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What is minimum wage in the US?

What is minimum wage in the US?

Society

In the United States, 82.3 million workers over the age of 16 receive pay by the hour.

Nobel Prize Winning Economist & Stanford Professor Paul Romer sits down with Rebellion Research

This figure represents more than half of the total number of U.S. workers, paid in either salary, or per hour, in 2021 (Caplan). Safe to say, the dilemma of how much an hourly worker should become paid has no shortage of stakeholders. 

The United States government has established a federal minimum wage of $7.25 for each hour worked (“Minimum Wage”). In recent history, there has been a push to increase this figure to $15 per hour, a figure that the policy’s supporters deem a “livable wage”. Some states have already moved towards this goal, and have passed laws at the state level increasing the minimum wage. The image below shows the minimum wage in each state (Kiersz). 

Figure 1 (Kiersz)

There are generally two schools of thought regarding the increase of the minimum wage. First, supporters say that employers have a duty to pay their workers a livable wage. A wage is considered ‘livable’ if it allows for “the worker to enjoy a ‘normal’ standard of living” (MacDonald). Opponents of increasing the minimum wage say that labor should become treated as a commodity. And the employer should give in exchange to the laborer only what that labor is worth.

The worth of labor, and therefore wages, should become established through supply and demand for the type of labor that the employee is providing within the market (MacDonald). In this, it appears the opposition follows a more classical economic approach, supported by the likes of Adam Smith and David Ricardo, who both agreed that labor has a set monetary value (Kelly). The term ‘classical’ is not always synonymous with the term ‘correct’. 

Question: 

Using an ethical analysis, how can one determine the right way to approach the minimum wage dilemma?

Who is Earning Minimum Wage?

Critical to many consequentialist forms of ethical analysis is who will be affected. In this case, who is earning minimum wage in the United States. In 2019, there were 1.6 million workers who were paid the minimum wage or less. This represents just 1.9% of all hourly employees (USAFacts). For those who were paid less, usually tipped employees such as waiters, the employer is legally obligated to cover the difference between what the employee made (including tips), and the minimum wage (“Tips”). 

Of the 1.6 million workers being paid the minimum wage or less, the U.S. The Bureau of Labor Statistics found that 48% were under the age of 25. Of all hourly workers (82.3 million), the Bureau also found that 2% of women compared to 1% of men were paid at or below minimum wage. Additionally, 1.4% of whites, 1.2% of Asians, 1.9% of black or African American, and 1.3% of Hispanic or Latino workers were paid minimum wage or less (“Characteristics of”). 

With the context of who is currently earning minimum wage in the United States, we can progress to an evaluation of the two typical sides to the minimum wage debate.

The arguments:

The quantity of arguments for and against a $15 minimum wage is mountainous, but there are a few which are most commonly cited for each side of the argument. The outline below is by no means an all-inclusive list, so the absence of a particular argument is by no means invalidating that argument. The goal is to showcase the most frequently presented arguments. 

Raise the minimum wage:

  • Purchasing power of minimum wage earners has decreased because while the minimum wage has remained stagnant, inflation has continued. This eroded the ability of minimum wage earners to support themselves. Figure 2 shows the wage demanded at the March on Washington, and compares it to what their demand ($2.00) in 1963 would have equated to in “2020 Dollars” ($9.24).
    • In an article written for Forbes, Kelly Smith references a study by the Pew Research center, which found that, inflation adjusted, “the $4.03 per hour minimum wage in January 1973 has the same purchasing power as $23.68 in August, 2018” (Smith). For supporters, this is sufficient evidence that a $7.25 minimum wage is not fit for the times. And should become changed to $15.
Figure 2 (Smith)
  • A second argument of the supporters of a minimum wage increase is that at the current level, earners are not able to experience a ‘normal’ standard of living. They state that all employees should be paid a “livable wage”. A livable wage can be defined as a theoretical level of income where an individual can afford sufficient food, shelter, healthcare, transportation, and other necessities (Kagan). They believe that if the minimum wage is increased from $7.25 to $15, more individuals and families will be able to afford basic necessities. 

