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In My Opinion
Minimum Wage Is Not a Living Wage...
Wednesday, December 4, 2013 • Posted December 5, 2013

I read a great editorial on this morning that discussed the problem with our current minimum wage. It's important to note at the outset that the editorial was co-written by the president of the AFL-CIO and the executive director of an advocacy group for lower-wage workers; but, it doesn't lessen the validity of the points made by the authors.

They point out that all the wage increases in the past 15 years have gone to the wealthiest 10%. And, almost all, 95%, of the income gains from 2009 to 2012 went to the very richest 1%. Meanwhile, the minimum wage is at $7.25 an hour for the majority of American workers.

If the minimum wage had kept pace with inflation since 1968, it would be $10.77 an hour today instead of $7.25. For tipped workers, the rate's been stuck at $2.13 for 20 years! If the minimum wage had kept up with the growth of workers' productivity, it would be $18.67. And, if it had matched the wage growth of the wealthiest 1%, it would be more than $28!

The share of workers in "good jobs" -- paying more than $37,000 a year and providing health care and retirement benefits -- has fallen, even though workers' average age and education level have grown. And today, most job growth -- and six in 10 jobs expected to be added over the next decade -- are in low-wage fields.

Congress is considering a proposal, called the Fair Minimum Wage Act that would raise the minimum wage over two years to $10.10 an hour and let it grow with inflation. The Senate should be considering the proposal this week.

Forbes magazine interviewed a McDonald's worker in their July issue, a 28-year old with four children in Kansas City, Missouri. She started working in 2012 making $7.25 an hour, and now makes $7.35 an hour, which makes her pay between $400 and $600 a month. Her rent is $650 a month. She runs behind on rent, and counts on $543 worth of food stamps every month to feed her family.

I read this editorial and wondered how families can survive in such a situation. I know that many people are opposed to raising the minimum wage, citing the increased costs to employers and the negative impact on small businesses. Many of those same people are also opposed to the relief programs such as food stamps that help those same workers close the gaps for their families' survival. However, if the minimum wage were at the proposed $10.10 an hour, that is more than $2.50 an hour more for those workers to use to provide for their most basic needs.

And, if those workers have more income, they are more likely to use any surplus to make purchases from small businesses that sell clothing, food, school supplies, toys and other items. As they spend more and more of that surplus income with small businesses in their community, those businesses are able to offer competitive wages to their lower-paid employees, and the money continues flowing back into the system.

In the last few decades, the problem of a disappearing middle class has been spun into an attack on successful people, or an attempt for those at the bottom to get a share of the pie without doing any real work. Such a scenario ignores the people who are working two or three jobs just to make ends meet. It ignores people who are always working, and getting further and further behind.

I'm pleased for those who have succeeded. That does not mean that the rules of the game should be so stacked in their favor that the American dream of opportunity and prosperity is nothing more than a fantasy. The first step into equalizing that playing field is to start paying wages that are realistic and fair.

It’s all just my opinion.

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