If you need a job making $15 to $20 per hour, would you apply at Wal-Mart? If you live in Williston, North Dakota, you just might. The very fact that a company known for underpaying its workers is offering such wages has started some interesting conversations about minimum wage.
(Photo Credit: 401(K) 2013/Flickr)
The economy in the immediate area around Williston is booming thanks to the Bakken oil fields. There are enough jobs with decent wages available in the area that the only way Wal-Mart can staff its stores is to pay relatively well. This is not a sign that Wal-Mart is suddenly philanthropic, however — just that the company will pay what it has to pay, in order to secure labor.
Do We Need One Living Wage?
Some consider this anomaly evidence that we don’t need a living or even a minimum wage. The argument is that employers will pay the wages that the market will bear, meaning they will pay more if it’s the only way to get people to apply to work for them. Paying more is preferable to going out of business. Perhaps we should be hesitant to assume that each and every employer is paying a reasonable rate for the area in which they do business. If that were true, we would not have working families living in poverty. In reality, when jobs are scarce, the market will bear slave-wages, because some workers consider it better than nothing. Leaving wages entirely up to business owners is a mistake.
But does one minimum wage for the entire country make sense, or should minimum wages be set by local governments? John Pepper, co-founder and former CEO of Boloco, told PayScale that Seattle’s $15 minimum wage is a step in the right direction. In the long run, it will be good for businesses, as well, as employees no longer need a second job just to get by and have the “mental bandwith” to focus on doing a good job (instead of worrying about how to make ends meet this month.) Employers and employees may build great things together.
However, $15 for each and every city and town may not be reasonable. Some areas may set a living wage at $10.10 per hour, another at $17.
What About Overtime Pay?
Pepper goes on to suggest we “meaningfully reduce the 1.5x overtime pay rule.” His argument is that with higher wages, employers will not be able to afford to pay workers for more than 40 hours per week. Employers would rather, according to Pepper, escort workers to their second jobs.
The idea that 40 hours of work per week could pay less than a living wage is concerning. President Barack Obama has pushed to expand, not constrict, overtime pay laws alongside his efforts to raise the minimum wage. In March, Obama expanded overtime eligibility so that employees with low salaries, among others, may receive overtime pay. Before, workers with low salaries could work 50 hours per week for the same pay as if they had worked 40 hours. For them, there was no time left for a second job.
If employers need workers for more than 40 hours per week, perhaps it’s time to hire additional staff.
Tell Us What You Think
Do we need one fixed minimum wage? Why or why not? Leave a comment or join the discussion on Twitter.