Minimum wage is in the news a lot lately. Almost every week a state or city raises its minimum wage. Companies regularly announce wage increases for the workers on the lowest rungs of the income ladder. If you really want to hear your smartphone buzz, just set up a Google Alert for “minimum wage.”
Since 1938, when the first minimum wage was established in the U.S. at the federal level, economists, politicians and others have argued the merits and potential pitfalls of a mandatory minimum wage. Reports full of charts and data abound and we draw them like sabers to support our case or refute the opponent’s.
People approach the subject from myriad angles. For some, it’s all a matter of payroll costs versus productivity versus turnover. Others look at the imposition of a wage floor as an ethical matter.
The question of an increased minimum wage is sometimes seen as a Democrat/Republican issue or a battle between business and labor but that is hardly the case. Notably in Los Angeles, two business powerhouses – philanthropist Eli Broad and developer Rick Caruso – advocated this year for graduated increases to as much as $15 an hour. “I think it’s good for business in the long run,” Caruso said.
I weigh in here on behalf of Minimum1010.org, a new advocacy initiative focused on an increase in the federal minimum wage to $10.10 an hour. For us, the simple bottom line is that for an American working full time to live in poverty is wrong. It flies in the face of our American ethos of hard work leading to security and prosperity. Instead, millions of Americans earning minimum wage subsist in or near poverty. And measuring in real dollars, minimum wage has steadily declined since its peak in 1968.
The Shriver Report: A Woman’s Nation Pushes Back from the Brink, released in January 2014, provides a bounty of grim data showing, among other things, that women hold two-thirds of all minimum wage jobs. Because of this, they stand to benefit the most from a wage increase. The Council of Economic Advisers estimates that increasing the federal minimum wage to $10.10, indexing it to inflation, could close 5% of the gender pay gap, that 77-cents-on-the-dollar figure we’ve heard so much about. Women are breadwinners or co-breadwinners in two-thirds of families with children.
Further, we know that the conventional wisdom of minimum wage jobs being held mostly by teenagers for pocket money or to gain job experience is a myth. The average minimum wage worker is 35 years old, and a vast majority are over 20. Raising the minimum wage would also affect one million veterans.
The fast-food industry has garnered considerable media attention around the wages it pays its workers. Only a few months ago, fast-food workers conducted strikes in dozens of cities, arguing for an increase in what they earn. In that industry alone, more than half of full-time fast-food workers’ families receive some form of public assistance. All Americans pay for that assistance.
An elephant in the room is the February 2014 report issued by the nonpartisan Congressional Budget Office. This is the source of many of those drawn sabers I mentioned. The report says that the three-stage increase to $10.10 could result in the loss of up to a million jobs by 2016, a point that has gotten a lot of play. The report also estimated a $2 billion net increase (after possible job losses) in real income among minimum-wage workers. It described 900,000 people being lifted out of poverty. And it forecasted a heightened demand for goods and services by minimum-wage workers.
In Congress, the Fair Minimum Wage Act of 2013, commonly known as the Harkin-Miller Bill, would raise the federal minimum wage incrementally to $10.10 and index it thereafter to inflation, an approach viewed by economists as sensible.
Is $10.10 an arbitrary number? Somewhat, because it’s catchy and easy to remember. But it represents change for the better. $10.10, as proposed by the White House and supported by my group, is a figure intended, along with tax credits, to keep a family of four with one full-time minimum wage worker out of poverty. It is reasonable and just.
At Minimum1010.org we will stay abreast of the news and share it. We will offer our thoughts on relevant developments in the area. We will share our space with opposing viewpoints. Additionally, we will shine a well-deserved spotlight on businesses that aren’t waiting for Washington to do the right thing and, as President Obama encouraged in January, “give America a raise.” Employers paying “Minimum1010” will get a pat on the back from us.
So much is at stake and so many hardworking Americans deserve to earn a decent, living wage for their work. Good and honest people will disagree about the importance of the minimum wage issue and the efficacy of various approaches to it, but we at Minimum1010.org look forward to joining the conversation…and making a difference.