The federal minimum wage is now $7.25 cents an hour, about $15,080 for a full time, year round worker. At that level, it means poverty wages for a family of three, and weakened demand for the economy. As Cardinal Timothy M. Dolan and New York’s bishops concluded, this leaves workers “on the brink of homelessness, with not enough in their paychecks to pay for the most basic of necessities, like food, medicine or clothing for their children.”
Poverty wages offend both justice and common sense. It is time to raise the floor.
If today’s minimum wage were at its previous height in 1968, adjusted for inflation, it would be over $10.00 an hour.
The Economic Policy Institute (EPI) estimates that the recently-introduced proposal by Sen. Tom Harkin (D-Iowa) to lift the minimum wage to $9.80 over three years would give 28 million workers a raise. In a time of faltering growth, this money would be immediately spent, a direct boost to demand and the economy.
This country is now scarred by staggering inequality. In 2010, the last year figures were available, the wealthiest 1 percent captured a staggering 93 percent of the income growth, while most Americans fell behind. One way to address that kind of inequality is to bring down the top — through progressive tax reform and curbing the perverse compensation schemes of CEOs and big bankers. Another is to bring up the floor, by empowering workers to gain a fair share of the rising productivity and profits they help to produce. One step in doing that is to raise the floor under the most vulnerable workers.
Opponents, led by the national Chamber of Commerce and Republican conservatives, view the minimum wage as a “job killer.”
But most careful studies — including those done by the current head of the Council of Economic Advisers, Alan Krueger, show no such effect.
This is just common sense. Put money into the pockets of low-wage workers and they will spend it, increasing demand for businesses. Alternatively, when companies lack customers, giving them a tax break is the least effective way to boost the economy. EPI estimates that hiking the minimum wage could create demand needed to generate about 100,000 full-time equivalent jobs.
Logic and economic evidence, however, means little in this age of money politics. So in New York and in Washington, we witness the obscenity of lawyers collecting $1,000 an hour to lobby against giving the poorest workers another $1.25 an hour.
The minimum wage was first passed in 1938 in the midst of the Great Depression. Frances Perkins, Roosevelt’s remarkable Labor secretary, accepted her appointment only on the condition that the president would push to “put a floor under wages and a ceiling on hours, and to abolish abuses of child labor.” Roosevelt had to overcome the opposition of the reactionary majority on the Supreme Court, the business lobby and the coalition of Republicans and Southern Democrats to pass the first minimum wage of 25 cents an hour.
FDR had the people on his side, with nearly 70 percent expressing support for a minimum wage. Over two thirds of Americans support raising the minimum wage today.
President Obama promised to raise it in the 2008 campaign, but in the face of Republican opposition, has not pushed for it. Mitt Romney says he favors indexing the minimum wage to inflation, but opposes raising it now, even as he champions tax cuts worth an average $250,000 for those making a million or more.
Already the states have started to act. Eighteen states have hiked their minimum wage over the federal level. In New York, legislation to raise the minimum wage to $8.50 passed the Assembly but is bottled up by Republican opponents in the Senate. Business leaders from the Greater New York Chamber of Commerce, the American Sustainable Business Council as well as the Working Families Party, Mayor Bloomberg and Cardinal Dolan and the state’s bishops have all urged action on the bill.
In Congress, proponents are gearing up a campaign to raise the minimum wage to $9.80 an hour by 2014. Given Republican opposition, the legislation will no doubt have to survive a filibuster in the Senate and will only get a vote in the House if a majority of legislators sign a discharge petition to get it on the floor.
It’s time to force the issue. Let voters see where their legislators stand. Activists should call on every legislator to join a discharge petition once the bill is introduced. The Congressional Progressive Caucus could help lead a national drive for support.
We’ve seen who supports tax cuts on the wealthy and billion dollar subsidies to big oil. Let’s see who supports raising a minimum wage so a full-time worker can lift his or her family out of poverty. Big money is flooding our elections in the wake of the debate over taxes. A debate on lifting the minimum wage might just engage the attention of the most vulnerable and stimulate them to vote. Our economy and our democracy would be the better for it.