Minimum Wage - Farce or Tragedy?

Minimum Wage - Farce or Tragedy?
Minimum Wage - Farce or Tragedy?
Recently, the Bellingham Herald carried an article about the minimum wage in Bellingham, "Bellingham’s citywide minimum wage for 2025 is now set. Here’s what the new rate will be." *
“…from May 2025 until the end of the year, Bellingham’s minimum wage will be $18.66 an hour. The following year, Bellingham’s minimum wage will be $2.00 higher than the 2026 statewide rate, which will be announced by L&I next September.”
Should one crow or cry? To answer that, I went back to an article about the minimum wage that I had written in 2015, “$15/hr Minimum Wage - Seriously?” Permit me to quote myself:
“In order to reset the minimum wage to anything near a living wage, it must be raised to about $21 an hour TODAY [2015] which would bring it in line with the purchasing power the minimum wage represented 4-5 decades ago.”
and
“By the time 2022 rolls around, one will likely need about $25/hr to keep a family afloat in any meaningful sense, let alone make any advancement whatsoever.”
Since we have already blown past 2022, and now only $18.66/hr is coming in 2025, “cry” wins, hands down. In reality, $21.00/hr was what we actually needed a decade ago and we ain't even there yet. Obviously, the $25/hr I projected as necessary by 2022, remains inadequate in retrospect. As Simon and Garfunkel sang in “Mrs. Robinson”…"Every way you look at it, you lose." And yes, we ALL lose because as a society, we are economically dragging minimum wage employees around like a fiscal sack of potatoes, striving to get to a “just” minimum wage, but missing the mark time after time after time. Non-paradoxically, Zeno would have loved this.

Minimum wage workers face more hurdles than merely a wage that is grossly insufficient to live on. They lack, or cannot afford, health care or disability insurance. Vacation time is a risible non-starter. Irregular hours or part time positions do not allow them to plan their days or weeks ahead. Workplace conditions are often deplorable, dangerous, and even inhumane. In Bellingham, even a full time minimum wage worker (40 hrs per week) will only gross $39,000 per year or just under $3,300 per month. Average monthly rents in Bellingham for a one bedroom unit is $1,500 which will suck up 50% or more of post-tax income… and that is only for the “lucky,” minimum wage workers who are employed full-time. But, lo and behold, minimum wage workers in Washington/Bellingham are doing much better relative to the rest of states. See map at right.
Might I also posit that the minimum wage, we are told, is geared to some ambrosia-like concoction called the Consumer-Price Index (CPI). You can read about the CPI at the previous link, but most sentient beings will realize upon reading this argle-bargle that the index(es), or their sub-components, are not prepared by anyone who actually buys gas, visits a super-market, attempts to buy or rent a home, or in fact, lives in a place other than the land of Honalee. If you don't believe me do the calculation yourself:
The price relative (using a Laspeyres formula) is given by:

where, the geometric price relative for the item-area combination (i,a) from the previous period t-1 to the current period t; the Laspeyres price relative for the item-area combination (i,a) from the previous period t-1 to the current period t; the price of item j, which is a member of item stratum i, for which a price quote is being collected in area a, observed in period t; the price of the same item j in period t-1; an estimate of item j’ s price in the base period; and item j’s weight in the base period.The product and sums in the formulas presented above are taken over all price quotes which are usable for estimation in the item-area combination (i,a). It is important that the price of each quote be collected (or estimated) in both periods in order to measure price change.
You can use the formula to keep track of prices yourself from month to month. Easy peasy, eh?
Now, before I am inundated with comments to the effect that higher minimum wages will raise the costs for businesses that will, in turn, raise the cost of restaurant meals, groceries, or whatever items depend on minimum wage workers for “affordable” pricing, I have this to say: We need to step back and question the economic model that requires workers to toil for a pittance so that someone makes a profit.
*My apologies to those who might face the pay wall at the Herald.
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