The logic behind minimum-wage laws can be baffling. Specifically, it ignores key differences between rural and urban areas. As I’ve written elsewhere, those differences include costs of living, but they also include, you know, how much work the workers do.
Business is often slower in small towns. Some of the consequences of slow business are obvious, like higher prices (i.e. because of the lower volume of sales, the profit margin must be higher to maintain profit). But slow business has other consequences. Principal among them is the volume of work for workers.
I work part-time at a mom-and-pop liquor store in a small-ish town. I work on Sundays, when the store is typically slow. And when I say “slow,” I mean that the store is empty the majority of the time, literally. It is downright unusual to have two customers at once.
I like working at the store when it’s slow. Not because I’m lazy, I don’t think, but because I can interact with the customers differently, like open the door for them after they pull up, or help them figure out what to buy. Or, navigate the inevitable “I just want something different” trap, which typically comes from a skinny, bearded guy from out of town who is swimming in the craft beer section and its seemingly endless, zanily-named options. It’s small-town, small-business service, I guess.
Also, and just as important, I like working when it’s slow because I can go an hour or two without seeing a customer, meaning that I can, say, write an article about minimum wages in small towns before the next customer pulls up, at which time I scurry away my laptop and greet him with an open door. A coworker of mine uses the ample dead time to watch the Vikings, the Wild, or the Twins, depending on the season. He sometimes pulls a chair in front of the television with a bag of popcorn off the rack in the front.
When I lived in a bigger city, Sundays at the local liquor store were not slow, especially during football season. I can guarantee that the worker there would barely have time to look at a laptop, let alone write on one. Her day would not include watching sports for an hour at a time, either. Unfortunately for her, there would be no popcorn.
Who thinks that she and I should get paid the same for this job?
Working at a liquor store falls into the category of minimum-wage jobs, I would guess. There’s minimal responsibility, it’s not particularly demanding in a physical or intellectual sense, it requires virtually no skill, and there’s minimal training. In fact, the most important training—having sampled some of the product, known more commonly as “drinking beer”—is both easy and optional.
So, an unskilled job like liquor-store lackey can vary wildly in the amount of work required, depending where one works. Specifically, the same job description may require less actual work in a rural area compared to an urban area. This is probably true for a wide variety of jobs, particularly service positions, especially in retail.
If we accept the intuitive idea that jobs with different amounts of work should pay different wages, the very concept of a “minimum wage” seems to break down. If we set a minimum wage that is appropriate for the type and intensity of work in a small town, that amount will be too low to mean much for people in busier jobs in urban areas. If we set a minimum wage that is appropriate for the type and intensity of work in a busier urban area, businesses in small towns will have to raise prices, which may be especially problematic for consumers in small towns, as the prices are already high to account for low volume of sales. In all, there isn’t a single “minimum wage” that can work the same for both types of workers, and for both types of businesses, and for consumers.
This is a problem, but it is actually the second problem with setting statewide or federal minimum wages that apply uniformly to urban and rural areas. I have outlined elsewhere how minimum-wage laws, many of which are rooted in the idea of a “living wage,” ignore differences between costs of living in rural and urban areas. Because costs of living would seem to be central in determining the exact amount of a living wage, this oversight is a foolish, as well as critical, flaw at levels of government even as small as the county.
So we have two differences across the rural-urban divide: true “living wages” in rural areas are lower than in urban areas because of decreased costs of living, and the amount of work—and therefore the amount of the wage—can also vary depending on population density. Minimum-wage laws would struggle to deal with either of these differences, let alone the combination, making the idea of a minimum wage nearly meaningless, if not counterproductive.
And we’re just getting started.
Lawmakers have realized that labor costs affect businesses differently depending on their size. As mentioned, small businesses often have fewer sales and therefore have to charge more on each sale to maintain profit. An increase in labor cost would lead to further increasing those prices, but the same increase in labor cost at a large business would mean a smaller increase per sale, because there are more sales. Therefore, a uniform increase in the minimum wage would disproportionately increase the prices at smaller companies compared to larger ones, further widening the price gap, and systematically driving smaller companies out of business.
