There has been much discussion lately about raising the minimum wage. This seems to be in response to the growing wage disparity in the United States, along with the recognition that most people relying on the minimum wage for full-time positions live in poverty.
While those receiving minimum wage now may reap the benefits of changes in this law, it would not be without unwanted side effects: some people would lose their jobs, if employers cannot afford the increase; and unemployment would rise, as employers look to automation and customer self-service as alternatives to hiring low-skill labor.
The timing of this proposal is not the best, either. The nation is still recovering from the deepest recession since the Great Depression, and there is a great deal of uncertainty and anxiety over the impact of the Affordable Care Act (ACA) on both individuals and businesses.
The second reason it is not the best timing is that the ACA is beginning to kick in, and full-time employees, even if they are receiving the minimum wage, will get covered by health insurance, which for those who were not previously covered, is a like a huge pay boost.
One side effect of the ACA has been the reluctance of employers to take on full-time employees, though places like WalMart are notorious for keeping their workers from reach full-time status so they can avoid paying benefits.
An alternative to raising the minimum wage is to raise minimum wage for only temporary workers. This would help low-wage workers while making the WalMarts of the world do right by their employees. It would force some employers to convert some of their temporary work force into permanent employees, and those that are not converted to permanent might be considered legitimately temporary, and still benefit from a pay increase.
Such a policy might need to be tweaked a little: possible exclusions would need to be considered for younger workers (say, those less than 21) – otherwise, those working part-time during high school and college might possibly be squeezed out of the job market entirely.
This won’t solve all labor-market and wage problems: this still would encourage employers to think about automation and self-service. Yet it would serve to correct some disparities that arise because of the legal difference in full-time versus part-time statuses. Best of all, it would seem to do some genuine good for some of the least powerful and most disadvantaged in our country.