Quick! Can you name a way the Obama administration can really boost wages in this country without actually raising the official federal minimum wage... AND get plenty of Republican support while doing it?
Time's up.
Here's the answer: boost military pay, especially for new enlistees. It would work because it's worked before. And it would also help solve some other problems that go beyond just the economy.
The easiest way to explain this is to first focus on where the minimum wage fight is going wrong. The front lines in this fight right now are in the food services industry, and the "troops" are fast food workers and traditional restaurant wait staff. Because so many of us come face-to-face with these minimum wage workers so regularly, politicians in several cities have guessed that there's enough popular voter support for raising the pay for waiters and hamburger cooks first. But what those same politicians and supporters of minimum wage hikes will soon learn is that raising pay for food service workers won't push wages much higher or at all in other entry level jobs, nor will it boost demand for those low-skill, high physical effort jobs. In fact, it's more likely to result in fewer food service jobs or reduced hours as employers look to hold back their costs. A move to automation, especially in fast food, is already very much in the works. Focusing on food service jobs or any low-skill private sector job in hopes of boosting wages across the board or reducing the wealth gap is a mistake. It just doesn't provide enough economic traction and it certainly doesn't encourage enough of the lowest level workers to get more skills and the jobs that require them.
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By contrast, increasing military pay achieves those goals with a lot more upside thrown in. First off, there's actual demand for new soldiers and sailors. For only the third time in 20 years, the U.S. military is falling short of its designated annual recruitment levels this year. Reports out last week showed we're currently 14% behind the target. There are a number of reasons for this gap, but a generally improving job market has traditionally been the biggest reason why recruitment levels drop. That's especially true when it comes to high quality recruits who have graduated high school and score the highest on military assessment tests. Has anyone even asked whether the fast food industry or the local Applebee's actually needs more workers before we demand they pay everyone more? If wages in the free market are flat, that pesky supply and demand issue is probably the reason. But the employer in this case is Uncle Sam and he can't raise military pay without an act of Congress. And even though military pay is not one of the items effected by the budget sequester, annual raises have only been between 1% and 2% for five years running. Based on economic principles alone, a military pay raise is much more warranted than a federal minimum wage hike for the private sector.
I don't have to make a long case explaining why enlisting in the military is a better career move with more upside potential than flipping burgers at Hardee's. But it should be said that while the news and entertainment media have been fixated on only the hardships endured by our active duty military and veterans, most current and former enlistees know their time in the armed forces was meaningful and helpful for all their career and personal goals. That's true even though a survey released in December by Military Times found the overall morale of active duty personnel has dropped more than 30 percentage points ever since Barack Obama became commander-in-chief. Raising military pay significantly would go a long way to solving that problem too.
Economically, better military personnel are in a unique situation to help other aspects of the economy much more than entry level workers in other fields. Benefits beyond salary especially help boost the housing sector and the higher education sector. And the many technical skills so many active duty personnel learn on the job make them more marketable job seekers after they leave the military.
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Again, this has been done before and with spectacular results. President Ronald Reagan pushed for and got a split Congress to approve record high military pay raises of 11.7% in 1981 and 14.3% in 1982. That jolted the military out of its low morale from the Vietnam and Jimmy Carter malaise even before other aspects of Reagan's military spending kicked in. Reagan knew that it would take some time to see the strategic and economic benefits of his significant defense spending hikes, but pay raises would provide an immediate benefit for both. And they did. Economic growth, especially in the regions of the country with larger military bases and populations, took off within a year of that second big active duty pay raise in 1982. Money doesn't solve every problem, but sometimes it goes much further than face value. As one retired Army staff sergeant wrote in a published tribute at President Reagan's funeral, "He rammed through a series of pay raises that did not exactly bring the military into parity with the civilian sector, but was a dramatic increase from the Vietnam-era salary levels. That was a huge shot in the arm all by itself. He also initiated a major rehabilitation of military housing that greatly improved life for soldiers and their families."
While the Republican Congress isn't likely to go along with any Obama administration push to raise the federal minimum wage alone, boosting military pay by more than this paltry 1% trend is something a lot of the GOP leadership and rank-and-file would support. Throw in the fact that so many Republican Members of Congress represent districts with high military populations, and you can see the added economic and political reasons they'd have to get behind this. In fact, if the Obama team really wanted to push wages higher it would offer some kind of significant boost in military pay in return for GOP support or acquiescence to a minimum wage hike. Wheeling, dealing, and compromising is not something this administration has been very good at, so I thought I'd give them a hand.
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Of course, none of this will be possible if President Obama continues to downplay and downgrade the need for a stronger and decent-sized military. If the White House wants the Republicans to get over their visceral opposition to federal minimum wage hikes, then it's going to have to get over its entrenched opposition to more military spending. Helping the military would help President Obama help himself in the same way that boosting pay for qualified and needed workers in any field is the best way to help them help themselves.
It's a win-win.
