The typical minimum wage worker is an adult over age 20. Most are high school graduates. These workers include janitors, healthcare aides, childcare workers, retail clerks, farm workers, hospitality workers in hotels, and security guards. Most can’t afford sick days and don’t get paid vacations.
The minimum wage reached its peak value in 1968; today, it would take a $9.83 minimum wage to match its buying power four decades ago, which added up to $20,446 a year. Today, the increased $7.25 minimum wage comes to just $15,080 a year.
Adding to the problem is family health insurance, which cost half a year’s minimum wage income in 1998 but costs more than the total annual minimum wage today.
In their first report on the need for a decent minimum wage in 2005, the Let Justice Roll Living Wage Campaign, a national coalition that advocates for raising the minimum wage to a living wage, predicted the current economic meltdown: “An America that doesn’t work for working people is not an America that works. We will not prosper economically or ethically in the global economy relying on low wages.
The United States is an increasingly shaky superpower with a hollowed-out manufacturing base, large trade deficit, and growing debt held heavily by other countries.”
“This economic meltdown was caused in large part by people doing a lot of things that they thought were good for themselves in the short run, but not in the long-run interests of the economy and businesses generally,” says Let Justice Roll Senior Policy Adviser Holly Sklar.
When the federal minimum wage was first enacted in 1938, “President [Franklin] Roosevelt called the minimum wage an essential part of an economic recovery,” Sklar notes. Minimum wage workers put their raises back into local businesses and the economy by buying needed goods and services.
“Increasing the national purchasing power is an underlying necessity of the day; Roosevelt said that then, and it is true today,” Sklar continues. “The minimum wage was important for recovery during the Great Depression, and it is important for economic recovery today during the worst economic crisis since the Great Depression.”
Sklar recently authored Let Justice Roll’s latest report, Raising the Minimum Wage in Hard Times.
According to the National Low Income Housing Coalition, no full-time worker earning the minimum wage can afford a one-bedroom apartment anywhere in the U.S. without spending more than 30 percent of their income on housing.
Twenty-four-year-old Ruth Escobedo, a restaurant worker in Fayetteville, Arkansas, is a single woman who moved from California to Arkansas looking for better living conditions. In an exclusive interview with the MSR, Escobedo, who mostly speaks Spanish, said through a translator, “Working at or below minimum wage limited my options to live day to day.”
The new minimum wage will help her, she noted, adding that her biggest obstacle is that “I have no one to turn to for help if I fall behind with my expenses.”
A low minimum wage reinforces a growing gap between the haves and the have-nots, Sklar points out. “You have a disapportionate number of workers who are people of color who are earning minimum wage. If the minimum wage is set too low, it really reinforces the discrimination, adds to it, and compounds it.
“Too much inequality really weakens the economy,” Sklar believes. “We have the worst inequality in terms of how much [income] is going to the top one percent of households. It is the worst it has been in any year except 1928, right on the eve of the Great Depression.”
Setting the minimum wage too low means more people are continually juggling which necessities to go without; it leads to more working people and families living in homeless shelters and cars and turning to overwhelmed food banks, wrote Sklar in her second report, Raise the Minimum Wage to $10 in 2010.
“This [minimum wage increase] will begin to get us on the real road to making the minimum wage a living wage,” Sklar surmises.
She argues that raising the minimum wage boosts consumer purchasing power and economic recovery and does not increase unemployment in good times or bad.
“The United States is the only advanced industrialized country where minimum wage workers have had their wages not keep up with inflation since the 1990s,” concludes Sklar. “You cannot build a strong 21st century economy with a 1950 wage floor.”
The entire report Raising the Minimum Wage in Hard Times is available on www.letjusticeroll.org.
Charles Hallman welcomes reader responses to challman@spokesman-record er.com, or read his blog: www.challman.wordpress.com.
© 2009 Minnesota Spokesman-Recorder
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