This is a politically un-savvy move, and politicians are loath to make that happen. As a result, states are fond of passing minimum-wage laws that distinguish between different sizes of businesses. In Minnesota, for example, the difference in minimum wages between “small” and “large” businesses is about two dollars per hour. Unfortunately, this complicates our arithmetic across the rural-urban divide. Because of this rule, the small, independent liquor store in the big city has to pay its workers less than, say, a chain liquor store attached to a gas station in a smaller town. This is tough to defend: a worker in the city store works harder than the rural person in the store in the gas station—who cares how big the rest of the company is? Further, the person in the gas station has a lower cost of living than the person at the independent liquor store in the city, but the government says the rural person should make more.
But wait—there’s more! Size-of-business provisions ignore choices within communities. As mentioned in another article, I used to work as a server at a family restaurant in the same mid-sized town. Being a server is also considered a minimum-wage job—indeed, I would often work shifts with high-schoolers, and at a family restaurant there is typically no booze to inflate the size of the checks, meaning that the tips are relatively small. It turns out that there isn’t a whole lot of money serving elderly people eggs and bottomless cups of coffee.
And I took a pay cut to work at the liquor store.
There are reasons for this. Scheduling is easier at the liquor store: instead of talking to the manager at the restaurant a week in advance, I can talk to the “mom” or the “pop” a day or two beforehand. The clientele is often more pleasant in a small-town liquor store: believe it or not, customers at diners can be downright bitchy about how their eggs are done, or how hot their coffee isn’t. And, I don’t come home smelling like grease, and I don’t have to wear a uniform. And, there’s the aforementioned dead time, during which I could write, or watch football. And there’s popcorn.
So, I left one “minimum-wage job” for another “minimum-wage job” that paid even less. I’m starting to wonder what the term “minimum-wage job” means at all.
Let’s start over. I work a “minimum-wage job” at a liquor store. The lawmakers in my state say that that job is worth a certain wage. If I had worked at a different liquor store that was part of a chain, I would have made more money because the lawmakers in my state said that job demanded a higher wage. But if I had worked in an independent liquor store in a city, where I actually would have demanded more money because I was busier, I could have made less money. My lawmakers have nothing to say about this. My lawmakers also have nothing to say about how my first minimum-wage job at the restaurant compares to other minimum-wage jobs in terms of things like preferences for work and working conditions.
I don’t think Minnesota’s lawmakers are stupid or anything. I just think that they can’t write laws that account for all of these scenarios in a state of over five million people from Minneapolis to McIntosh.
Of course, that’s just at the state level. Regardless how stupid our federal lawmakers are or aren’t, they don’t have a chance to account for all of the scenarios in a country of over 300 million people from Washington to Wisconsin.
For those lawmakers, it’s hopeless to try to write these laws, on a few levels. As hopeless as it is to write laws to account for busy-ness of businesses based on population density, or the busy-ness of businesses based on population density coupled with local costs of living, or the busy-ness of businesses based on population density coupled with local costs of living and also coupled with the size of the business, it is even more hopeless to try to account for things like simple preferences between minimum-wage jobs. Case in point: I chose to leave one “minimum-wage job” for another, and for less money, because it was worth it to me, all things considered.
Yet again: literally baffling. No one’s fault—just baffling. In a big system, this level of nuance is too complicated for any group of people to understand, let alone plan for. Let alone write laws that everyone has to follow.
Part of the problem is that there are so many definitions of “minimum.” A West-Coast liberal might define “minimum” as a living wage in Seattle, whatever “living wage” might mean to her. An elderly person in the Midwest might define “minimum” much, much differently. Further, a house-husband who stays at home with a toddler during the week might define “minimum” as a six-pack of craft beer and a chance to get out of the house. He’s not necessarily exploited in such a case: working might be cheaper and more flexible than joining a softball league, and maybe just as fun.
