1. ON THE MINIMUM WAGE: BUSINESS LEADS,
POLITICIANS FOLLOW
Governor Andrew Cuomo is to be commended for his Op-Ed piece in the New
York Times on May 7, 2015 (“Fast-Food Workers Deserve a Raise”), but as shown
on the May 14, 2015 episode of PBS’ The News Hour, big businesses - at least
some of them - are out in front on the issue of raising the minimum wage. On
January 16, 2015, Aetna Insurance raised the minimum wage for its employees to
$16 an hour; in April, Wal-Mart raised the minimum wage for its hourly employees
to $9 per hour; last year, Gap Inc. raised its minimum hourly pay to $9 and said it
would raise it to $10 in 2015. According to Aaron Taube (writing in Business In-
sider, Oct. 23, 2014), Costco already pays a minimum wage of $11.50, and its
hourly employees average $20 per hour. And in April of this year, Gravity Pay-
ments, a credit card payment processing company, announced that it was raising
the minimum salary for its employees to $70,000 per year.
Governor Cuomo correctly noted that in some other countries, employees of fast
food companies are paid much higher wages than they are in the United States, but
this is old news. Liz Alderman and Steven Greenhouse reported in the New York
Times on October 27, 2014, that a Burger King employee in Denmark earns the
equivalent of $20 an hour, and while Burger King’s and MacDonalds’ profits in
those countries are less than they are here at home, their operations are still prof-
itable enough for them continue to do business in those countries.
In an article for the New York Times on December 31, 2013 (“Thinking Outside
the (Big) Box”), Adam Davidson described the conclusions of economist Zeynep
Ton, a business professor at M.I.T.’s Sloan School of Management, that increased
pay leads to increased productivity, more engaged workers, happier customers -
and higher profits - conclusions backed up by a study co-authored by Marshall
Fisher, a Wharton professor:
For every dollar of increased wages, one retailer that was studied by
Fisher brought in $10 more in revenue. For more-understaffed stores
in the study, the boost was as high as $28.
It seems that some companies here at home have started to drink the cool-aid, and
that is a good thing.

2. The opponents of increasing the minimum wage argue that it will cost jobs - but
that claim is unproven. In essence, it requires us to believe that companies will
abandon their businesses rather than raise prices or make a lower profit. That
seems unlikely. In “Supersize My Wage” (New York Times, December 17, 2013),
Annie Lowery described how, 20 years earlier, when New Jersey increased its min-
imum wage while Pennsylvania did not, the fast food restaurants on the New Jer-
sey side of the border did not shed jobs.
In her article (“Many Low-Wage Jobs Seen as Failing to Meet Basic Needs”, New
York Times, March 31, 2011), Motoko Rich described a report issued by the non-
profit Wider Opportunities:
According to the report, a single worker needs an income of $30,012 a
year — or just above $14 an hour — to cover basic expenses and save
for retirement and emergencies. That is close to three times the 2010
national poverty level of $10,830 for a single person, and nearly twice
the federal minimum wage of $7.25 an hour.
A single worker with two young children needs an annual income of
$57,756, or just over $27 an hour, to attain economic stability, and a
family with two working parents and two young children needs to
earn $67,920 a year, or about $16 an hour per worker.
It is time for all members of the political establishment, regardless of party affilia-
tion, to start drinking the same cool-aid that Costco, Ikea, Aetna and other leaders
on this issue have been imbibing.
Philip J. Moss was a management labor lawyer for 38 years, and is
now an author and an arbitrator/mediator for labor and employment
issues.