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Off The Wall: Minimum Wage

10957729_938376616172482_8725623392251984294_nHi Mike,

The federal minimum wage is $7.25 and hour. A lot of people think it should be raised to $10.10. Seattle now pays $15 an hour, and the The Freedom Socialist Party is demanding a $20 living wage for every working person. What do you think about the minimum wage? How much do you think a Big Mac will cost if McDonald’s had to pay all their employees $20 an hour?

Darrell Paul

Hi Darrell

Back in 1979, I was working as an usher for United Artists at a multiplex in Baltimore. The minimum wage was $2.90, and I earned every penny.

When I wasn’t tearing tickets in half and stopping kids from theater hopping, I was cleaning out the bathrooms, emptying the trash, and scrapping dubious substances off the theater floor with a putty knife. I wore a silly outfit and smiled unnaturally, usually for the entirety of my shift. I worked 18 hours my first week, mostly after school, and earned $62.20. Before taxes. But I was also learning the importance of “soft skills.” I learned to show up on time and tuck my shirt in. I embraced the many virtues of proper hygiene. Most of all, I learned how to take shit from the public, and suck up to my boss.

After three months, I got a raise, and wound up behind the concession stand. Once it was determined I wasn’t a thief, I was promoted to cashier. Three months later, I got another raise. Eventually, they taught me how to operate a projector, which was the job I wanted in the first place.

The films would arrive from Hollywood in giant boxes, thin and square, like the top of a card table, but heavy. I’d open each one with care, and place each spool on a separate platter. Then, I’d thread them into the giant projector, looping the leader through 22 separate gates, careful to touch only the sides. Raging Bull, Airplane, The Shining, Caddyshack, The Elephant Man – I saw them all from the shadowy comfort of the projection booth, and collected $10 an hour for my trouble. Eventually, I was offered an assistant manager position, which I declined. I wasn’t management material then, anymore than I am now. But I had a plan. I was going to be in the movies. Or, God forbid, on television.

I thought about all this last month when I saw “Boyhood” at a theater in San Francisco. I bought the tickets from a machine that took my credit card and spit out a piece of paper with a bar code on it. I walked inside, and fed the paper into another machine, which beeped twice, welcomed me in mechanical voice, and lowered a steel bar that let me into the lobby. No usher, no cashier. I found the concession stand and bought a bushel of popcorn from another machine, and a gallon of Diet Coke that I poured myself. On the way out, I saw an actual employee, who turned out to be the manager. I asked him how much a projectionist was making these days, and he just laughed.
“There’s no such position,” he said. I just put the film in the slot myself and press a button. Easy breezy.”

To answer your question Darrell, I’m worried. From the business owners I’ve talked to, it seems clear that companies are responding to rising labor costs by embracing automation faster than ever. That’s eliminating thousands of low-paying, unskilled, entry level positions. What will that mean for those people trying to get started in the workforce? My job as an usher was the first rung on a long ladder of work that lead me to where I am today. But what if that rung wasn’t there? If the minimum wage in 1979 had been suddenly raised from $2.90 to $10 an hour, thousands of people would have applied for the same job. What chance would I have had, being seventeen years old with pimples and a big adams apple?

One night, thirty-six years ago, during the midnight showing of The Rocky Horror Picture Show, I sat in the projection booth and read a short story by Ray Bradbury called “A Sound of Thunder.” It was about a guy who traveled back in time to look at dinosaurs, but against strict orders, ventured off the observation platform and accidentally stepped on a butterfly. When he returned to the present, everything in the world had changed. “The Butterfly Effect” is now an expression that describes a single event that leads to a series of unanticipated outcomes, resulting in a profoundly unintended consequence. (Ironically, it’s also a movie with Ashton Kutcher, which I had to pay to see 30 years later.)

Anyway, I’m not an economist or a sociologist, but I’m pretty sure a $20 minimum wage would affect a lot more than the cost of a Big Mac. Beyond the elimination of many entry-level jobs, consider the effect on the skills gap. According to the BLS, they’re about three million available positions that companies are trying to fill right now. Very few of those jobs require a four-year degree, but nearly all require specific training. And all pay more than the current minimum wage. If we want a skilled workforce, (and believe me, we do,) should we really be demanding $20 an hour for unskilled labor?

