Why a Minimum Income Might Work Better Than a Minimum Wage
NEW YORK ( MainStreet) Although it's a little hard to imagine in today's politics, once upon a time America actually considered its labor something to celebrate. Workers built powerful groups like the Teamsters Union, got weekends off, earned their own national holiday and, most important to this article, changed the face of employment forever with two simple words: minimum wage.
At this time of year just post Labor Day--after having cooked our burgers and enjoyed a Monday all to ourselves--let's take the opportunity to think about this landmark achievement. Is a minimum wage really the best way to fight poverty and poor working conditions in America? Instead of requiring a minimum wage, what if the government simply handed out cash, guaranteeing a minimum income to all Americans no matter who they are or what they do?
Bear with me. It's not that crazy.
First and foremost, a guaranteed income has the virtue of simplicity. Instead of trying to solve poverty by indirect routes (help with housing, food stamps and minimum wages), this would ensure everyone enough money on which to live the easy way: by just giving it to them.
As Martin Luther King, Jr. wrote in Where do We Go From Here: Chaos or Community?
"In addition to the absence of coordination and sufficiency, the programs of the past all have another common failing -- they are indirect. Each seeks to solve poverty by first solving something else.
"I am now convinced that the simplest approach will prove to be the most effective -- the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income."
Poverty is a problem of people not having enough money, so let's just give them some.
From an economic standpoint, there's value to getting that much money into circulation. A minimum income shares the virtue of a minimum wage in that it creates a nation of much more viable consumers.
As David Cooper, from the Economic Policy Institute argued, "When you raise the minimum wage you shift money from corporate profits to low income people... The thinking is if we get more money into the pockets of people who are going to spend it right away. Then we get more economic activity."
Like a minimum wage, a minimum income ensures more tenants, customers and clients, which can only help business owners and the employees they hire. This especially goes for small businesses that are far more likely to provide day-to-day goods and services. When someone doesn't have much money (take it from a writer) their money doesn't go into a complicated investment account, it goes to the grocery store.
The difference is that a minimum income would apply to everyone. A minimum wage only boosts spending power for people who can get a job. A minimum income leaves nobody behind. In addition to the economic benefit, there's even something to be said for the humanitarian bonus: no more Americans homeless, poor and hungry. People might make bad choices, but everyone would have a shot.