“The Other 98%” Doesn’t Understand the Minimum Wage
Yet another prominent left-wing Facebook page, The Other 98%, has posted a meme calling for an over 100% increase in the current federal minimum wage. While raising the minimum wage from $7.25 to nearly $15 an hour might sound good, the arguments The Other 98% use consist of strawmen, appeals to emotion, and economic illiteracy. Below is the meme that was posted:
The first thing wrong with this image (other than the number of shares, likes, and comments it got) is that its assertion of CEO pay is incorrect. Most CEOs do not make $10,000 an hour, but rather a median pay of $170k for an entire year (ranging from $76k to $437k). This is like saying, “I don’t understand why restaurant workers make $50 an hour! Unfair!” but completely omitting that the restaurant workers you’re referring to are high-end sushi chefs on a cruise ship. Would it be accurate to lump their pay in with a McDonald’s worker? Of course not.
The second thing wrong with this meme is it expects salary and wages to be based on fairness and equality instead of supply and demand of the labor market. For instance, a CEO has experience and skills a fast food worker does not. He can calculate for economic trends, works much longer, likely has a degree, and can make executive decisions that could impact thousands of workers. Since there are fewer people who can do this (the supply of these people is less), the demand for their work is high, and they can charge companies much more for their work. Conversely, it might be hard to stand on your feet flipping patties all day, but it’s the hard reality that there are millions of other people who can do that too. This is why you can only charge $7.25 for your work, competing with millions of other Americans for this job.
The third thing this meme gets wrong is that it assumes evenly redistributing salaries would somehow result in massive pay raises for all workers. This isn’t true, and can be debunked with simple math. Take any CEO of a major company and evenly divide their pay among their employees. Let’s start with McDonald’s:
7,910,000/1,900,000 = 4.16
Are we really sure four dollars and sixteen cents a year (at best) is going to be lifting anyone out of poverty? Why the obsessive comparisons? Could it be because some on the left don’t care about helping the poor, but rather bringing down the rich?