Lower the Minimum Wage

Republican Senators have so far successfully stopped Democrat efforts to raise the minimum wage by offering so many amendments and parliamentary delays that Sen. Ted Kennedy was beside himself with anger. "Do you have such disdain for hard-working Americans that you want to pile all your amendments on this?" he shouted at Republicans on the Senate floor. "What is it about working men and women that you find so offensive?" This week there is going to be another vote on the minimum wage and Republicans will try once again to stop it from increasing. But while I'm sure it brings joy to the hearts of many conservatives to see Kennedy so furious, it's not enough to simply keep the minimum wage from going up. I think we need to lower the minimum wage.

Keeping the minimum wage at the inflated rate of $5.15 an hour for a decade has been a terrible drag on our economy. The number of millionaires in the United States, for example, grew only 11% from 2004 to 2005, to 8.9 million. It now takes an entire day for a CEO to earn what the average worker earns in a year. Many small businesses cannot afford to pay any wages at all let alone the artificially high minimum wage and America's bottom-heavy wages are making it increasingly difficult for us to compete in the global economy.

Compared with most countries in the world the U.S. minimum wage is extremely high. Of course, there are some worker-coddling welfare states that have higher minimum wages. In France, Great Britain and Australia, the minimum wage is more than $10 an hour. But when compared with countries like Botswana, Latvia and Papua New Guinea, we are significantly overpaying our workers.

Because American workers get paid so much, many businesses are outsourcing labor or moving overseas. If we want to compete, we are going to have to lower the minimum wage below the levels in countries such as China and India, whose economies are booming. In parts of China, for example, the minimum wage is about 20 cents an hour. In some states in India, the minimum wage is about 10 cents an hour. If we want to stop hemorrhaging jobs to these countries, we are going to have to undercut those rates.

Lowering the minimum wage would also solve our immigration problem. The minimum wage in Mexico is about 50 pesos a day, or $4.53. In an 8-hour workday, that's about 57 cents an hour, a little more than one-tenth of the U.S. minimum wage. If we just set the minimum wage below 50 cents an hour, how many Mexican immigrants do you think will risk their lives sneaking over the border for that? By significantly lowering the minimum wage below Mexico's, we could end the immigration problem very quickly.

Some Republican Senators have an even better idea: Abolish the Federal minimum wage altogether. They sponsored a bill that would let states set their own minimum wages below the already inflated Federal minimum wage. This measure would have given states the ability to compete to see who could pay workers less, helping small businesses and attracting new businesses. Some of the poorer states in the South, for example, could set their minimum wages at zero, which would allow family farmers to pay their workers by giving them room and board or scrip instead of cash. They could import workers from places like Africa, where just earning a little food and a roof over their heads would represent a significant improvement in their living standards. The South would finally rise again with this kind of economic stimulus.

Unfortunately, this measure didn't pass, but 28 Republican Senators voted for it, including potential Presidential candidates John McCain, Sam Brownback and Chuck Hagel, both of the Senators from Georgia, Mississippi and South Carolina, and the bill's sponsor Wayne Allard. These Senators know that if we are going to compete with Third World economies we need to start paying Third World wages.

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Jon Swift, Kennedy, Minimum Wage, John McCain, Executive Compensation, Democrat, Republican, Politics, Economics