Last year, I narrated a commercial about US manufacturing, paid for by Walmart. It started a shitstorm, and cost me many thousands virtual friends. Among the aggrieved, was a labor organization called Jobs With Justice. They wanted me to know just how unfairly Walmart was treating it’s employees. So they had their members send my foundation over 8,000 form letters, asking me to meet with unhappy Walmart workers, and join them in their fight against “bad jobs.”

While I’m sympathetic to employees who want to be paid fairly, I prefer to help on an individual basis. I’m also skeptical that a modest pay increase will make an unskilled worker less reliant upon an employer whom they affirmatively resent. I explained this to Jobs With Justice in an open letter, and invited anyone who felt mistreated to explore the many training opportunities and scholarships available through mikeroweWORKS. I further explained that I couldn’t couldn’t join them in their fight against “bad jobs,” because frankly, I don’t believe there is such a thing. My exact words were, “Some jobs pay better, some jobs smell better, and some jobs have no business being treated like careers. But work is never the enemy, regardless of the wage. Because somewhere between the job and the paycheck, there’s still a thing called opportunity, and that’s what people need to pursue.”

People are always surprised to learn that many of the subjects on Dirty Jobs were millionaires – entrepreneurs who crawled through a river of crap, prospered, and created jobs for others along the way. Men and women who started with nothing and built a going concern out of the dirt. I was talking last week with my old friend Richard, who owns a small but prosperous construction company in California. Richard still hangs drywall and sheet rock with his aging crew because he can’t find enough young people who want to learn the construction trades. Today, he’ll pay $40 an hour for a reliable welder, but more often than not, he can’t find one. Whenever I talk to Richard, and consider the number of millennials within 50 square miles of his office stocking shelves or slinging hash for the minimum wage, I can only shake my head.

Point is Darrell, if you fix the wage of a worker, or freeze the price of a thing, you’re probably gonna step on a few butterflies. Doesn’t matter how well-intended the policy – the true cost a $20 minimum wage, has less to do with the price of a Big Mac, and more to do with a sound of thunder. Frankly, it scares the hell out of me.


PS I looked into the Freedom Socialist Party and their demand for a universal, $20 an hour living wage. Interesting. You’re right – they’re serious. But not long after they announced their position, they made the interesting decision to advertise for a web designer….at $13 an hour. Make of that what you will.

Mike’s Facebook Page

  • fifthgenmick

    Mike, thanks for the great letter about the minimum wage. I am a rehabilitation counselor. I work with folks with disabilities to get them jobs. The amount of folks that actually work for minimum wage is very low, I think about 1%. I started at a gas station for $1.00/hr which was actually less that the min. wage at the time which was $1.60/hr. I learned a great deal at that job. I learned how to develop a good work ethic which has lasted me all of my life. I learned how to work with other and how to help customers. I learned how to get promotions, and I had money in my pocket. Most folks that get entry level work at minimum wage do not have the transferable skills to make what skilled workers make. This takes time. Why should those who do not have the necessary skills get paid what took me several years to learn ? The potential pitfalls far outweigh any possible benefits that raising the minimum wage offers.

  • mx

    Here’s the funny thing about your 1979 wage. Let’s pop over to the DOL’s CPI calculator and punch in $2.90 in 1979. What is that in 2014 dollars? Why it’s $9.46. That number looks an awful lot like $10 to me. So in fact, the minimum wage in 1979 was roughly equivalent to today’s $10 all along. Yet Rowe got the job anyway.

    The problem isn’t the amount of the minimum wage. Rather, the problem is that minimum wage (or near-minimum wage) work has become the norm not just for high school students working after school at the movie theater, but for adult workers who might spend years earning it while trying to support a family with little realistic possibility for advancement in their careers.

    • JW

      Maybe these adults should think about investing in themselves.

