Vote for a Fair Minimum Wage
D
This month marked seven years since the federal minimum wage was last increased. Since 2009, it has lost 11 percent of its buying power, and at $7.25, the federal minimum wage is worth less than it was in 1950, adjusted for the cost of living. The time for an increase is long overdue.
At $15,080, the minimum wage impoverishes working families and weakens the economy. Workers are also consumers; the continued erosion of the minimum wage floor has hurt consumer spending on local goods and services. The purchasing power of the minimum wage has declined by two-thirds from its high point in 1968, $10.94 in today’s dollars. Companies that fail to pay a family-sustaining wage maintain an unfair competitive advantage by relying on taxpayers to subsidize them. When full-time workers need the public safety net and charity to put food on the table, we are actually subsidizing the profits of businesses that pay inadequate wages. Raising the minimum wage will keep more dollars circulating in the local economy and reduce the strain on the public safety net.
A majority of small businesses support raising the minimum wage. A poll conducted by the American Sustainable Business Council and Business for a Fair Minimum Wage found 61 percent of small business employers nationwide support increasing the minimum to $10.10 and then adjusting it annually to keep pace with cost of living. Small business owners believe a higher minimum wage would help the economy, reduce employee turnover, increase productivity and customer satisfaction, and increase consumer purchasing power. Small businesses experience growth in revenues following a minimum wage hike. When California hiked its minimum wage to $9 an hour from $8 nearly two years ago, Wetzel’s Pretzels saw considerable gains in same-store sales, as low-wage workers spent their additional income.
Considerable research dispels claims that increasing the minimum wage leads to increased unemployment. When the purchasing power of the minimum wage peaked in 1968, the unemployment rate went from 3.8 percent in 1967 to 3.5 percent in 1969. In 2013, the Center for Economic and Policy Research concluded that "the minimum wage has little or no discernible effect on the employment prospects of low-wage workers. The most likely reason for this outcome is that the cost shock of the minimum wage is small relative to most firms' overall costs and only modest relative to the wages paid to low-wage workers." A 2015 report by the research institute Integrity Florida stated, “[A] higher wage may make it easier to attract applicants and results in less turnover of workers, lowering costs of employers.” And research by the Fiscal Policy Institute showed that states that raised their minimum wages above the federal level experienced better employment and small business trends.
All this raise the question of why action on this issue has been so slow. In an economic and political environment that tilts disproportionately towards large, non-local businesses, politicians are emboldened to disregard public opinion in favor of the inclinations of a distinct few. So as convention season draws to a close and the political rhetoric hits a fever pitch, demand any candidate vying for your vote to get serious on reducing poverty, addressing income inequality, and growing the middle class. And this starts with raising the minimum wage.
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From the SBN Policy Desk: