Time for $10-an-hour minimum wage
Last week, legislators led by my son Rep. Jesse Jackson Jr. (I write with some pride) called on the Congress to raise the minimum wage to $10 an hour, back to the levels it reached in 1968, and index it to inflation so it doesn’t lose value over time. Republicans in Congress will block a vote on this measure. Democratic leaders can’t figure out where they are on it. The U.S. Chamber of Commerce will unleash a horde of lobbyists to oppose it. But the reality is that this would be a no-brainer. And it is time for the president and sensible leaders in both parties to push for its passage.
The current federal minimum wage is set at $7.25 an hour. Eighteen states have higher mandates. The federal minimum wage was last raised in 2007 in a two-stage process to get to current levels. Because it is not indexed to inflation, the minimum wage has lost ground over time. In 1968, the floor was set at the equivalent of more than $10 an hour in today’s terms.
Raising the minimum wage to $10 an hour would lift the wages of 30 million Americans, more than 20 percent of the work force. It would not only affect the wages of those who work for less than $10 an hour but also of those who make a little more, as employers would raise their pay to retain good workers. A staggering 40 percent of the work force falls within that range.
These are poor people, but they aren’t lazy. They work hard every day that they can. They take the early bus. They do the dirty jobs. They wait in job lines. They shower when they come back from work, not before they go to work.
Raising the minimum wage would help the economy, putting money into the pockets of low-wage workers who would spend it. At a time when businesses are looking for customers, raising the floor under families just makes sense. And it would represent a measure of justice. As Rep. Jackson said: “We’ve bailed out banks, we’ve bailed out corporations, we’ve bailed out Wall Street, we’ve tried to create sound fundamentals in the economy. Now it’s time to bail out working people who work hard every day and they still only make $7.25. The only way to do that is to raise the minimum wage.” As consumer advocate Ralph Nader noted at the news conference, “A single Wall Street executive’s compensation of $15 million would pay the annual wages of over 700 workers working at a minimum wage of $10 per hour.”
Opponents of the minimum wage increase argue that it would cost jobs, forcing small businesses to lay off workers. However, repeated academic studies have shown that, even in a recession, raising the minimum wage has little effect on jobs. In fact, by putting money into the pockets of working families who will spend it, it helps generate demand, not reduce it. That’s part of the reason more than 1,000 business owners from across the country, led by the CEOs of Costco and the U.S. Women’s Chamber of Commerce, supported the last minimum wage increase.
President Barack Obama should lead this drive, fulfilling the promise he made in 2008 to push for a higher minimum wage by 2011. Usually, minimum wage bills are coupled with tax breaks for small business. But in a reflection of how skewed our politics have been, small business has already gotten 17 tax breaks under Obama, while low-wage workers have yet to get a raise.
With wages declining, one-third of homes with mortgages underwater, and businesses sitting on record profits looking for customers, America needs a raise. Let’s start by raising the floor.
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