Myths of Minimum Wage Increases & How Tax Payers Pay the Price
In a perfect world, no one’s journey would end at a minimum-wage job. But for many people, breaking free from poverty and low wages feels nearly impossible, especially without the right connections or opportunities. Before we judge a worker at Taco Bell or any other low-wage job, we should think about the role we play as consumers and how our demands keep this system running.
When I was 26 years old, I moved to a new city and set out to find a meaningful job. Like many others, I avoided fast food because of the stigma. People often say it’s “just for teenagers,” and I didn’t want to be stuck in a part-time job with no benefits, forcing taxpayers to cover things like healthcare. Instead, I aimed higher, but many of the jobs I wanted required a college degree — a luxury I couldn’t afford at the time.
The “respectable adults” in my life often said college wasn’t worth it and encouraged me to try a trade. So, I worked as a night-shift security guard while attending vocational school during the day. After 18 months, I became a first responder. The COVID-19 pandemic quickly followed, and I learned firsthand how challenging and underappreciated that work could be. Despite being hailed as heroes, first responders like me were paid just a little more than minimum wage to face death, destruction, and trauma.
When I expressed my frustration, people told me it was my fault for not choosing a higher-paying career — as if they’d never need to call 911. That’s when I realized the truth: the goalposts for success were always moving, and the system wasn’t designed to let most people win.
Now, on the cusp of my 30s, nearing graduation with a degree, I find myself leaving the job that was my passion, earning a wage that while better, could not sustain a family. The moving goalposts of societal expectations and the unattainable standards set by the “respectable adults” are palpable.
Jobs like fast food, retail, and first responders are essential to society, yet they’re often undervalued. Many people think fast-food jobs are just for teenagers, but if that were true, you’d never be able to grab a burger during school hours. The reality is, that these jobs are filled by adults — many of them supporting families — because higher-paying roles are often out of reach without a degree or specialized training.
The cost of obtaining a college degree has skyrocketed, leaving many unable to afford higher education. Trade schools and vocational programs offer alternatives, but even then, jobs in these fields don’t always pay enough to support a family comfortably. This is especially true for first responders, who endure dangerous and traumatic situations for wages that barely cover their needs.
We’ve been told that hard work leads to success, but for many, that isn’t the case. Fast-food workers, for example, are expected to keep society running but are often paid so little they can’t afford necessities. Critics argue that raising wages for these workers will hurt the economy, but this simply isn’t true.
Take the case of Pizza Hut franchises in California. Some operators claimed they’d have to lay off drivers because of minimum wage increases, but these same franchises reported average sales of over $1 million in 2022. The issue isn’t that businesses can’t afford to pay workers more — it’s that profits are prioritized over fair wages.
At the same time, CEOs have seen their pay skyrocket. Since 1978, CEO compensation has increased by over 1,200%, while typical worker pay has grown by just 15%. The higher prices we’re paying for goods and services aren’t going to workers — they’re going to pad CEOs’ already massive salaries.
As consumers, we often overlook our role in this system. We expect fast, cheap services without realizing that low wages for workers are subsidized by our tax dollars through programs like Medicaid and food stamps. This means that while we save money on a meal, we’re paying the difference through taxes. Meanwhile, those same workers can’t afford the products they help create.
Corporate profits drove 53% of inflation during the second and third quarters of 2023 and more than one-third since the start of the pandemic. CEOs are granted massive compensation packages by corporate boards because of their bargaining power, not because of their skills. CEOs’ exorbitant payouts have far outpaced the pay of typical workers over decades. 1,209.2% since 1978 compared with a 15.3% rise in typical workers’ pay. The higher prices we’re paying aren’t to pay the workers it’s to pay the CEOs more.
Consider companies like PG&E and Walmart. In 2023, PG&E reported a $2.24 billion profit, a 24% increase from the previous year, while consumers faced rising electric bills. Similarly, Walmart made $155 billion in profit. These corporations raise prices to benefit their CEOs and shareholders, yet we often blame minimum-wage workers for the increases.
PG&E bills have gone up for the same reason the price of everything has gone up. Corporations are raising the prices to pay their CEOs more. PG&E is a corporation. They have shareholders, and those shareholders expect to see returns. We blame the government for electricity going up, at the same time that we figure that the owners of Walmart and all those other big brands just earned that money for their special skills and we blame the prices going up on the minimum wage worker. We never asked PG&E to pay the lineman less so that our electricity rate would go down. We have not told people to start “living within their means” and don’t run the heater or TV if they can’t afford it, or to just wear a sweater. But we tell them to do that with all other aspects when they’re forced to overpay for goods and services. With PG&E, we instinctively know that the prices have gone up to pay corporate heads, but we don’t seem to apply that logic to any other company…
This insidious lie that minimum wage is merely a “high school wage” perpetuates acceptance, encouraging individuals to work tirelessly for insufficient compensation. Our parents’ generation may criticize the perceived lack of productivity, but they played a role in shaping an environment where advancement is nearly impossible.
We need policies that limit CEOs’ ability to collude with corporate boards to extract excessive compensation are needed to prevent the U.S. from becoming a winner-take-all society. Linking executive compensation to worker pay could help reduce wage gaps, Higher tax rates on extreme incomes could discourage excessive CEO pay and provide funding for public services, Ensuring fair wages and benefits for all workers, regardless of their job, Making college and vocational training more affordable so that everyone has a chance to succeed.
People have begun to believe the misinformation perpetuated by profit-driven entities who want to pay their workers as little as possible. When we look at the true reasons for the opposition to minimum wage increases, it becomes apparent that anti-wage campaigns have been shaped by misinformation and corporate interests. The idea that increasing wages for one group takes away from others is a myth created to divide us. The truth is, that fair pay for all workers benefits the entire economy. When workers are paid a living wage, they have more money to spend, which boosts businesses and creates jobs.
Every role in our workforce is important, and everyone deserves fair compensation and respect for their contributions. If we want a just and thriving economy, we must start by paying people like we mean it.