      I worked lots and lots of minimum wage jobs in my youth. Some, I quit, others I was canned from for my big, stupid mouth and poor impulse control. I eventually put myself through college, borrowing mostly, but paying it off as fast as possible. I managed to score a full ride for a year, which helped a good bit.

      But, it took me almost 7 years, working nearly full-time and taking a 9 credit load every semester and summer. I then went out and got another Bachelors in a different career path, borrowing again. It no doubt helped me to get a job in that field, but I took a pay cut to go from a grocery store to an office. Money was very tight for that first year.

      I then changed careers again and went back and got my Masters, some borrowed, some paid for by my employer. That led to a much more lucrative salary than before. I’m still in that field, making many times more than that first office job, raising a family, with my first about to go off to college.

      All of this took about 16 years, from start to finish, with some time off between degrees.

      If you want something better for yourself and your family, then go get it. No one is going to give it to you.

    • jdr0317

      mx, you make that “point” without acknowledging the downward pressure on wages of low skilled workers as a result of automation and globalization. Why in the world would a company want to spend $20/hr (before other labor costs) on a few extra front end workers at a supermarket (~ $300/day for a 15 hour / day supermarket), when they can spend a few grand up front for a self-checkout machine? This wasn’t competition for teenagers back when Mike Rowe was seeking out these jobs.

      Arguing that the minimum wage is “wrong” because it’s historically lower than previously ignores a huge aspect of the equation: employer demand. Skilled tradesmen are demanded, hence Mike’s friend Richard is willing to pay a welder $40/hr with just a vocational training (which could be attained by around age 18, not too shabby).

      In the more glorified white-collar world, look what software engineers and data scientists are earning in Boston: http://www.indeed.com/salary?q1=software+engineer&l1=Boston%2C+MA&q2=Data+Scientist&l2=Boston%2C+MA&tm=1 .

      The money and opportunities for a comfortable middle to upper middle class life are still all there. Executive fiat and make-work jobs aren’t the path to it, though. It’s good that guys like Mike Rowe are around to actually not lie to kids.

    • Nero

      You are going to have a loss of employment and employers are going to replace labor with capital (machines) when you raise the minimum wage. That is impossible to avoid.

    • Steve Gregg

      If you are still earning the min wage years after you have entered the working world, there is probably something wrong with you.

    • John

      You missed the point of the article, which was that any job is better than no job and that government intervention regardless of its good intentions costs more than the increase in wages. The fact is that most jobs aren’t worth even the mandated minimum wage and businesses forced to pay more than the job returns in profits will seek to lower the cost of labor by replacing a person with a machine.

    • http://theobamatimeline.com/ colony14author

      The adult who has spent years earning only the minimum wage should look in a mirror to find out who is responsible for his problems.

      • HoyesMiGente

        Really? Because equal access and education are so universal? And the law of economics means that some people HAVE to work these jobs you wouldn’t be caught dead doing. So. If all work is “good” work why so much derision for low paid unskilled workers? Why can’t they be paid a living wage without offending your self righteous sensibilities? The woeld is not an upwardly mobile paradise for MOST people. And Wal Mart and these other copies make obscene and unfair profits. We should all aspire to be like the outright sociopathic crooks on wall street (and their lower caste minions, financial services) who were and are responsible for an economic shitstorm that still hasn’t resolved? Yet–they get more breaks than a man or woman who works for minimum wage at wal-hell? For shame. Barbara Ehrenreich. Nickeled and Dimed.

  • Mark Mahorney

    Hi Mike, I really appreciate your common sense. I have a degree in economics and wrote for a living about that for some years, for the past eight years I’ve been artisan and craftsman, I make furniture and sculpt wood. I have found it difficult to grow my business because I can’t hire high school kids to do the more menial work because everything I do is deemed hazardous so I can only hire 18 and over, today any power tool is dangerous, under 18 can’t even use a full motor or palm sander unless it’s through an approved school program, and today over 18 year olds expect a substantial wage to do clean up work. If I could hire high schoolers cheaply after school and weekends I could pass on many valuable skills and get many more menial tasks done affordably enough to grow my business and create more skilled better paying positions.
    Mark Mahorney

  • Mark Mahorney

    That’s a good point about the CPI adjustment, but keep in mind it’s not a perfect calculation of price impacts on consumers, for example tuition has far outpaced the avg rate of inflation, but many basic household good are now much cheaper adjusted, for example cheap bikes were about a hundred bucks 30 years ago and pretty close to the same today, coffee pots and microwaves cheaper.

