Photo courtesy of Wikimedia Commons.
“No business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By living wages I mean more than a bare subsistence level—I mean the wages of a decent living.” — Franklin Roosevelt 1938 (urging passage of minimum wage legislation)
On January 1st of this year, 10 U.S. states increased their minimum wage rates by between 10 and 35 percent. Washington State will once again hold the highest minimum wage of $9.19. The prevailing federal-induced minimum wage for 31 of America’s states remains at $7.25 per hour, with no embedded cost-of-living raise clause. If the minimum wage had kept pace with inflation it would be well over $10 an hour today. In fact, the most recent raise, adopted by Congress in 2007, does not even match the actual spending power of the 1979 adjustment!
Minimum wage has a strong social appeal, rooted in concern about the ability of markets to provide income equality for the less abled members of the work force. It serves to many as an obvious solution to fighting poverty. But for all its seeming “obviousness,” the minimum wage issue remains a highly contested one amongst politicians, business owners’, workers right groups, and surprisingly, even among economists. The notion of raising the minimum wage notoriously gets so much opposition that it rarely even comes close to becoming a substantial enough amount to mirror a true “living wage”. So what gives…?
Republicans are up to seven wins in 12 elections to date, even including Obama’s two wins. US labor law has thus become the most anti-worker in the developed world; this includes an exceptionally low national minimum wage. Theoretically, adding to the current growing divide between the rich and poor in America.
President Barack Obama, while campaigning in 2008, pledged to hike the minimum wage to $9.50 an hour and index it by the end of 2011, “to make sure that full-time workers can earn a living wage,” he said. Obama ultimately failed on that pledge and hasn’t been vocal on the issue since his initial campaign.
Earlier this month New York Governor Andrew Cuomo called for raising the state’s minimum wage by nearly 21 percent, to $8.75 an hour. The results of Cuomo’s platform are yet to be seen, but if recent history is any indication- he has a steep uphill battle on this issue.
Business lobbies like the Chamber of Commerce and the National Restaurant Association tend to oppose both federal and state hikes to the minimum wage, arguing that they squeeze business owners and force them to cut back on hours for workers. Loss of hours and of jobs for low-skilled workers has long been the stalwart for minimum wage opponents. But the International Labor Organization (ILO) has argued that the minimum wage could not be directly linked to unemployment in countries that have suffered job losses.
According to some economists, creating a large number of low-wage positions is not enough to get the economy back on its feet. Raising the minimum wage to get more cash to the working poor is seen as just as crucial.
The ugly truth that propagates while politicians and economists argue over minimum wage’s efficiency is that 28 percent of all American workers are getting paid at or below the level required to stay above the poverty line.
Ironically, the vicious cycle of working around the clock with a minimum wage makes it impossible for such workers to attain higher education or advanced job skills — the very things that can help them advance.
Still, in the current political climate, there is strong opposition to anything that might cost companies money and deter them from adding to their payrolls- a situation that could see the already extremely low federal minimum wage not budging anytime soon.
Yet, as counter-intuitive as it may seem to raise the minimum wage at a time when our nation is climbing out of a recession, supporters of minimum wage promulgate it may be precisely the time when such a raise is needed the most. It is during times of economic difficulty that those in the most dire monetary circumstances need the most attention—and not just for their own sake, but for the sake of transforming those downtrodden into consumers that help stimulate the markets. Such a bump in the minimum wage might also motivate those who are currently too busy working a full work week for poverty wages to care more about productivity or improving their skills. Such a state of common labor practice is seen by many as definitively exercising a negative pull on the economic circumstances of our country.