SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
Minimum Wage Raise Too Little, Too Late
Jul 24, 2008
Minimum wage workers have been stuck in a losing game of "Mother May I" with the federal government. Workers step forward when the government says yes to raising the minimum wage. Workers step backward when the cost of living increases, but the minimum wage doesn't.
Until 1968, minimum wage workers took frequent and big enough steps forward to make overall progress. Since 1968, when the minimum wage reached its peak buying power, workers have taken many steps backward for every step forward.
The July 24 minimum wage raise is so little, so late that workers will still make less than they did in 1997, adjusting for the increased cost of living, and way less than in 1968.
The decade between the federal minimum wage increase to $5.15 an hour on Sept. 1, 1997, and the July 24, 2007 increase to $5.85 was the longest period in history without a raise.
Gas prices rose from $1.23 to $2.97 a gallon in the same period. Now it's over $4.
The new $6.55 minimum wage is lower than the 1997 minimum wage, which is worth $6.88 in 2008 dollars, and way lower than the inflation-adjusted $9.86 minimum wage of 1968. For full-time workers that translates into $20,509 a year at the 1968 rate, compared with just $13,624 at the hourly rate of $6.55.
The minimum wage does not provide a minimally adequate living standard -- and it still won't when the last scheduled raise to $7.25 takes place next July.
Workers are constantly choosing what to go without -- "heat or eat," child care or health care.
Health care aides can't afford to take sick days. Retail clerks and child care workers depend on food banks. Security guards sleep at homeless shelters.
It wasn't always this way. Workers used to share in the gains of rising worker productivity.
Between 1947 and 1973, worker productivity rose 104 percent and the minimum wage rose 101 percent, adjusting for inflation. The middle class grew.
Between 1973 and 2007, productivity rose 83 percent and the minimum wage fell 22 percent, adjusting for inflation. Average worker wages fell 10 percent while domestic corporate profits rose 219 percent, and profits in the disproportionately low-wage retail industry jumped 346 percent. More jobs paid poverty wages.
Higher education does not protect you from falling wages. The inflation-adjusted wages of recent college graduates were lower in 2007 than they were in 2001.
There's been a massive shift of income from the bottom and middle to the top. The richest 1 percent of Americans has increased their share of the nation's income to a higher level than any year since 1928, the eve of the Great Depression.
Our modern robber baron age features people like Countrywide Financial CEO Angelo Mozilo. He pocketed $103 million last year as the subprime mortgage ponzi scheme morphed into the worst financial crisis since the Depression.
Minimum wage workers don't put raises into predatory lending, commodity speculation or offshore tax havens. They recycle their needed raises back into local businesses and the economy through increased spending.
Eight of the "SurePayroll Top Ten States for Small Businesses" in 2008 have had state minimum wages above the federal level. They include Washington, California and Oregon, three of the four states with the highest minimums.
Minimum wage raises are stimulus for an economy tanking from a housing bubble gone bust, sharply higher oil prices, extreme inequality, unsustainable debt, and fraud and speculation crowding out productive investment.
Higher wages benefit business by increasing consumer purchasing power, reducing costly employee turnover, raising productivity, and improving product quality and company reputation. They reinforce long-term success.
Let Justice Roll, a national faith, community, labor and business coalition, which I advise, is calling for a minimum wage of $10 in 2010.
$10 in 2010 will bring the minimum wage closer to the value it had in 1968, a year when the unemployment rate was a low 3.6 percent.
It will bring the minimum wage closer to the "minimum standard of living necessary for health, efficiency and general well-being of workers" promised by the Fair Labor Standards Act establishing the minimum wage 70 years ago.
It will strengthen the foundation under our unsound economy.
Holly Sklar is co-author of "A Just Minimum Wage: Good for Workers, Business and Our Future" (www.letjusticeroll.org) and "Raise the Floor: Wages and Policies That Work for All of Us." She can be reached at hsklar@aol.com.
