Scrolling through my phone to check the weather, I could not help but read the click-baity coverage of state and local politics, and the hot-button issue of the minimum wage caught my eye.
All I want is an honest representation of the debate instead of biased garbage that intentionally makes one side to look like backwards, stingy monsters. KCCI-Des Moines reporter Marcus McIntosh reported that the Iowa legislature cut some people’s hourly pay rate just in time to kill the scheduled minimum wage increase in Polk County, the eastern half of Des Moines.
In three paragraphs, McIntosh stated that Republicans voted for this proposal but without explaining why. He devoted four paragraphs to explaining why Democrats did not support the bill. Besides the media’s natural affinity for Democrats, their profit motive is to rile up the blue-collar folk to share this story, allowing KCCI to collect a lot of advertising revenue.
Maybe I can shed light on why Republicans would rescind the minimum wage increases more liberal population centers in Iowa have made. I wrestle with conflicted feelings since this is only the second full year in my life that I have had the privilege to work full-time hours, yet only took home $23,000 gross.
I worked as a dishwasher in a restaurant and now in an entry-level office position. At the restaurant, I saw my weekly hours cut to 35 from 45 to 50 when my employer could not afford Obamacare’s insurance mandate. I feel the pain, and I see coworkers struggling to make budgets on blue-collar pay. This is why it hurts to think substantively about minimum wage policy when the emotional argument is so very strong: I want higher wages for everyone, but raising the minimum wage will not do that.
Minimum-Wage Pay Goes Farther In Some Places
Yes, I make $23,000 per year gross, but I live in a small city in northwest Iowa, Fort Dodge. Wages have not seen dramatic rises here and housing prices have largely remained stagnant—which is a very good thing. If I had not racked up debt for the music degree collecting dust on its frame on my wall, I would have a house bought and paid for by now. My rent including utilities is $300 per month, and my grocery bill can go as low as $50 per month. I can drive or ride a bicycle to work in the same amount of time.
To get me to move to a city, where living close to work could be interpreted as a death wish because housing prices would require me to live in a crime-heavy, dumpy neighborhood or beyond my means in trendy apartments, I would need at least $15,000 more to have the same lifestyle I have in the town some disparage as “Fort Dirty Dodge.” However, this is the beauty of the market. With fewer resources, I choose to live in Fort Dodge, where my standard of living is much better than if I chose to live in a large city.
I do not “need” to make more than I do already. Don’t hear me wrong, I would love to make more, but “need” and “want” are not synonyms. A starter two-bedroom house that is move-in ready, but needs a few updates or renovation, starts at $40,000 in Fort Dodge.
Let’s say I want to live in a little bit better neighborhood, for the same basic house with roughly the same-sized yard, but closer to schools and in a more middle-class neighborhood. This house costs $70,000. There are super-nice neighborhoods with a handful of mansions or acreages that go for $150,000 to $300,000, even up to $400,000, but as far as this twenty-something is concerned, housing is quite affordable in my town.
Rent for a two-bedroom apartment is $600 per month after utilities, and I have a roommate, so that leaves me with plenty of room to pay off debt, have an emergency fund, save for retirement, save for a down-payment, invest, give, whatever. All things considered, $23,000 does not look so bad. In Des Moines, starter homes in the decent neighborhoods start at $100,000 or more for what $40,000 would get me in Fort Dodge. Large city living is a giant ripoff, as far as I am concerned.
Raising Minimum Wages Hurts Poor People the Most
Des Moines does not need to artificially raise the floor of their economy to make it more difficult for new businesses and entrepreneurs to enter its booming market. If it raises the minimum wage, Des Moines will block the poor from even entertaining the thought of attempting to achieve rags to riches by increasing the cost of everything. Des Moines does not need to see costs go up any more than they already have with the new construction, gentrification, and high city taxes.
If lawmakers raise the minimum wage for Polk County but not surrounding areas, the areas inside Polk County will continue to collapse as businesses relocate to adjacent areas to pay wages closer to what their business can sustain. Remember that similar cities compete for the types of jobs Des Moines has been attracting lately, and making it more expensive to run a business in Des Moines ultimately means fewer businesses will locate there. Artificially raising wages increases unemployment.
Maybe Republicans should let the People’s Republic of Polk County make their mistake, but that would not be good for the state. In addition, local officials see low-hanging political fruit with the tired political tropes of Democrats looking out for the little guy and the Republicans being stingy and in bed with business interests to the detriment of the poor worker. Now, there are more workers than business owners, but business owners provide the jobs.
Just as Obamacare had the unintended consequence of demoting me to part-time work when I was just getting on my feet after college, increasing the minimum wage will have a whole host of negative unintended consequences. When other towns have forcibly increased wages, they’ve increased the cost of living as restaurants, hotels, and businesses in general raise prices for consumers to cover their newly higher costs of doing business. Rich people can obviously afford this far better than poor and working-class people.
Democrats try to hide this by blaming greedy business owners to get people’s emotions activated so their good sense can’t kick in, but trying to argue with this law of human nature is like trying to outlaw gravity. I wish I could side with the emotional argument for a higher minimum wage, but artificially high wage floors hurt poor people the most.
The author requested anonymity to keep his personal financial details private.