  • Steve Gregg

    Twenty bucks an hour is the equivalent to $40,000 per year, which is the normal starting salary for a college graduate in liberal arts, many of whom are unemployed, sitting on Mom’s couch, watching cartoons and eating Cheetos. Why would any employer hire an unskilled worker for $20/hour when he could hire a college grad? Raising the min wage to $20/hour prices unskilled labor out of the market. The irony of the min wage is that it harms precisely the people it is intended to help.

    • Wareagle82

      “The irony of the min wage is that it harms precisely the people it is intended to help.”

      This is the case virtually across the board with progressive ideas. Public housing is the most poorly-maintained housing going. Govt has torn down more units than it has put up. Welfare develops dependency by rewarding what most of us would consider bad decision-making. And so forth. The left always talks about intentions, never about results.

    • http://theobamatimeline.com/ colony14author

      Don’t exaggerate. They’re not all eating Cheetos. Some are eating Fritos.

  • Pfruit

    What is the point of working a 40 hour work week if the money you make can’t support you and your family? I think this is the crux of the minimum wage argument.

    Some companies try to squeeze their profit from their workforce, and their competition must enact similar policies if they are to survive. Regulations like minimum wage laws ensure that workers are treated fairly, while ensuring that all companies play by the same rules.

    • Steve Gregg

      Companies do not set the price for labor. The market does. A company can hire people for less than market price because few will accept it and those who do, will soon leave for better money. A min wage does not ensure fair treatment. It just prohibits anyone from working whose skills are worth less than the min wage. We should do away with the min wage to eliminate that barrier to entry into the job market. Once you get a job and begin learning skills, you become worth more to your employer and others. A min wage halts the improvement of human capital.

    • Randy

      Back when I was in high school (and summer jobs during college) 40 years ago, I never knew anyone who saw a minimum wage job as what they would be doing all their life. It was intended as an entry level or learning job. Going to college (and not for useless degrees like gender studies) or to a trade school was the norm. It was up to the INDIVIDUAL to make themselves valuable to an employer. There are 3 problems now as I see it: 1) an Orwellian government that seeks to strangle through regulations any entrepreneur or business who wants to give someone a chance learn a skill or just even to grow their business, 2) a societal mindset that drums into an individual they must go to college to be successful (with their plethora of useless real-world degrees) rather than not encouraging going to trade schools as an excellent option to getting a well-paying job/career and, 3) the lazy individuals that are being spawned by our politically correct educational system that expect to be given a “living wage” for no discernible skills.

    • Wareagle82

      when your questions starts with “what is the point of working” then you are already behind. Why do you think that an employer’s role is to put you into luxury? Jobs exist because there is work to be done. The value of those jobs is based largely on the number of people who can do them, as Mike’s own example lays out. Lots of folks can haul trash, a smaller number can be trusted at the cash register, even fewer are management material. The first principle of economic is scarcity. And what regulations like minimum wage do is 1) reduce the odds of low-skilled people getting jobs and the OTJ they need and 2) keep folks like you focused on the wrong thing.

    • Kentucky

      What is the point of having a family if you can’t support them?

  • DefendUSA

    I am 50. I have a college degree and stayed home for 19 years to raise my four children. When my spouse lost his job, I could not make enough money to support our family even though I had my foot in the working world. What I am angry about is that I WANTED to work, no matter how much I would be paid and I could not get a job. I was so tired of hearing I was “overqualified” because I had a college degree. What is wrong with people who don’t want people who are simply willing to do whatever it takes to make money? This is what is wrong with those doing the hiring. They look at the paper and not what people are willing to learn. The Army trained me to be a phlebotomist/lab tech. Unless I have certs, I can’t get a freaking job doing that!! No one will do the logical thing and let me test out with knowledge and experience. It’s ridiculous. This is what’s wrong!!!! College doesn’t matter, but work ethic and OJT should!!!

