against making that minimum wage $15 or more. I’m not going to argue with people who believe there should be no minimum wage for fallacies, such as it denies people the freedom to work, hurts employment, or isn’t affordable. Those arguments have all been debunked repeatedly and thoroughly, and if you still believe them it’s because you prefer a comfortable ideology to real life data.

Two arguments in particular, however, are worth exploring. The first is that a local raise in minimum wage will reduce employment as businesses subsequently decide to pack up and leave town; this is a popular argument against local raises, as opposed to national (and universal) raises. But this argument has recently been refuted in Seattle, where the minimum wage was increased to $15 per hour, and there has been, if anything, only an increase in restaurant employment. One of the reasons businesses don’t move is because minimum wage workers are, for the most part, in service industries, and these are the kinds of jobs that are not easily exported.

The second argument is that it’s unfair to employers. This might seem to make sense at first blush, but let’s talk about what’s really unfair here. Employers (especially large, service-oriented employers) are driving the labor demand in Teton County, which is exacerbating our housing shortage. When they pay their employees less, we end up paying more. Employers will argue that they are already paying to mitigate this cost. But not only are they not paying all of the cost, we are forgetting that there is a multiplier effect with each new employee. After all, employers also require services with more employees, who then require more services. None of these costs are ever fully offset, and that leaves the taxpayers footing the bill.

There are a couple other things worth discussing here, too. The first is the J1 visa program for guest workers, and the second is the county’s lack of authority to set a minimum wage.

Love it or hate it, the J1 visa program undeniably drives down wages for local employees. It’s ostensibly designed to offer cultural exchange experiences to foreign workers, as well as provide them with valuable job training. In reality, the program (and its workers) is often abused. Workers pay money to come here expecting to learn something in an intern-like position, and instead discover that they are just doing manual labor with little opportunity for cultural exchange. Usually, they are paid very poorly, but many have families who fund their participation. The result is predictable; local workers (including year-round legal immigrant workers) are seeing downward wage pressure as a result of having to compete with workers who are able to work for very little. Instead of promoting cultural exchange (a worthy goal) the program is being used to provide large local employers with a steady supply of often exploited and poorly paid workers. I have not been able to get a definitive answer as to whether a minimum wage ordinance would apply to J1 visa workers, but it should.

While the town has the power to set a wage floor, the county does not. It’s unclear what the effects would be of a town-only minimum wage hike, but some research should be done. And it’s possible that the county could use a carrot-and-stick approach to requiring a higher wage floor; I hope we can commence a discussion on how that might be done. In the meantime, raising the minimum wage in town is something that can be done now, and town council should begin discussions towards that end. PJH

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