Do not raise the minimum wage:

  • The principal argument for not raising the minimum wage has to do with job loss. This February, the Congressional Budget Office estimated that if the minimum wage was  raised to $15, an estimated 1.4 million jobs would be lost in the next four years (Cox). As wages rise, the increased input costs for businesses would be passed on to consumers in the form of higher prices. Because of the increased prices, consumers would purchase less goods. As the demand fell, less goods would become produced. And if less goods are being produced, fewer employees are needed (Cox).
    • Businesses will also tend towards automation if the cost of hiring employees for entry level jobs is beyond the benefit of doing so. An example is Amazon’s Go Grocery stores, which aim to operate a commercial sized grocery store with just 3-10 employees (Manskar). While the technological advancement to build these stores will undoubtedly create jobs, it is removing entry-level jobs, which hurts low wage workers. 
  • Another thought process which terminates in the view that the minimum wage should not be increased relates to small businesses specifically. There are 31.7 million small businesses in the United States today, and those businesses employ about 47% of all workers in the United States. Their average profit margin is 7%. For some of these businesses, increasing the minimum wage to $15 could be catastrophic (Wiener). Specifically in rural areas, where a small business may be the only provider of a good or service, hiring fewer employees to lower costs would lead to inefficiency. The inefficiency or shortages created could then trickle down to other members of the community. 

Would a utilitarian change the minimum wage to $15 per hour?

Utilitarianism, a consequentialist ethical framework concerned with creating the greatest net happiness, is a natural method to answer the question of if the minimum wage should become changed to $15 an hour (Shaw). The number of people who could be positively or negatively impacted by an upward change in the minimum wage is vast. Employees, families of employees, businesses as entities, business owners, communities, and politicians all number among the stakeholders. In my eyes, it boils down the fact that in this case, one size does not fit all. The United States is a big country, and within it are vastly different communities with different priorities, ideals, and values.

Take for example, the lifestyle differences between an investment banker on Wall Street and a seasonal potato farmer in northern Idaho.

Harvesting potatoes in Idaho’s Boise Valley, circa 1920.

While this is merely an anecdote, it applies to the minimum wage debate. Different parts of the country have vastly different costs of living, and thus the minimum wage increase would have different impacts (See figures 3 & 4). In New York City, the cost of living is widely known to be astronomical, and the wage hike may help more citizens than it hurts. However, if we looked at a smaller population center, the opposite could be true, because of all the reasons outlined by those opposing the change.

On a scale as large as the United States, the web of effects that would become drawn by a blanket implementation of a $15 per hour minimum wage would be near-impossible to untangle. A utilitarian would have an incredibly difficult time deciding what the ‘right’ decision was. However, if it was implemented on a state-by-state basis, I believe that a utilitarian would be able to more effectively see the impacts, both positive and negative, that the policy change would have. It is likely that a utilitarian would support raising the minimum wage in some states, but be against it in others. 

Figure 3 (Bureau)
Figure 4 (Gauthier)

Written by Ethan Van De Water

See Ethan’s piece: How do you define culture?

Works Cited

Bureau, US Census. “Median Household Income for Counties in the United States: 2013-2017.” Census.gov, 8 Oct. 2021, https://www.census.gov/library/visualizations/2018/comm/acs-5yr-income-all-counties.html

Caplan, John. “America’s Hourly Workers.” Forbes, Forbes Magazine, 12 Mar. 2021, https://www.forbes.com/sites/johncaplan/2021/03/12/americas-hourly-workers/?sh=7595f23c579c

“Characteristics of Minimum Wage Workers.” U.S. Bureau of Labor Statistics, U.S. Bureau of Labor Statistics, 1 Feb. 2021, https://www.bls.gov/opub/reports/minimum-wage/2020/home.htm#table-1

Cox, Jeff. “Raising Minimum Wage to $15 Would Cost 1.4 Million Jobs, CBO Says.” CNBC, CNBC, 8 Feb. 2021, https://www.cnbc.com/2021/02/08/raising-minimum-wage-to-15-would-cost-1point4-million-jobs-cbo-says.html

 Gauthier, Jason. “Maps – History – U.S. Census Bureau.” United States Census Bureau, https://www.census.gov/history/www/reference/maps/

Kagan, Julia. “What Is a Living Wage?” Investopedia, Investopedia, 29 Sept. 2021, https://www.investopedia.com/terms/l/living_wage.asp

Kelly, Robert C, and The Investopedia Team. “Labor Theory of Value Definition.” Investopedia, Investopedia, 13 July 2021, https://www.investopedia.com/terms/l/labor-theory-of-value.asp

Kiersz, Andy. “These Maps Show How the Minimum Wage Has Become Another Crack in the Country’s Economic Divide.” Business Insider, Business Insider, 9 Jan. 2020, 

https://www.businessinsider.com/minimum-wage-state-map-increases-2020-1

MacDonald, Chris, and Alexei Marcoux. “Ethics of Wages and Working Conditions.” The Concise Encyclopedia of Business Ethics, 25 Apr. 2018, https://conciseencyclopedia.org/entries/wages-and-working-conditions/ 

Manskar, Noah, and Josh Kosman. “Amazon Opens Full-Size Grocery Store with No Cashiers.” New York Post, New York Post, 26 Feb. 2020, https://nypost.com/2020/02/25/amazon-opens-full-size-grocery-store-with-no-cashiers/

Shaw, William H. “Chapter 2 Normative Theories of Ethics” Moral Issues in Business. Accessed 25 October 2021. 