    • http://theobamatimeline.com/ colony14author

      Good points all. The “establishment’s” rules often work against people who are willing to work hard. Some rules are simply absurd. Why (in some states) does one need more training to get a beautician’s license than to become a paramedic? My hair will grow back after a lousy haircut, but an untrained paramedic might kill me. More often than not, the absurd rules are passed by legislators in exchange for campaign funds (bribes) from businesses trying to reduce competition.

      • Ed L

        In what state do you require more training to be a beautician than a paramedic? Please be specific.

        • http://theobamatimeline.com/ colony14author

          I did not keep the link for that particular article, but here is one that is similar:
          There are all kinds of crazy rules like that which do nothing but discourage people from starting businesses, particularly low-income people who cannot afford to attend the schools or pay the licensing fees. I don’t care how many hours training my barber has if he/she cuts my hair the way I like it.

          • Ed L

            Just look at the comments to your own link to see that the premise is flawed – they only look at hours spent at the police academy and don’t count the hours needed to get the prerequisite degree necessary to attend the academy (bachelors – 4 years of schooling), or the additional hours of continuing training required to maintain your police certification. It’s just bad PR, not a legitimate gripe.

            There is a problem with government regulation being more onerous on everyday individuals and small businesses than on the wealthy and corporate concerns, but that is a direct result of the unequal amount of power that corporate and wealthy interests exert over government. Matt Taibi’s “The Great Divide” lays this out extremely well.

            But this is a problem with wealth and income disparity and not a problem of “evil government.” We do need to take back the government from the corporate interests that run things currently. My problem is with those on the right that want to give even more power to corporate interests. You don’t put out a fire by pouring gasoline on it.

    • Marla

      Suggestion: When applying for a job that does not require a college degree, do not put that information on your resume. Make your resume specific to the job you are applying for. They don’t have to know you are “overqualified.”

  • bigfire

    As Mike’s experience in the modern theater demonstrates, the true minimum wage is $0. If it’s not economical for a business to hire any particular worker, they will not hire that worker.

    • Inigo Walker Howlett

      Exactly. Sucking up to business does not create jobs, demand creates jobs. If there is no demand, jobs vanish. If demand is stable and jobs are scarce, you get wealthy individuals telling rubes that if you give the wealthy more tax breaks, they’ll somehow get jobs.

  • http://theobamatimeline.com/ colony14author

    I am still waiting for a leftist to explain why being unemployed at $10.10 per hour is better than being employed at $7.25 per hour.

  • http://theobamatimeline.com/ colony14author

    I started working at age 14 and was paid much less than the minimum wage. By the time I retired I was earning about 90 times what I earned 43 years earlier. That came from hard work, learning new skills, proving to the boss that my skills and talents were worth a substantial but fair amount, and (most of all) not whining.

    Not whining. People should try it. It’s amazing how well that helps one’s career advance.

    • JohnYuma

      I got the best promotion of my career simply because I was the only one in the department who never complained…

      • http://theobamatimeline.com/ colony14author

        I believe it!

  • Goodbuddy

    In 1950 at age 13 I began working on Saturdays in a neighborhood grocery store from 7:30 until 10:00 PM for $1.50 — per day! The following summer I worked 60 hours per week for $9:00 total. The next summer I got a raise to $14.00 per week and the third summer I was making a fabulous $21.00 per week.

    As a high school senior I worked Saturdays from 7:00 AM until 10:00 PM for $5.00. That was after football games the night before. For away games the 7 AM sometimes came just 5 hours after bedtime.The year after high school graduation I worked at a dry cleaners for $25.00 per week which including driving the delivery truck (yes, at one time dry cleaners and laundries use did pick up and deliver).

    In 1962 — as an honor graduate in Chemical Engineering — I went to work for one of the world’s largest petroleum and petrochemical corporations for $3.50 per hour. I did get a better offer at $3.90 per hour but the location was considerably less desirable.