If there’s popcorn, anyway.
It’s as if no degree of planning or analysis can produce a meaningful minimum wage at all. It’s as if all of the types of labor, and different intensities of labor, and different qualities of labor, in different places, done by different people, for different people, with different people, are worth different amounts of money to different people. It’s as if all of these different people are constantly making decisions about how much all of this labor is worth to them, and then acting on those decisions, each “according to their needs,” each “according to their abilities.”
It’s almost like a market or something.
I get it—people want to protect workers from exploitation. But how, how, how can we pretend to do that without acknowledging a basic reality of geography, the rural-urban divide? Or, more accurate, the rural-urban spectrum? Perhaps unfortunately, acknowledging even the basics of that spectrum seems to complicate the issue beyond the possibility of meaningful legislation. And that’s before we talk about choice, or preference, or the subjectivity of “value,” which are also real, and all across that spectrum, as well.
But have hope, Comrades! “The Government” can find the answer! Here’s a less-than-serious look into how enforcing an accurate, meaningful minimum wage might look, as implemented by a government body:
First, start with the locality’s average cost of living. Wait—actually, don’t use the average, because the average is driven upward by many people’s choices for conspicuous consumption. But don’t use the minimum cost of living, either, as that reflects some squalor. Or, at least in my area, it includes some Amish families, and because many American families would somewhat literally starve in an Amish lifestyle, let’s pick a slightly higher value, like…umm…(please wait: conference committee compromising)…the ninth percentile.
Then, set the minimum wage at this ninth percentile for cost of living generally (wait—or ninth percentile for a cost of living at your specific household size…hmm…back to conference committee). Then, factor your business’s “busy-ness coefficient,” which is the percentage of hours spent actually working at work, multiplied by the intensity of hours spent actually working at work as measured by the not-so-famous Henderson Scale (see Appendix HS), which ranges from toll-booth attendant (0) to concrete construction (1.0). Unless, of course, you’re a soccer player, in which case your “busy-ness coefficient” is automatically a quadrillion.
Multiply. Then, divide your newly calculated cost-of-living-and-busy-ness-scale number by 2,000, which is the number of full-time hours worked per year. (Unless, of course, your employees work three twelve-hour shifts as full-time, or if their schedule is rolling, or seasonal, or if vacation is calculated differently…) Anyway, this quotient is your firm’s grossly mandated minimum wage. Then refer to Form 987-F, which features questions that aim to fine-tune the market value of the job in question. That form has questions like this:
#24: Do employees leave your establishment smelling like grease? (If “yes,” add $0.25.)
#25: Does the employee like the smell of grease? (If “yes,” subtract $0.25.)
#32: Do you provide popcorn to your employees? (If “yes,” subtract $0.10.)
#39: Do your employees have to wear a uniform? (If “yes,” add $0.50.)
#40: Is that uniform polyester, or does it include a decorative hat? (If “yes,” add $2.00.)
#41: Both? (If “yes,” immediately dial 1-800-FOR-OSHA.)
The form is 987-F-ing long.
Or, the employee can fast-track to Form 987-EZ, which exempts all parties from a minimum wage entirely, and which includes only a simple statement, agreed to under oath, with penalty of perjury: “I hereby sell my labor for an amount agreed upon by my employer and me, and I do not feel exploited in doing so. Just like, you know, I would sell anything else. And because, you know, we’re adults, and stuff.” (Form 987-EZ is not applicable if you work for a mob boss; for definitions, see Appendix DED.)
You see the point. Maybe a meaningful minimum wage is a lost cause. Not because “The Government” can’t figure it out, but because no one can. Or because only everyone can, which is kind of the same thing.
Or, maybe the minimum wage can be improved. How? I’m not sure. Maybe I’ll think about it at work next week. I’ll have time.
Maybe I’ll even have some popcorn.
P. A. Jensen is editor of RuralityCheck.com.
He lives in northern Minnesota with his wife and son.