Smith, Kelly Anne. “What You Need to Know about the Minimum Wage Debate.” Forbes, Forbes Magazine, 6 July 2021, https://www.forbes.com/advisor/personal-finance/minimum-wage-debate/

“Tips.” United States Department of Labor, https://www.dol.gov/general/topic/wages/wagestips

USAFacts. “Minimum Wage in America: How Many People Are Earning $7.25 an Hour?” USAFacts, 25 Mar. 2021, https://usafacts.org/articles/minimum-wage-america-how-many-people-are-earning-725-hour/. Wiener, Jeff. “What Is the Average Profit Margin for a Small Business in North America?” The Kickass Entrepreneur, 26 May 2021, https://www.thekickassentrepreneur.com/average-profit-margin-small-business/.

What is minimum wage in the US?

How do you define culture?

Education

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Pygmy music has been polyphonic well before their discovery by non-African explorers of the BakaAkaEfe, and other foragers of the Central African forests, in the 1200s, which is at least 200 years before polyphony developed in Europe. Note the multiple lines of singers and dancers. The motifs are independent, with theme and variation interweaving. This type of music is thought to be the first expression of polyphony in world music.

Culture is a complex anthropological concept. John Monaghan, in his book Social and Cultural Anthropology: a Very Short Introduction, writes that “there have probably been more anthropological definitions of ‘culture’ than there have been anthropologists.” From this, it is clear that even at the scholarly level, there is difficulty nailing down an all-encompassing definition for the term.

Evidently, there will exist similarities between different definitions of culture, which can be used to generally characterize what is, and what is not culture. It is through these similarities that a working definition for culture will be synthesized, and used to analyze the origins of cultural identity at Phillips Exeter Academy

Also in Social and Cultural Anthropology: a Very Short Introduction, Monaghan says that “however we define culture, most anthropologists agree that it has to do with those aspects of human cognition and activity that are derived from what we learn as members of society, keeping in mind that one learns a great deal that one is never explicitly taught.” Here, the insinuation becomes that culture is a summation of thoughts and actions learned over time. And also learned indirectly, rather than taught in something akin to a classroom environment. The idea of learning culture is studied more in depth by Katherine Dettwyler in Cultural Anthropology and Human Experience: The Feast of Life. She says that culture can be simplified into three categories: what’s inside people’s heads, what people do, and what people make.

Within the first category, she emphasizes that culture is learned, shared, and patterned.

Moreover, it becomes learned because culture isn’t steadfast, it is constantly changing. Culture shared since individuals will have overlap in terms of the beliefs, knowledge, and attitudes which help them identify with a particular group. Culture becomes patterned because “we find organized systems of thought and belief, patterns of thinking and systems of knowledge, not just a random hodgepodge of factoids and unrelated ideas.” Specifically, it is this pattern of ideas and factoids that gives culture significance. 

Comparing the two expanded definitions of culture from both Monaghan and Dettwyler, a few concepts are clear. Culture is not instantaneous.

That is to say, it takes time to develop. Also, there is no explicit teaching, but rather it is ingrained into the individual by the society in which they exist. Logically, the next question is how exactly culture becomes ‘ingrained’ into an individual.

In the book The Best of The Best, the author Ruben Gatzambe-Fernandez explores the development of cultural identities at “Weston”, a pseudonym for the elite boarding school Phillips Exeter Academy, or “Exeter”. He evaluates admissions, language, and framing, in his consideration of how a student comes to identify themselves with Exeter, which is most often through the use of the term “Exonian”. 

The first step towards a student identifying themselves as an Exonian, and thus a member of the group of people which form the culture at Phillips Exeter, is the admissions process.

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First Academy Building c. 1910, where the school opened in 1783

Students, not made aware of the explicit reason that they become admitted to Exeter when they receive notice of admission. The effects of this are twofold. One, it disbands the possibility of a student who did not become admitted comparing themselves to those who were with specific evidence as to why.

