Warren Rule: Minimum Wage Earner Should Be Able to Afford Spouse, Child and Mortgage
Sen. Elizabeth Warren told a story at the She the People Presidential Forum last week, illustrating the tough life she lived before growing up to become a Harvard Law professor and then a senator.
“My daddy has a heart attack. Everybody thinks he is going to die,” she said. “He comes back home. He can’t work.”
“My mother has never worked outside the home,” she continues. “We lose our family station wagon. My mother is terrified.”
But that did not stop her from getting a job.
“She put on her high heels. She walked to the Sears, and she got a minimum wage job answering the phones,” said Warren. “The minimum wage job saved our home, and it saved our family.”
Inspired by her mother’s experience, Warren wants a minimum wage job to pay the expenses for a family of three.
The vision of government behind this, she explains, derives from three lessons she learned when her mother had to go to work.
The first two lessons Warren cited made her sound as if she might be promoting hard work and self-sufficiency. They included “it doesn’t make any difference how scary it looks” and “you take care of the people you love.”
But her final lesson was this: “the third thing I learned eventually about that story is it’s a story about government and how, no matter how hard you work, the rules that are made by the people in government will still make the big difference in your life.”
She did not say this as an admonition against big government but as an endorsement of it.
“Because when I was a girl, a full-time minimum wage job in America would support a family of three,” she said.
“It would pay a mortgage. It would cover the utilities, and it would cover food,” she said.
“Today, a minimum wage job in America will not keep a momma and a baby out of poverty,” Warren concluded. “That is wrong.”
Today, the federal minimum wage is $7.25. The Bureau of Labor Statistics published a report in March explaining who earns it.
There were 81,915,000 people 16 and older in the United States in 2018 who worked for an hourly wage, according to BLS. And 1,711,000 — or 2.1 percent — were paid at or below the minimum wage.
Why would somebody be paid below the minimum? “(A) ‘tipped employee’ — a worker who ‘customarily and regularly receives $30 a month in tips’ — may have his or her cash wage from an employer reduced to $2.13 per hour, as long as the combination of tips and cash wage from the employer equals the federal minimum wage,” explains the Congressional Research Service.
Of the 1,711,000 workers paid the minimum wage or less, only 905,000 were 25 and older.
In other words, only 905,000 — or 1.1 percent — of the nation’s 81,915,000 hourly wage earners were both 25 or older and earning the minimum wage or less. The other 98.9 percent were paid more than minimum wage or younger than 25.
And, according to the BLS, the workers making at or below the minimum wage were disproportionately concentrated in one industry.
“The industry with the highest percentage of workers earning hourly wages at or below the federal minimum wage was leisure and hospitality (11 percent),” said the BLS report. “About three-fifths of all workers paid at or below the federal minimum wage were employed in this industry, almost entirely in restaurants and other food services.”
Specifically, according to Table 5 in the report, of the 1,711,000 workers paid at or below the minimum wage, 1,049,000 — or 61.3 percent — worked in the leisure and hospitality industry.
“For many of these workers,” the BLS said, “tips may supplement the hourly wages received.”
Should the federal government force a restaurant to pay a college-aged kid working 40 hours a week enough to support a spouse, a child and mortgage? If you follow Warren’s logic, the answer is yes.
Warren is right that America has a wage problem in some industries, but she is looking in the wrong place for a solution.
As far back as 2005, the Social Security Administration Office of the Inspector General published a report on “Social Security Number Misuse in the Service, Restaurant, and Agricultural Industries.”
“(W)e believe SSN misuse in the service, restaurant, and agriculture industries is widespread,” said the IG.
“We identified various types of reporting irregularities, such as invalid, unassigned and duplicate SSNs belonging to young children and deceased individuals,” said the IG.
“Employers and industry association representatives acknowledged that unauthorized noncitizens contribute to SSN misuse,” said the IG.
“We use the term ‘unauthorized noncitizens,’” the IG explained, “when referring to individuals who do not have permission from DHS to work in the United States but who are working — regardless of whether they entered the country legally or illegally.”
If Warren wants to see wages rise among people working in the industry most likely to pay the minimum wage or less, she should demand that the government secure the border and enforce the immigration laws.
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