A Small Step in the Right Direction

Kristine Mitchell, political science

by Kristine Mitchell, assistant professor of political science and international studies

Those who oppose raising the minimum wage—or oppose the minimum wage itself—often couch their argument as support for the free market. Governments, they argue, should not be involved in business decisions, and raising the minimum wage to “artificially” high levels will only produce high unemployment. But it can hardly be argued that minimum wage is too high in the U.S., where a full-time worker earning the federal minimum wage makes around one-quarter of the national average, full-time salary. By this measure, the U. S. is at the bottom of the world’s advanced economies, second only to Mexico. In virtually every other wealthy country, the minimum wage represents one-third or one-half of the average wage—and in half of these countries, unemployment levels are lower than they are in the U.S. Clearly there is room for raising the minimum wage without catastrophic effects.

To the extent that health and education shape individuals’ life chances, Americans’ opportunities to succeed are determined far more by their earnings than in most other rich countries. Elsewhere in the industrialized world, life chances have been largely de-coupled from earnings by making education and access to health care basic rights of citizenship. In contrast to other rich countries, where everyone has access to education and healthcare regardless of income level, American families are called on to pay for their children’s higher education and—in the absence of employee-provided insurance—their health care. When income is scarce, as it is for most minimum-wage earners, families are too often compelled to compromise their health and their children’s future just to make ends meet. The result is that income inequality translates into rigid social inequalities as well.

Raising the minimum wage helps improve living standards for the lowest-paid American workers, and it is a step in the right direction. But it will do little to alter the unequal life chances of Americans whose opportunities are limited in significant ways by their wealth. It also will do little to narrow income inequality, which is driven more by the vast increases in wealth for the top one percent than by the stagnation of wages at the bottom of the pay scale.