Did Congress define a living wage at $22/hour?

I’m trying to be a little more edgy in my editorials. I think the readership deserves it. Pushing the envelope last week was met with a little criticism, but not much.

I got wrapped up this morning in a piece by Des Moines Register Watchdog reporter Lee Wood, who picked apart the Iowa Economic Development Authority’s handling of grants made through federal CARES Act funds.

Wood points to the inconsistencies of the process, and how the state is now asking for some of the money back after deeper dives into the grant applications.

It’s been my opinion from the outset that the government was throwing too much money at the problem from all angles. Grants… Paycheck Protection Program loans, FPUKE… I mean FPUC, the $600 stimulus that’s currently in play with the state unemployment packages, and stimulus money.

Without a real clear picture of how all this is getting paid for, should give everyone a bit of pause. Our elected lawmakers saw the need to infuse money into the system, not just for health and safety, but for commerce as well.

But Wood points out that there are many inconsistencies with how the government doled out the money. She mentions Fort Madison’s Cobblestone Inn as one operation that saw no grant money, when four other properties under the brand did.

We’ve had businesses close up shop, after receiving the grant when the money was specifically programmed as gap funding. There’s thought that money should be reimbursed? I’ve talked informally with restaurant owners who’ve said business has been good, even increased year to date sales.

But they got creative, as the market demands sometimes in troubling economic times. They found a way. Economists would say that’s what’s supposed to happen. Economic theory would suggest that makes the market stronger.

But some businesses absolutely needed that gap income to allow them to reopen doors when there was no way to stay open. How do you parse that, while trying to be expedient with getting the emergency funding out. It got flubbed for sure, but as a whole the process helped.

Are they’re going to be stories of people taking advantage of the government’s rush to infuse capital to keep things going? Absolutely… and those stories won’t just come from the metropolitans of Iowa and the nation.

I tend to believe that $600 was too much and as I was saying long before national media grabbed it up last week, there’s going to social backlash to people having to go back to work for minimum wage, when they’ve been home collecting upwards of $1,000 per week during the pandemic. That boils down to $52K per year, even though just through July 31 for now.

One person I spoke with said $600 wasn’t too much and the government had by it’s own actions just told the country what a “living wage” amounted to. It’s a sneaky good point, but that’ll have a counter for it.

At 40 hours a week the government would have to set the minimum wage $15 more than it is right now to make an extra $600 per week. That would mean a national minimum wage in excess of $22 per hour. It would be $27 in Seattle and $30 in New York City if all things are relative.

Get ready for the $11 gallon of milk and $12 deluxe cheeseburger, right?

“Why? Just cap the price of the cheeseburger”

If the pandemic has shown Americans anything it may appear that Congress truly understands a living wage now. They set it themselves. And to keep corporate America from continuing to skew the layers of the socio-economic stratification, those same elected officials that created that formula to allow us to continue living during the pandemic, are going to have to define what post-pandemic America looks like.

Didn’t Congress just define the minimum level of income for a working American individual at about $52,000? Take the unemployment plus the FPUKE. On average we’re close to $1,000 per week. That would be setting a minimum living wage at $22/hour.

Let’s go a step further and set overtime at 45 hours instead of 40 hours per week. Wanna get American going again, let’s work an extra five hours at regular pay. That adds to the state and federal payroll taxes, adds production, adds to household incomes, and, in theory, eases the burden on Social Security as individual accounts could be better funded.

Sure, the hard worker on the line gets screwed out of $10/hour on the first five hours of OT, but maybe that worker’s wage went up a little to compensate.

The hit comes in the part-timers who staff the convenience stores and restaurants and such. But your conservatives will say those jobs are for high school kids anyway. Maybe a minimum wage for 17 and under and a mandated living wage for those 18 and older. That would really separate the workload, help fill positions, and allow those franchises and convenience stores to pay a wage congruent to the workforce.

I don’t know… the picture is murky at best. We have to find a way to fund the trillions that have been given away – some much needed, and others much hoarded. But to be sure…something had to be done. And now we learn for the next pandemic.

What happens next is where things will really get interesting. But that’s Beside the Point.

Chuck Vandenberg is the editor and co-founder of the Pen City Current and can be reached at editor@pencitycurrent.com.

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