In the US, while the cost of living per year has increased since 1970, the average income has not increased. This means that a lot of people are not earning a living wage, about 30% of non-self-employed workers over eighteen, according to the Pew Research Center.
Behind an increase in the number of people working at minimum wage is the increase in “big box” stores like Walmart and chains like Dunkin Donuts that put independently owned stores out of business. The (low-budget) documentary, Walmart: The High Price of Low Cost, details the process that made ghost towns out of town centers. Now Amazon is finishing the job, replacing minimum wage retail sales jobs with less desirable warehouse jobs. These large corporations were able to expand rapidly because they get low- to no-interest loans from the Federal Reserve banking system. Cutting off the flow of free money to these large corporations would limit their expansion and might allow a renaissance of small business opportunities. Imposing a minimum wage would address the symptom, not the cause, of the problem: large corporations taking over the market by benefiting from preferential treatment from the Fed. Raising the minimum wage would likely just lead to in an increase in the cost of living.
Proponents of minimum wage might be more effectual in helping to eliminate economic disparity by instead addressing the problem of high CEO pay relative to the pay of low-level workers, which is almost 300 times more. McDonald’s CEO Steve Easterbrook’s total disclosed compensation grew from $7.4 million in 2015 to $15.4 million in 2016 total compensation. A maximum wage cap on CEO pay might make more sense than a minimum wage, and the Federal government need not directly interfere if corporate rules allowed all stock holders to vote on CEO pay, instead of just allowing CEO board members to vote on CEO pay. Another solution that would not involve direct Federal interference would be to give major tax breaks for employee-owned and -run companies.
Increasing the frequency with which money circulates among the middle and low economic classes improves their standards of living. The amount in circulation matters less than the frequency. If $100 changes hands 100 times in one month, that’s $10,000 worth of goods and service exchanged and improvements made in people’s lives. If $100 only changes hands 10 times in one month before it filters up to the top where owners of large corporations take their cut, only $1,000 worth of improvements are made in the local economy and it is relatively stagnant. Preventing money from filtering up to the owners of large corporations and to stock holders is a way of increasing the standard of living among most people without imposing a minimum wage.