It is time that we catch up with the 1960′s and raise the minimum wage to $10 per hour.
Think about that sobering fact for a second. Even by raising the minimum wage to $10 per hour, it would still remain below the minimum wage (in today’s dollars) in 1968.
At a time when the issue of income inequality has been elevated in political discourse, it is surprising that a plight of millions of workers throughout the country hasn’t been addressed: the need to raise the minimum wage. For decades, the compensation packages and bonuses of the top one percent have been skyrocketing. The stagnant wages of the middle and lower class have suffered at the hands of the insatiable greed of the top one percent.
We live in a land of the absurd: the richest 1 percent control more financial wealth than the bottom 95 percent. Wall Street executives’ bonuses have reached gut-wrenching heights when Bloomberg can, in a recent article, call annual pay of $13 million to $23 million “normal.” Nearly 23 million Americans are unemployed or underemployed. A single Wall Street executives’ compensation of $15 million would pay the annual wages of over 700 workers working at a minimum wage of $10 per hour.
Instead, the minimum wage has remained stagnant or lost value for nearly 45 years. The current federal minimum wage of $7.25 is lower than at any point between 1956 and 1985. This, however, is not just an issue about income inequality.
It is about the recovery of our economy. In 2011, 3.8 million workers were paid at or below the federal minimum wage of $7.25 per hour. Tens of millions more were paid between $7.25 and $10 per hour. A 2011 study by the Chicago Federal Reserve Bank found that for every dollar increase to the wage of a minimum wage worker, the result is $2,800 in new consumer spending from that worker’s household over the year.1 A 2009 study from the Economic Policy Institute estimated that simply by raising the minimum wage to $9.50, $60 billion in additional spending would be added to the economy.2
It is about gender and racial inequality. Nearly two thirds of all workers being paid at or below the federal minimum wage are women. Black and Hispanic workers are also disproportionately impacted: Black workers make up 11.5 percent of the civilian labor force, but 15 percent of minimum wage workers. Hispanic workers make up 15 percent of the civilian labor force, but nearly 19 percent of the minimum wage workers.
It is about the American Dream slipping away. A single mother of two working a $7.25 per hour minimum wage job does not even meet the federal government’s own measure for the poverty line. How can she even hope to escape poverty if the federal minimum wage doesn’t even start her on a level playing field?
1 Aaronson, Daniel, Sumit Agarwal, and Eric French. “The Spending and Debt Responses to Minimum Wage Increases .” Federal Reserve Bank of Chicago. February 8, 2011. <http://www.chicagofed.org/digital_assets/publications/working_papers/2007/wp2007_23.pdf>
2 Filion, Kai. “A Stealthy Stimulus: How Boosting the Minimum Wage Is Helping to Support the Economy.” Economic Policy Institute. <http://www.epi.org/page/-/IssueBrief255_Final.pdf>