Raise the Wage!
Dan Brook
Minimum wage workers are being hit hard by low pay and rising costs. It’s been over 80 years since the United States introduced a minimum wage and over 10 years since it became a measly $7.25, while the cost of living has increased 18% since 2009 (and an even larger 26% for food and a punishing 65% for education). The minimum wage is a poverty wage, not keeping up with the economy — let alone corporate profits, stock prices, worker productivity, and CEO salaries — and it continues to lose purchasing power due to inflation.
If a minimum wage worker works 40 hours a week for the whole year — without any paid time off — she would earn a maximum gross income of $15,080 for her hard work. Most of these workers are women, many are people of color, some of whom have children. With an average one-bedroom apartment in America renting for about $1000 a month, many even live in cars. The minimum wage is a feminist and racial justice issue, in addition to an economic one.
Inequality in America is at record levels and about three-quarters (74%) of Americans are living paycheck to paycheck, struggling to make ends meet. Giving the working class a raise is not only morally right to reduce poverty and economic anxiety, it is also financially right, as it would boost our economy.
“When the minimum wage is too low”, according to Holly Sklar, CEO of Business for a Fair Minimum Wage, “it not only mires workers in poverty, it undermines the consumer demand at the heart of our economy.” States with higher minimum wages tend to have higher economic growth. Minimum wage earners and other low-income workers have unmet needs and wants and would therefore spend their higher earnings quickly and locally. This benefits their families and increases our economy, which is 70% dependent on consumer spending.
Studies show that increases in the minimum wage have not led to significant job loss or inflation, as many capitalists frantically claim, but do lead to higher morale, higher productivity, lower absenteeism, less turnover, lower recruitment costs, less anxiety, less poverty, less homelessness, less suicide, more spending by workers, and faster job growth. These results are good for the workplace and the country. A July 2019 report by the Congressional Budget Office concludes that the benefits of a $15 minimum wage far exceed the costs, as it would “increase the wages of millions of low-wage workers, increase the average incomes of low and lower-middle-income families, reduce poverty, shift money from corporate profits to the wages of low-wage workers, and reduce inequality.”
The bubble-up approach of giving more money to the lower class has about 700% more economic impact than the failed trickle-down approach of the last 40 years. Giving more money to the already wealthy, vainly hoping that the “invisible hand” of the “free market” will distribute the gains downward, only helps the rich, rarely the poor and middle class.
While rich people are more likely to invest or spend their gains on luxuries, the poor are much more likely to spend their extra money on unmet needs, spend it quickly, and do so locally. This would be good not only for those workers’ families, but also for local businesses.
I teach at a large public university, where too many of my working-class students of color experience hunger and homelessness. At San Jose State University, in Silicon Valley, over one in eight students (13.2%, or about 4,300 students) have experienced homelessness and about half of students are “sometimes skipping meals due to cost”. Higher minimum wages could make a dramatic difference in the day-to-day lives of students struggling to get a higher education by reducing food and housing insecurity.
Several states now either have or are on a path to $15 an hour. House Democrats passed a bill in July 2019 to slowly raise the federal minimum wage to $15 an hour, which nearly all Republicans opposed. The minimum wage should actually be considerably higher than that, perhaps (gradually) raised to $20 — $25 an hour and then indexed to inflation, as Rep. Rashida Tlaib suggests, perhaps with profit-sharing and decision-sharing, as Sen. Bernie Sanders suggests. In this 2020 presidential election campaign, consider supporting a candidate who supports raising the minimum wage to a living wage and giving workers more control over their lives!
Once a minimum wage worker himself, Dan Brook, PhD teaches sociology at San Jose State University, a working-class university in Silicon Valley.
