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Lower Fares No Substitute For Higher Wages

Economy Memo Pad

Lower Fares No Substitute For Higher Wages

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Link Light Rail Seattle - Opening Day

The idea of helping low-income people by subsidizing their fares on public transportation sounds noble. It truly does. But as a means of confronting the national problem of meager paychecks, it’s rather misdirected.

All eyes are now on Seattle, which has started offering discount fares to riders whose household income does not exceed twice the federal poverty level. The growing gap in wealth between the affluent and the working poor is a national woe — especially in boom cities like Seattle, where rising real estate values are forcing lower-paid workers to commute from the suburbs.

“It’s people doing really well and people making espresso for people who are doing really well” is how King County Executive Dow Constantine, also head of Sound Transit, described the situation.

But one might then ask, Why aren’t the people making espresso doing better?

Public transportation is typically funded through the fares users pay and considerable government subsidies. So the Seattle area’s reduced-fare ORCA Lift program is being supported by the taxpayers and the better-off passengers.

On one level, that sounds reasonable. But on another, it amounts to an accommodation of inadequate pay. The public is easing the market pressure on the employers to boost pay.

Walmart has never been shy about connecting its low-paid workers with Medicaid or food stamps — in effect asking the taxpayers to subsidize its labor force and its bottom line. Four of Sam Walton’s heirs currently sit in the top 10 on the Forbes list of wealthiest Americans, with a combined net worth of close to $160 billion.

There’s been much heralding of Walmart’s recent decision to raise its entry-level wage to $10 an hour (because of a tightening labor market). That’s still less than the federal minimum wage in 1968, which would be $10.58 in today’s dollars.

Back in Seattle, Basro Jama, a Somali immigrant supporting two children, earns less than $25,000 a year after taxes working a full-time job, according to The New York Times. She commutes from her home in Tukwila to her assignment in downtown Seattle cleaning offices. Thanks to her new reduced-fare card, she saves $10 a week, or nearly 2.5 percent of her paycheck.

Why in heaven’s name is a full-time worker in an expensive part of the country taking home only $25,000? The real estate barons charging sky-high rents to top-paid professionals can darn well hand their workers another $10 a week so they can travel to the job. They’re the ones who should be giving Jama a 2.5 percent raise.

Or perhaps they’d like to vacuum and clean the office tower toilets themselves.

San Francisco has long run a reduced-fare program for the poor, but few people have signed up for it. That’s largely because the means-testing adds a messy layer of bureaucracy to what should be a simple transaction of buying a ticket or fare card.

Obviously, the applicants must provide documentation of their low income. The ORCA Lift program requires different income verification documents — if you are in certain benefits programs, if you have no income, if you are employed — plus basic identification. And other people must be hired to oversee the process of issuing the cards.

A higher minimum wage makes so much more sense than means-testing for certain public services. Seattle has been a national leader in raising its minimum, currently $15 an hour. That way, the beneficiaries of the workers’ labor are paying for it.

There’s been an unfortunate mindset across the land that employers of low-skilled workers have a right to labor at a fixed low price. Let’s not validate it.

Follow Froma Harrop on Twitter @FromaHarrop. She can be reached at fharrop@gmail.com. To find out more about Froma Harrop and read features by other Creators writers and cartoonists, visit the Creators Web page at www.creators.com.

Photo: Lee LeFever via Flickr

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Froma Harrop

Froma Harrop’s nationally syndicated column appears in over 150 newspapers. Media Matters ranks her column 20th nationally in total readership and 14th in large newspaper concentration. Harrop has been a guest on PBS, MSNBC, Fox News and the Daily Show with Jon Stewart and is a frequent voice on NPR and talk radio stations in every time zone as well.

A Loeb Award finalist for economic commentary in 2004 and again in 2011, Harrop was also a Scripps Howard Award finalist for commentary in 2010. She has been honored by the National Society of Newspaper Columnists and the New England Associated Press News Executives Association has given her five awards.

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6 Comments

  1. anothertoothpick March 5, 2015

    What workers really need is collective bargaining. Yes! THAT MEANS UNIONS!

    Reply
    1. jointerjohn March 5, 2015

      At a national AFLCIO convention more than forty years ago I addressed the crowd to say that “their are only two kinds of workers in this world, those who have a union and those who need one.” I stand by that today. Although I am about as liberal as they come, I have always opposed the Earned Income Tax Credit. It only enables low wage employers to pay slave wages and still have workers who bathe and sleep indoors at night.

      1. anothertoothpick March 5, 2015

        Thanks jointerjohn for your efforts.

        Having a middle has to be fought for.

        Capitalism does not have room for a middle class. Workers can do all the work, but that does not mean they will get a fair wage.

        Why is this so hard for the righties to understand?

        1. jointerjohn March 6, 2015

          This is why the nations with strong a middle class and a decent lifestyle for workers are incrementally to our political left, like Germany, Sweden, Australia, Canada, and France. The nations with no middle class where children drink out of ditches are to our political right, Mexico, Brazil, etc. There are also so-called socialistic regimes like Nicaragua where workers suffer, but they are only plutocracies hiding behind phony socialistic cover. Unrestrained free enterprise can be experienced by anyone who wants to spend an afternoon at leisure with some friends. It’s called the game of Monopoly. How does every single game end? With one player holding everything and everyone else with nothing. Such is unregulated capitalism.

    2. Leftout March 5, 2015

      Why not start everyone with a basic 50k. What is acceptable minimum? Then the price of Latte’, will be 20$ . It all filters into the price of doing business . If someone does my toilet I would gladly give them $100k

      1. anothertoothpick March 6, 2015

        The acceptable minimum would be determined at the bargaining table.

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