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We Can live with Fewer McDonald’s. Can We with Fewer Home-Health Aides?

September 23, 2013
Plain English Version

The U.S. economy is alive with low-wage jobs. The federal minimum wage is $7.25 an hour. It may be enough for a teenager earning pocket money. It is not enough to support a family.

In the U.S., states can and often do set their own minimum wages, which are usually higher than the federal government’s minimum. Still, people earning the lowest wages will always feel poor. And the world will always see them that way.

What happens when pay is increased? Workers will have more money for living. On the other hand, business owners say they will be forced to employ fewer workers in order to keep labor costs low. Or, they say, they will have to raise prices.

If you are a worker who is now earning more, life is better. If you are a worker who is laid off, life is difficult. If you are a consumer paying more for something, you are not pleased.

The federal minimum wage law does not cover home-health workers. That will change in 2015 when new rules go into effect. For workers and unions representing these employees, this is good news. In some states, such as California and New York, state minimum wages for home-health workers are already higher than the federal wage.

How are some other workers paid? Waiters and waitresses get the minimum wage. However, it is set at $2.13 an hour plus tips. The idea is that tips will bring the total up to $7.25 an hour.

Diners pay for the food, and by tipping, they help the employer pay the server.

It is consumers who benefit from the low wages that keep prices down. That is why low wage, low price stores like Walmart are popular. But if the American economy is built on low wages, pressure to raise pay will grow. It is happening now.

Source: The Wall Street Journal

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