What to Expect From Capitalism

I sympathize with the fast food worker portrayed in this New York Times story.  I genuinely do.  He is working two jobs to support his family and is barely scraping by.  His life sounds miserable.

But it is important to consider what is reasonable to ask of our economy.  I think it's reasonable to ask that low-skill workers get a little more for their labor than they currently do.  But consider the demands being put on this man's income:  he has to support his wife (who can't work) and put a child through college while paying for a $500,000 house and paying the rent on an apartment in Pennsylvania.  If we raise the minimum wage high enough for fast-food workers to be able to live in half-million dollar houses while supporting entire households, then it's going to be a very different country indeed.  A household with two fast-food workers will be able to afford a $1 million house.  So for instance, a couple employed at McDonald's might be able to live in a house like one of these, with money left over for a very fancy car.

To put it another way, this is not primarily a story about the minimum wage.  It is a story about New York real estate, and the New York Times has done a pretty bad job of keeping these issues distinct.  The result is fairly absurd (although, again, I acknowledge this is a sad story—it's just not the story that the Times thinks it is).  You can make a doctor look poor if you put him in an expensive enough house in New York City.  This Washington Post story, which focuses on food stamps, seems more representative of what it means to live on low-skill wages in the U.S. today.