This call to increase the minimum wage is being made even before the last phase of the Fair Minimum Wage Act of 2007 goes into effect on Friday. This is the day when the minimum wage raises to $7.25 an hour for those jobs covered by this act. It’s an important step towards recovery for the economy to get back into the hands of the poorest of our workers capital to spend, albeit on their most basic of needs; food, shelter and health-care.
So why the call to increase the minimum wage even further? When adjusting for inflation the new minimum wage still has less buying power than the minimum wage set at $5.15 in 1997 and far less buying power than the minimum wage set in 1968. The year that Rev. Martin Luther King, Jr. was assassinated while protesting with the sanitation workers in Tennessee for a living wage, the buying power of minimum wage was just under $10 in today’s terms. It is hard to believe that 41 years after King’s assassination, this country is further away from his dream than ever when a minimum wage job keeps a family in poverty rather than gets them out of it. No one who works full time should be kept below the poverty level.
Yet, here in Alabama, with no state minimum wage, we are among the poorest of states in the country. President Roosevelt in the midst of the depression said we needed to place a floor under the workers in order to raise the economy. A strong foundation is needed to support any ceiling and our ceiling in America is a cathedral; where the richest man has more wealth than 45 percent of the lowest incomes combined. Any carpenter knows that without a well built foundation the ceiling will collapse. When the minimum wage increases to $7.25 an hour approximately 17-19 percent of workers in Alabama will receive the benefit.
It may seem counter-intuitive during the worst economic crisis this country has faced since the Great Depression to argue for yet another increase in the minimum wage of our poorest workers. Yet, consider this fact issued by the Economic Policy Institute in May of 2009. The first two phases of the Fair Minimum Wage Act of 2007 infused the economy with an estimated $4.9 billion of increased spending. The increase of the minimum wage on July 24th to $7.25 an hour will infuse an additional $5.5 billion into the economy just when the economy needs it the most. President Obama’s proposal of increasing the minimum wage to $9.50 an hour by 2011, which is less than what Let Justice Roll is advocating, will infuse an additional $60 billion into the economy over the two year period.
Increased spending supports businesses. Research done by the Fiscal Policy Institute and others has shown that where states have minimum wages above the federal minimum wage, unemployment is lower. It has been proved to be a myth that higher wages results in less jobs, the opposite seems to be true. One reason for this is the fact that with increased income people are spending more providing an impetus for businesses to grow in the local economy.
Prior to the first increase in 2007 a family of four needed to work an equivalent of three full time jobs at minimum wage just to have enough capital for the basics; food, shelter and health-care. Unfortunately, according to the Federal Register in 2009, the poverty level for a family of four is $22,050; it is several thousand dollars higher in Alaska and Hawaii. That means a family of four needs a full time job that pays at minimum $10.60 an hour just to be at the threshold of the poverty income level.
Thousands of these families do not even have the health-care access needed. Imagine the quality of family life that exists when the parents are not home to be able to provide the love and structure needed to raise healthy children. It is difficult to raise a family in today’s world.
It is even more difficult when all of the family’s energy has to be aimed at providing the basic needs of food and shelter leaving little time for the vitally important work of nurturing and developing children with good healthy values. Parents need to be able to spend time with their children in order to even propose to develop healthy families. Increasing the minimum wage to ten dollars an hour will increase the opportunities for families to be families again. Instead of three full time jobs, perhaps only one and a half jobs will be required to meet the basics. If both parents are working full time jobs then it means there is even more income coming into the house that might place them above the poverty level.
The consequences for not increasing the minimum wage are stark. America over the last several decades has been slipping in its competitive edge in the global community. Our infant mortality rate is the highest among the developed countries. Our life expectancy is ranked 30th in the world. We also rank 16th in the poverty index of the developed countries, meaning that 15 other countries have less poverty than we do. The highest factors in this poverty rating are the percentage of children expected to live to the age of 60 and the percentage of the population with incomes 50% lower than the median. All of these factors are directly related to workers ability to purchase healthcare services.
The inequity of income between the wealthiest and the poorest citizens of this country is approaching the levels that set the stage for the greatest depression this country and world has ever known. We are already seeing the consequences of this disparity in the current economic recession.
If our nation desires to remain competitive in the global economy then we must regain the moral high ground in caring for all of our citizens. An increase of the minimum wage to $10 an hour in 2010 is a start to closing the gap enabling all of our citizens to pursue once again the American Dream.
Fred Hammond is the minister at the Unitarian Universalist Congregation of Tuscaloosa. His views do not necessarily reflect the opinions of the Unitarian Universalist Congregation or its members.
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