Sheryl Sandberg wrote a heartfelt mother’s day post on Facebook, detailing the things she would like to see to help mothers in the workforce. As a single mother, Sandberg certainly understands some the challenges working mothers face. But, what she doesn’t understand is basic economics.
She writes:
To start, it’s long past time to raise the federal minimum wage. Two-thirds of minimum wage workers are women. Raising the wage would reduce pay inequality and help millions of families living in or near poverty.
It sounds good but raising the federal minimum wage means you raise the cost of everything. Which strongly impacts the additional point she makes (2 paragraphs down):
And we need affordable child care. Child care for two children exceeds the median annual rent in all 50 states. How are parents supposed to work if they don’t have a safe and affordable place to leave their kids?
Indeed. Child care is a huge problem for working moms and dads. It’s terribly expensive. Do you know what will make it more expensive? Raising the minimum wage.
To keep reading, click here: What Sheryl Sandberg Doesn’t Understand about Minimum Wage and Childcare
I’m not sure your math checks out here. Yes, raising the minimum wage will increase the wages of childcare workers, which will in turn increase the costs of child care. But if you were a parent making minimum wage and sending your child to childcare, the increased childcare costs won’t match the increase in your own pay.
Even for infants with a 1 adult per 4 children, that still means each parent is only on the hook for 1/4 of the pay increase per worker. If the federal minimum wage were to jump overnight from $7.25 to $15.00, that would mean that each parent would be on the hook for $1.93/hour in increased costs but making $7.75/hour more in income. I definitely think it balances out.
It’s not just childcare that will increase though. Everything will increase with a minimum wage increase. You’ll be hit on all sides, and may lose your job.
Two problems with the math – first, it’s not an hour for hour match. If you work eight hours, you need to pay for about ten hours of day care to allow for pick up and drop off time.
Secondly, I highly doubt an adult making minimum wage can afford the full cost of full time daycare (I know I wouldn’t have). Someone else is paying part or most of the cost, either taxpayers or private donations, neither of which are bottomless pits of cash. In theory, your math works, sort of, but since there are few, if any instances of minimum wage adults paying full price for day care, the justification that raising the minimum wage will help is moot.
Most Americans do not oppose the minor price increases that might result from raising the minimum wage. After all, right now there are full-time minimum wage workers who actually qualify for welfare, food stamps, etc. In other words, the American taxpayers are providing so-called corporate welfare to businesses — some of them extremely-profitable nationwide chains — to make up for the fact that the businesses are not paying their employees a living wage.
+1 to this! As someone earning significantly over minimum wage, I have no problems redistributing wealth.
I think Ms. Sandberg probably has a good handle on the economics – which are a bit more mixed than the dire situation you’re outlining above. (https://journalistsresource.org/studies/economics/inequality/the-effects-of-raising-the-minimum-wage ) My read on her post was that she was advocating public investment in child care (like most of the developed world) to make it affordable for working families, as well as paid family leave (again, like most of the developed world) to push out the timeline on when families have to put their very small babies into full time care.
A regulated minimum wage would be unnecessary if employees were always fairly compensated for their labor by employers. There are many sources of data to help employers develop fair wage ranges including standard of living costs by area.
Suzanne’s math nothwithstanding, the cost of daycare IS insane. I pay $11,000 per year per child. That’s more per year than the annual full-time tuition at our local State University! There is something seriously wrong there.
And yes, plenty of the parents there come in wearing uniforms for places that barely pay more than minimum wage so they are likely getting their care subsidized. Something’s gotta give!
Well then, let’s just make there be no minimum wage. It would make everything cheaper! Except it won’t. What I want to see change is the culture that it’s ok for the WalMart CEO to make millions (a quick search says $21M) and his workers need to be on foodstamps. We can afford to give those workers a better wage but it would involve not having the 1% hold all the wealth. We need to start somewhere and maybe we should start by giving those workers a raise to show they are valued. It’s hard to feel you are a throwaway by our country yet that is how we treat them.
So much yes.
I think a good solution to the concerns of a minimum wage hike driving up the costs of other goods and services is instead of making it an absolute dollar amount, have a “relative” minimum/maximum wage where the ratio of executives’ pay to that of lower workers must be kept under a certain amount. This solves both the Left’s concern of unfair wages and the Right’s of a hike in the minimum wage leading to inflation.