Distributed by McClatchy-Tribune News Service
Copyright (c) 2008 Holly Sklar
An Urgent Message From Our Co-Founder
Dear Common Dreams reader, The U.S. is on a fast track to authoritarianism like nothing I've ever seen. Meanwhile, corporate news outlets are utterly capitulating to Trump, twisting their coverage to avoid drawing his ire while lining up to stuff cash in his pockets. That's why I believe that Common Dreams is doing the best and most consequential reporting that we've ever done. Our small but mighty team is a progressive reporting powerhouse, covering the news every day that the corporate media never will. Our mission has always been simple: To inform. To inspire. And to ignite change for the common good. Now here's the key piece that I want all our readers to understand: None of this would be possible without your financial support. That's not just some fundraising cliche. It's the absolute and literal truth. We don't accept corporate advertising and never will. We don't have a paywall because we don't think people should be blocked from critical news based on their ability to pay. Everything we do is funded by the donations of readers like you. Will you donate now to help power the nonprofit, independent reporting of Common Dreams? Thank you for being a vital member of our community. Together, we can keep independent journalism alive when it’s needed most. - Craig Brown, Co-founder |
Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
Holly Sklar
Holly Sklar is CEO of Business for a Fair Minimum Wage. Holly Sklar's books include "Raise the Floor: Wages and Policies That Work for All of Us," "A Just Minimum Wage: Good for Workers, Business and Our Future" and "Streets of Hope: The Fall and Rise of an Urban Neighborhood." She can be reached at hsklar.writer@gmail.com
Minimum wage workers have been stuck in a losing game of "Mother May I" with the federal government. Workers step forward when the government says yes to raising the minimum wage. Workers step backward when the cost of living increases, but the minimum wage doesn't.
Until 1968, minimum wage workers took frequent and big enough steps forward to make overall progress. Since 1968, when the minimum wage reached its peak buying power, workers have taken many steps backward for every step forward.
The July 24 minimum wage raise is so little, so late that workers will still make less than they did in 1997, adjusting for the increased cost of living, and way less than in 1968.
The decade between the federal minimum wage increase to $5.15 an hour on Sept. 1, 1997, and the July 24, 2007 increase to $5.85 was the longest period in history without a raise.
Gas prices rose from $1.23 to $2.97 a gallon in the same period. Now it's over $4.
The new $6.55 minimum wage is lower than the 1997 minimum wage, which is worth $6.88 in 2008 dollars, and way lower than the inflation-adjusted $9.86 minimum wage of 1968. For full-time workers that translates into $20,509 a year at the 1968 rate, compared with just $13,624 at the hourly rate of $6.55.
The minimum wage does not provide a minimally adequate living standard -- and it still won't when the last scheduled raise to $7.25 takes place next July.
Workers are constantly choosing what to go without -- "heat or eat," child care or health care.
Health care aides can't afford to take sick days. Retail clerks and child care workers depend on food banks. Security guards sleep at homeless shelters.
It wasn't always this way. Workers used to share in the gains of rising worker productivity.
Between 1947 and 1973, worker productivity rose 104 percent and the minimum wage rose 101 percent, adjusting for inflation. The middle class grew.
Between 1973 and 2007, productivity rose 83 percent and the minimum wage fell 22 percent, adjusting for inflation. Average worker wages fell 10 percent while domestic corporate profits rose 219 percent, and profits in the disproportionately low-wage retail industry jumped 346 percent. More jobs paid poverty wages.
Higher education does not protect you from falling wages. The inflation-adjusted wages of recent college graduates were lower in 2007 than they were in 2001.
There's been a massive shift of income from the bottom and middle to the top. The richest 1 percent of Americans has increased their share of the nation's income to a higher level than any year since 1928, the eve of the Great Depression.
Our modern robber baron age features people like Countrywide Financial CEO Angelo Mozilo. He pocketed $103 million last year as the subprime mortgage ponzi scheme morphed into the worst financial crisis since the Depression.
Minimum wage workers don't put raises into predatory lending, commodity speculation or offshore tax havens. They recycle their needed raises back into local businesses and the economy through increased spending.
Eight of the "SurePayroll Top Ten States for Small Businesses" in 2008 have had state minimum wages above the federal level. They include Washington, California and Oregon, three of the four states with the highest minimums.
Minimum wage raises are stimulus for an economy tanking from a housing bubble gone bust, sharply higher oil prices, extreme inequality, unsustainable debt, and fraud and speculation crowding out productive investment.
Higher wages benefit business by increasing consumer purchasing power, reducing costly employee turnover, raising productivity, and improving product quality and company reputation. They reinforce long-term success.
Let Justice Roll, a national faith, community, labor and business coalition, which I advise, is calling for a minimum wage of $10 in 2010.
$10 in 2010 will bring the minimum wage closer to the value it had in 1968, a year when the unemployment rate was a low 3.6 percent.
It will bring the minimum wage closer to the "minimum standard of living necessary for health, efficiency and general well-being of workers" promised by the Fair Labor Standards Act establishing the minimum wage 70 years ago.
It will strengthen the foundation under our unsound economy.
