In his State of the Union address on January 28, 2014, President Barack Obama called on Congress to raise the minimum wage to $10.10 an hour. As part of what he termed a “year of action,” the President also made it clear that even as he pressed Congress to act, states, cities, counties and businesses could act independently from Congress. Many cities and counties have answered the call, and the President has taken action on his own to raise the minimum wage for workers on new federal contracts. In fact, in 2013, the City of Gary raised the minimum salary of full-time workers to $23,000 per year or $11.05 per hour. Collectively, these efforts will result in higher wages for millions of Americans across the country. They also illustrate how broad-based the support for a higher minimum wage is.
In real terms, the minimum wage is now less than it was in 1981. The federal minimum wage is now only about 36 percent of the average wage. Raising the minimum wage would benefit about 28 million workers – with more than 19 million who now earn less than $10.10 benefiting directly, and an additional 9 million low-wage workers benefiting from the “ripple effect” of an increase. Because low-wage workers are most likely to spend the additional money they earn, increasing their wages would help to increase aggregate demand and strengthen the economy today. Currently, a family of four with one full-time worker earning the $7.25 minimum wage is 17 percent below the poverty line, including tax credits. A $10.10 minimum wage would raise that family of four to above the poverty line – and in total, would lift an estimated 2 million families out of poverty.
While all of these statistics are important, the most compelling case for raising the minimum wage is to provide viable alternatives to those who have been marginalized in society. Too often, individuals who want to give an honest day’s work for an honest day’s pay are demoralized when they see the results on pay day.
We require parents to pay child support and we should, but parents who work in minimum wage jobs take home less money than they would receive on public assistance. Additionally, those who find themselves in the criminal justice system often cite their inability to gain employment as a force behind their decision to venture outside of the law. While that does not excuse their behavior, it is important for all members of society to have options. Our parents’ generation was able to support families by working in steel and other industries. We appear to be on a track to be the first generation to leave our children a lower standard of living than we had.
While raising the minimum wage may not be a magic wand, it can raise millions of Americans out of poverty and, in the process, provide an overall boost for the economy. It can also send a message to those who exist in poverty while working every day that their labor is not in vain.
Let’s call on Congress to raise the minimum wage to $10.10 today!