Thursday, July 7, 2016

What's Wrong with the "Minimum Wage Challenge"

In support of raising the minimum wage to $15/hour, politicians have been asked to take the #MinimumWageChallenge - to live for a few days on the amount of money a minimum-wage person has.  See more at

The idea is that after housing you get $17/day to live - food, transportation, medical, miscellaneous.

A $15/hour minimum wage is a good idea, but the #MinimumWageChallenge shows up some flaws in both the assumptions, and with our underlying social system.

1) A lot of people put most of their emphasis on the challenge of affording food on a minimum wage job. Actually, this is the easiest part - IF one can get to and from a discount grocery store. High quality very lean pork loin is $1.98/lb. Diced tomatoes are $2.19 for a 6lb-6oz can - $0.12 for a large serving. Dried beans are $14.49 for 20 lbs - enough for 240 servings, or $0.06 per serving. [Sam's Club prices]

2) Transportation is a huge problem on a low wage, but it's mostly not about the cost. For those who can't afford a car, the cost of bus fare is not the major problem. The problem is where you can and can't get via public transportation. From where I live, it's a 5 mile walk or bike to the nearest public transportation - and half of American homes are even further from affordable transportation. Also, many jobs are essentially unreachable via public transportation. Same with discount superstore groceries. Raising the minimum wage a few dollars won't fix this problem. America need to do much more work on public transportation and on urban planning that addresses the needs of low-wage workers for accessible housing, jobs, and shopping.

3) Medical costs are a huge variable for any family. Some people are young and healthy. Others have substantial medical needs. I have Medicare, yet my average medical out-of-pocket expenses (just for myself, not counting my family) exceeds the $17/day that a minimum wage person has available for ALL non-housing expenses of a whole family. Clearly, medical expenses cannot be addressed by any practical minimum wage proposal. America needs to provide medical care for all with NO (or nearly no) out-of-pocket expense to the patient.

Bottom line: The #MinimumWageChallenge shines even more light on America's urban planning and afordable medical care challenges than it does on the minimum wage issue.  Do take a look at