Holly Sklar is co-author of "A Just Minimum Wage: Good for Workers, Business and Our Future" (www.letjusticeroll.org) and "Raise the Floor: Wages and Policies That Work for All of Us." She can be reached at hsklar@aol.com.
Distributed by McClatchy-Tribune News Service
Copyright (c) 2008 Holly Sklar
Holly Sklar
Holly Sklar is CEO of Business for a Fair Minimum Wage. Holly Sklar's books include "Raise the Floor: Wages and Policies That Work for All of Us," "A Just Minimum Wage: Good for Workers, Business and Our Future" and "Streets of Hope: The Fall and Rise of an Urban Neighborhood." She can be reached at hsklar.writer@gmail.com
Minimum wage workers have been stuck in a losing game of "Mother May I" with the federal government. Workers step forward when the government says yes to raising the minimum wage. Workers step backward when the cost of living increases, but the minimum wage doesn't.
Until 1968, minimum wage workers took frequent and big enough steps forward to make overall progress. Since 1968, when the minimum wage reached its peak buying power, workers have taken many steps backward for every step forward.
The July 24 minimum wage raise is so little, so late that workers will still make less than they did in 1997, adjusting for the increased cost of living, and way less than in 1968.
The decade between the federal minimum wage increase to $5.15 an hour on Sept. 1, 1997, and the July 24, 2007 increase to $5.85 was the longest period in history without a raise.
Gas prices rose from $1.23 to $2.97 a gallon in the same period. Now it's over $4.
The new $6.55 minimum wage is lower than the 1997 minimum wage, which is worth $6.88 in 2008 dollars, and way lower than the inflation-adjusted $9.86 minimum wage of 1968. For full-time workers that translates into $20,509 a year at the 1968 rate, compared with just $13,624 at the hourly rate of $6.55.
The minimum wage does not provide a minimally adequate living standard -- and it still won't when the last scheduled raise to $7.25 takes place next July.
Workers are constantly choosing what to go without -- "heat or eat," child care or health care.
Health care aides can't afford to take sick days. Retail clerks and child care workers depend on food banks. Security guards sleep at homeless shelters.
It wasn't always this way. Workers used to share in the gains of rising worker productivity.
Between 1947 and 1973, worker productivity rose 104 percent and the minimum wage rose 101 percent, adjusting for inflation. The middle class grew.
Between 1973 and 2007, productivity rose 83 percent and the minimum wage fell 22 percent, adjusting for inflation. Average worker wages fell 10 percent while domestic corporate profits rose 219 percent, and profits in the disproportionately low-wage retail industry jumped 346 percent. More jobs paid poverty wages.
Higher education does not protect you from falling wages. The inflation-adjusted wages of recent college graduates were lower in 2007 than they were in 2001.
There's been a massive shift of income from the bottom and middle to the top. The richest 1 percent of Americans has increased their share of the nation's income to a higher level than any year since 1928, the eve of the Great Depression.
Our modern robber baron age features people like Countrywide Financial CEO Angelo Mozilo. He pocketed $103 million last year as the subprime mortgage ponzi scheme morphed into the worst financial crisis since the Depression.
Minimum wage workers don't put raises into predatory lending, commodity speculation or offshore tax havens. They recycle their needed raises back into local businesses and the economy through increased spending.
Eight of the "SurePayroll Top Ten States for Small Businesses" in 2008 have had state minimum wages above the federal level. They include Washington, California and Oregon, three of the four states with the highest minimums.
Minimum wage raises are stimulus for an economy tanking from a housing bubble gone bust, sharply higher oil prices, extreme inequality, unsustainable debt, and fraud and speculation crowding out productive investment.
Higher wages benefit business by increasing consumer purchasing power, reducing costly employee turnover, raising productivity, and improving product quality and company reputation. They reinforce long-term success.
Let Justice Roll, a national faith, community, labor and business coalition, which I advise, is calling for a minimum wage of $10 in 2010.
$10 in 2010 will bring the minimum wage closer to the value it had in 1968, a year when the unemployment rate was a low 3.6 percent.
It will bring the minimum wage closer to the "minimum standard of living necessary for health, efficiency and general well-being of workers" promised by the Fair Labor Standards Act establishing the minimum wage 70 years ago.
It will strengthen the foundation under our unsound economy.
Holly Sklar is co-author of "A Just Minimum Wage: Good for Workers, Business and Our Future" (www.letjusticeroll.org) and "Raise the Floor: Wages and Policies That Work for All of Us." She can be reached at hsklar@aol.com.
Distributed by McClatchy-Tribune News Service
Copyright (c) 2008 Holly Sklar
We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.