BuzzFeed News reports that the minimum wage just must rise. Its evidence is a case study of one particular lady in South Carolina.
The problem is that the numbers in the story simply do not add up. Further, the actual thing complained about is not the hourly wage, but the number of hours of work possible to gain a wage, which is an entirely different problem.
It’s not unusual for the sort of arts graduates who become journalists to get confused by numbers but this just means that those trying it need to be a great deal more careful than BuzzFeed News is here.
So, the reason that the minimum wage should be higher is that Tara Thompson, the exemplar here, can’t live well on what she’s earning. Except, well, that’s not quite true. She left McDonald’s, on $9.50 an hour and 40 hours a week, to go to Dollar General on $11.75 an hour. But the problem is that she’s not gaining the minimum 32 hours she was expecting. It’s the hours that blow a hole in her budget.
That’s a problem, certainly, but the problem isn’t the minimum wage rate, it’s the hours. So, why is it so difficult to gain full-time hours? Obamacare, that’s why. The cost of health care insurance looms large at this low end of the labor market. Anyone who works “full time” has to be provided with it under the Affordable Care Act. So, employers find it cheaper to hire two part-time rather than one full. That’s why full-time hours are so difficult to find. This isn’t a problem solved by raising the hourly pay rate.
There are also other holes in the story, numerical ones. A monthly car payment of $800 is mentioned – that translates, under a normal arrangement, to a $40,000 auto. That’s pretty high for a grocery store clerk. Gas for the work commute is some $400 a month. Taking gas at $4 a gallon, that’s 100 gallons a month, say 3,000 miles of driving at 30 mpg (which is lower than the average mpg of all U.S. cars). In a 20-day working month, that’s 150 miles a day, or she lives 75 miles from work. We’re seriously supposed to think that a grocery store clerk is driving 75 miles each way to work each day?
One more point. America does have a welfare system and it does kick in at these sorts of levels of income. There may or may not be food stamps – depends perhaps on the number of children – and the Earned Income Tax Credit will be in play too. Just at a minimum of extra income there.
BuzzFeed News ranks No. 115 in the listing of U.S. news and media publishers (this is to distinguish it from BuzzFeed itself). It gains near 17 million visits a month from that position. There really needs to be more careful about the facts associated with such prominence.
The final lines of the story tell us that Tara has now gained a position at a Mercedes-Benz factory. 40 hours a week on $14. It’s the hours that make the difference there, not the idea that the minimum wage should be higher – for if the solution is more hours at $14 then what need for the $15 minimum that the article tries to push? It’s the hours that matter, vastly more than the hourly wage.
After all, the headline is “This Is What It’s Like To Live On Less Than $15 An Hour” and that’s not the problem described at all, is it? What’s actually laid out for us is how hard it is to live on part-time, instead of full-time, work. Something which has a very different solution. As we see – it’s the 40 hours a week that solves the problem, not $15 an hour. As the problem was solved at McDonald’s on 40 hours a week at the start.