Secondly, “it is the initial step toward internalizing the notion that, while ‘Weston is not for everybody,’ it is certainly for them.” The offer of admission confirms this notion in the student’s mind. It is a rite of passage, meaning it represents a passing from one world to another, in this case, the transition into Exeter from a different school environment.

Within the broad category of rites of passage, there exists a subgroup of transition rites, exemplified by the likes of betrothal, or in this case, initiation.

After students receive their admissions letter, students reflect on why they belong at Exeter. Jack Mitchell, one of Fernandez’ interviewees, attributes his acceptance to his willingness to have meaningful discussions. In his admissions interview, he recalls saying:

“I feel that I always have things to say, and if I don’t have things to say, I’m interested in what someone else has to say.”

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Phillips Church in 1911

As Fernandez mentions often, discussion skills are crucial to becoming Exonian, and Jack is trying to show that he has what it takes.

When Jack is explaining why he believes he belongs at Exeter, he is legitimizing his presence there.

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John Phillips, the founder of Phillips Exeter Academy

The term Legitimation, as defined in Peter Berger’s The Social Construction of Reality is “this process of ‘explaining’ and justifying.” In this instance, legitimation takes the form of spoken language, and allows Jack to rationalize his place at Exeter. He reasons that because he is good at discussion, one of the key parts of becoming an Exonian according to many students interviewed by Fernandez, he deserves to be at Exeter.

Post admission, and the legitimation of their own personal place in the ranks of Exeter students, individuals continue to construct their cultural identity through language. “Language might be called the domain of articulations … Language can also be compared with a sheet of paper: thought is the front and the sound the back; one cannot cut the front without cutting the back at the same time.”

Furthermore, Language becomes connected to thoughts. Which are key to internalizing a particular cultural identity. The word that Fernandez found most intertwined to the cultural identity of Exeter students is “smart”. A good way to see this becomes through the constructing of boundaries between groups on campus. Who become considered “smart”, and those considered not. “Students use the category of PG as a way to distinguish and draw boundaries around themselves as Westonians who are smart and work hard.” The word smart becomes associated with exclusively students who are not of the PG category.

Since most students view PGs as “Weston students who are not Westonians”, distinguishing themselves from PGs thus makes a student more “Westonian”.

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The Beatles exemplified changing cultural dynamics, not only in music, but fashion and lifestyle. Over a half century after their emergence, they continue to have a worldwide cultural impact.

In essence, language becomes used to reinforce their cultural identity as Westonian. As a result of separating themselves from the group considered not to be. In addition to language, there is another underlying anthropological concept in this method of cultural identification. It is framing. Frames “are mental structures that shape the way we see the world.” An example of a frame would be that Ethan is a PG, so Ethan is dumb. It allows individuals to reinforce their own ideas about culture.

Culture has no unilateral definition.

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Exeter baseball team in 1881, including a student from the Chinese Educational Mission
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1909 advertisement for the school

However, the case study of Phillips Exeter provides great insight into what exactly culture has manifest itself into. Additionally how it becomes constructed. Furthermore, students at Exeter begin as outsiders. Thus, begin the creation of their cultural identity as Exonians upon acceptance to the institution. From there, they legitimize their presence.

In conclusion, language structures to separate themselves from those considered not Exonian. And thus, more closely associating themselves with the term. Furthermore, it is a process that takes time, as culture is not instantaneous. Lastly, through what they think, what they do, and what they make. Exeter students slowly come to associate themselves with the cultural identity of an Exeter student, being Exonian. 

How do you define culture?

Written by Ethan Van De Water

Bibliography

Monaghan, John, and Peter Just. 2000. Social and cultural anthropology: a very short introduction. (Oxford [England]: Oxford University Press).

Dettwyler, Katherine A. Cultural anthropology & human experience: the feast of life. (Long Grove, IL: Waveland Press, 2011)

Gaztambide-Fernandez, Ruben A. The Best of The Best. (Cambridge, Massachusetts: Harvard University Press, 2009).

Gennep, Arnold van. The rites of passage. (Chicago: University of Chicago Press, 1960).

Berger, Peter L., and Thomas Luckmann. The social construction of reality: a treatise in the sociology of knowledge. (New York: Anchor Books, 1966).

Badmington, Neil, and Julia Thomas. The Routledge critical and cultural theory reader. (London: Routledge, 2008).

Robbins, Richard H, Sherrie N Larkin, Maggie Cummings, and Karen Ann McGarry. Cultural anthropology: a problem-based approach. 2013.

How do you define culture?