  • http://theobamatimeline.com/ colony14author

    I once worked for a company with about 1,000 employees. New hires would often ask my advice: “How can I get ahead when 1,000 people are competing for the same promotions?” My answer was always: “You don’t have 1,000 people competing with you. You have about 100 people competing with you. About 200 are counting the days until they retire and don;t give a darn. Another 600 do as little as possible, just the bare minimum to get by. Another 100 are total screw-ups and somehow manage to avoid being fired. That leaves about 100 who work hard and pull their weight. Of those 100, about 15 are excelling and giving 110%. Those are the 15 you are competing with. Act like those 15 and you’ll be fine and have a career, rather than a job.”

  • http://theobamatimeline.com/ colony14author

    When my brother interviews job applicants, he always keeps a purple pen on his desk. If an applicant asks, “Can I borrow that pen? I forgot to bring one,” he of course lets him/her use the purple pen.

    After a week or two of interviewing job applicants, two piles are created: one pile with applications filled out in purple ink, and one pile with all the other applications. No one in the purple pile ever gets hired.

  • http://www.electricianapprenticehq.com eapprenticehq

    When I left the military back in 2006 I had to rebuild myself professionally. Going from a stable job with a good income, to starting over at the bottom again was rough.

    Fortunately for me I didn’t have to work in a minimum wage job. I had already done “those” types of jobs as a teenager in high school. Instead, I joined a 5 year electrical apprenticeship that would teach me the necessary skills to be successful in the electrical industry.

    My first few months as an apprentice I thought to myself, “What the hell am I doing here? This electrician stuff is hard work.” The guys on my crew what they’re doing while I struggled with trying not to break things or heaven forbid, be wasteful. But I got better with time. I learned through hands-on and working through the tough academics in class made me a good apprentice.

    After getting a multitude of pay raises in past 9 years, plus obtaining my electrical license, I’m married, I’ve paid off both of my cars, have zero debt (besides my mortgage), and feed and clothe three girls. Outnumbered?

    But right now I’m 3 months away from earning my master electrician’s license, which will allow me to open my own company. Joining a trade and skipping the minimum wage line (unless you’re a teenager) is the best way to go! And I’m only 32.

    If you’re interested in joining the electrical trade, check out:


  • Kimber Shooter

    The first of April has come and gone, and the Seattle minimum wage increase has started. Depending on the size of the company, to get to the full $15/hr may take up to 2020. But, let me give you an example of just ONE company and what they did.
    Now, this increase affects ALL businesses inside of Seattle, except government businesses. So, the students at UW aren’t getting an increase, if they work on campus. However, if you go outside of the city limits, you fall back to Washington State’s minimum wage of $9.47/hr
    One of the more famous restaurants in Seattle is the Ivar’s Clam Chowder chain. Ivars decided to go flat out, and just move to the $15/hr minimum for all of their employees, waitstaff, cook, busboy, etc. Sounds good, right?
    Well, not really. Here’s why.
    1. In ALL of their Seattle stores, Ivars has increased the price on their menu by 20.6%! So, the menu just got a LOT more expensive. Ivar restaurants NOT in Seattle saw no raise in employee wages, nor did they see a menu price increase.
    2. Ivars in Seattle now suggests that since the price increase and everyone is getting the same pay, NO TIPPING IS NECESSARY. Well, I don’t know about you, but I’ve found if you don’t tip waitstaff, they tend not to provide as good a service. In fact, they’ve come out and said that before the first of April, good waitstaff, with tips, was earning about $27 per hour. So, the waitstaff, if people do not tip, and because people do not think about the implications of that, have effectively taken an almost 45% pay CUT!
    3. Ivars has said it will implement ‘Revenue Sharing’ with it’s employees, with the ‘most valuable’ getting larger cuts of the revenue. So, it IS possible that a top flight wait person may make a couple of extra hundred dollars per week, or however the revenue sharing is set up to pay out, but where does that leave the busboy who simply is doing his (or her) job with no real way to show ‘superior work ethic?’

    One local Subway shop has increased costs across the board by 4%. Others are tacking on a Seattle Minimum Wage Increase Surcharge.

    I only can wonder what the Unemployment statistics for Seattle will be three months down the road.