The Wages Have Gotten Too Low to Support a Family

Realistically, then, a higher minimum wage can be only part of the solution. We also need to expand the earned-income tax credit, and strengthen the social-insurance system, including child care and health care (the advent of Obamacare will help in this regard). Fast-food jobs in Germany and the Netherlands aren’t much better-paid than in the U.S., but a stronger safety net makes workers much better off. We also need many more of the “middle-class jobs” we’re always hearing about. A recent McKinsey report suggested that the government should invest almost a trillion dollars over the next five years in repairing and upgrading the national infrastructure, which seems like a good place to start. And we really need the economy as a whole to grow faster, because that would both increase the supply of good jobs and improve the bargaining power of low-wage workers. As Jared Bernstein, an economist at the Center for Budget and Policy Priorities, told me, “The best friend that low-wage workers have is a strong economy and a tight job market.” It isn’t enough to make bad jobs better. We need to create better jobs.

James Surowiecki tackles the fast food low wage debate this week by looking at the shift in the American economy in the last few decades, the key thing being that fast food jobs were never considered the kind of jobs a person would take to support a family until fairly recently (fast food jobs were mostly dominated by teens who used the money to buy stuff and go to the movies). Manufacturing and factory jobs were where people used to go to find a job that paid a decent enough salary to raise a family, but as we’ve seen, those jobs are quickly disappearing while the retail and fast food business are now becoming America’s biggest employers. They’ve done this by doing what they’ve always done — pay people low wages, and not keeping up with inflation (in 1968, the minimum wage was $10.70 in inflation-adjusted dollars).

Elsewhere, The Atlantic’s Jordan Weissmann looks at where McDonald’s workers get paid $15 an hour: Australia. Higher food prices have played a role in that.

Photo: Elliott Brown

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