The 2016 Op-Ed

Published in The Monitor - McAllen, Texas - May 2016

The real issue behind minimum wage dispute is livable wages

I want to take a different approach to the "Income Equality" conversation currently happening around this country. There are those who advance the cause for $15 an hour. There are those who advocate for wealth redistribution. There are those who want to see an increase in taxes on the wealthy. And then there are those who have differing opinions on each item above. Each side of the issue has valid points and can generate data and anecdotes to support their claims. But they are talking over the real issue here.

That is because the conversation is centered around money - the abstract value assigned to metal, stones, paper, etc., which is used to facilitate commerce. Without money, we would be forced to barter for things; money helps by allowing for an agreed upon go-between used to purchase wanted goods and services.

As such, the real conversation for a minimum wage should focus on the necessary money needed to adequately acquire all the goods and services society has determined necessary to have a baseline standard of living - a Societal Standard of Living (SSOL).

The components of SSOL are the basic necessities like shelter, food, clothes, utilities, transportation, communication, insurance, and taxes. These are all things that are either a basic necessity of life or a requirement for obtaining a job. The encompassing list will grow and change as the economy grows and changes so that workers making the SSOL will be able to adapt to their employers' needs.

There are a few moving pieces to this but it all starts with the answer to this question: Do you believe a worker should be able to reach the SSOL through a 40-hour work week, either from one full-time job or through multiple part-time positions?

Determining the SSOL is going to be a formula based on the going baseline rates for each individual component within the region, city, borough, or neighborhood where the job being offered is located. Determine the yearly expenditures and divide that number by 2,000 (40 hours per week times 50 weeks with two weeks allocated for vacation and/or sick days). The resulting value would be the minimum wage. Each quarter or year, the formula can be updated to take into account inflation and other market-related changes. This number will then float - it can rise or fall based on market conditions.

I believe the prospect of a floating number will incentivize those corporations that predominantly rely on minimum-wage workers to work within the market to increase the supply of the basic components. For example, if the rent for one- and two-bedroom apartments is abnormally high due to shortages, there would be incentive to increase the number of available units, to increase the supply and thus drive down the rent price.

Furthermore, I would also see the concept where employers could offer their employees a better alternative for a product within the SSOL. For instance, if the going rate for an individual health insurance policy is $100 a month, the employer could offer a better plan to the employee in exchange for the $100 in the paycheck. Then it would be up to the employee whether they wanted to take it or not.

Finally, for those who are working for minimum wage, it would give them a financial road map they can use to navigate their daily lives. It would be up to the individual to follow it. But on the other hand, that same individual will have to deal with the consequences of their decisions. The decision to do so will be an informed one.

The SSOL concept changes the conversation from the arbitrary $15 per hour minimum-wage debate and "wealth redistribution" to a conversation about what the minimum wage really needs to be so the worker can have a livable wage.