Minimum Wage

Kerry wants to raise the federal minimum wage from $5.15 per hour to $7.00. Instead of raising the minimum wage, however, we should provide everyone with health insurance. Trying to improve the lot of the working class by raising the minimum wage has several disadvantages, and establishing universal health insurance would do more than raising the minimum wage would.

Regional Variations
Seven dollars an hour means different things in different parts of the country. In cities with high prices, $7 isn't enough. In rural areas, where real estate is cheap and the economy is slow, $7 is too much for local businesses to pay. Why should employers all over the country have to pay the same minimum wage when it isn't the same at all?

Uneven Coverage
Raising the minimum wage doesn't help the poorest people: those who work in jobs not covered by the minimum wage and the unemployed. In fact, for the poor that don't benefit from an increase in the minimum wage, it leads to higher prices. The poor, for example, are more likely to shop at low-end stores with minimum-wage workers, so an increase in the wage will affect prices that the poor pay more than prices paid by the wealthy.

Cost and Value
Raising the minimum wage increases the cost of labor without increasing its value. This change makes it less cost-effective to hire people. A higher minimum wage also forces an employer to pay enough that they can attract more skilled employees. College students home for summer are more likely to take minimum-wage jobs from the poor that really need them. The earned income tax credit, on the other hand, is an example of a federal policy that helps out the working poor without making them more expensive to employ.

Universal Healthcare
Providing healthcare to all our fellow citizens would do more to help minimum-wage workers than raising the minimum wage. A national healthcare program would
help small employers to compete against big corporations and to expand. It would make it cheaper to hire and employ workers. It would give poor workers something that they can't get just by working harder and living thriftily. And it would decrease hospital prices by reducing defaults on hospital bills.

July 2004



The king and his cohorts have at last bested Vaerm, the great red wyrm.