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There are some policies that are pretty much no-brainers. We all agree that the Food and Drug Administration should keep dangerous drugs off the market. We all agree that the government should provide police and fire protection. And, we pretty much all agree that workers should be able to count on at least some minimal pay for a day’s work.
The minimum wage is non-controversial. The vast majority of people across the political spectrum support the minimum wage. In fact, one of the big accomplishments of the Gingrich Congress in 1996 was a 22 percent increase in the minimum wage. The only real issue is how high it should be. There are good reasons for believing that the minimum wage should be considerably higher than it is today.
At the current rate of $7.25 an hour, a full-time, year-round worker would have gross pay of less than $15,000 a year. This is less than half of what the average Fortune 500 CEO makes in a day. It would be hard enough for a single person to survive on this income, so imagine trying to support a child or even two on this money. And close to 40 percent of the workers who would be benefited by a minimum wage increase have kids.
The counter-argument against raising the minimum wage is that it would actually hurt the people we are trying to help by reducing employment. There is little basis for this claim. The impact of the minimum wage on employment is one of the most heavily researched topics in economics.
Most recent research finds that it has no impact on employment. Even the research that finds job loss shows that the effect is small, suggesting that a 20 percent increase in the minimum wage may reduce employment of young people by around 2 to 3 percent.
While it’s not desirable to see anyone lose their job, it is important to remember the character of these jobs. They tend to be high turnover jobs that people leave after working relatively short periods of time. Job loss in this context is not likely to mean people being fired, rather, it means that firms might be somewhat slower to hire. This would cause a typical low-wage worker to spend somewhat longer between jobs.
The dollars and cents might mean, for example, that a typical low-wage worker ends up working 2 percent fewer hours in a year, but they take home 20 percent more pay for each hour that they work. This nets out to an increase in pay of 18 percent, a deal that most workers would likely consider pretty good.
In terms of whether we can afford a higher minimum wage, it is worth remembering that the minimum wage in 1968 would be almost $9.00 an hour in today’s dollars. In spite of the high minimum wage in the late 1960s, the job creators of that period pushed the unemployment rate down to 3.0 percent.
And the country has not gotten poorer in the last four and a half decades. We have policy wonks running around Washington who seem to think that cell phones, computers, the Internet, and all other innovations of the past four decades that we now take for granted have reduced our standard of living.
This is of course nonsense. Productivity has increased by more than 120 percent since the late 1960s. If the minimum wage had kept step with productivity growth and inflation, it would be over $20 an hour today.
The real problem in our economy today is not a lack of productivity. The problem is that the gains from productivity growth have not been broadly shared. The wealthy have used their power to rig the deck so that most of the benefits of growth have gone to those at the top. They have used their control of trade policy, the Federal Reserve Board and more recently the Wall Street bailout, to ensure that those at the top have gained at the expense of everyone else.
A higher minimum wage is an important step toward reversing this rigging. It should not be too much to expect that workers today should get at least as much as they did 45 years ago and perhaps some dividend to allow them to share in the benefits of economic growth over this period. A minimum wage of $10 an hour would be a big step in the right direction.
Truthout Is Preparing to Meet Trump’s Agenda With Resistance at Every Turn
Dear Truthout Community,
If you feel rage, despondency, confusion and deep fear today, you are not alone. We’re feeling it too. We are heartsick. Facing down Trump’s fascist agenda, we are desperately worried about the most vulnerable people among us, including our loved ones and everyone in the Truthout community, and our minds are racing a million miles a minute to try to map out all that needs to be done.
We must give ourselves space to grieve and feel our fear, feel our rage, and keep in the forefront of our mind the stark truth that millions of real human lives are on the line. And simultaneously, we’ve got to get to work, take stock of our resources, and prepare to throw ourselves full force into the movement.
Journalism is a linchpin of that movement. Even as we are reeling, we’re summoning up all the energy we can to face down what’s coming, because we know that one of the sharpest weapons against fascism is publishing the truth.
There are many terrifying planks to the Trump agenda, and we plan to devote ourselves to reporting thoroughly on each one and, crucially, covering the movements resisting them. We also recognize that Trump is a dire threat to journalism itself, and that we must take this seriously from the outset.
After the election, the four of us sat down to have some hard but necessary conversations about Truthout under a Trump presidency. How would we defend our publication from an avalanche of far right lawsuits that seek to bankrupt us? How would we keep our reporters safe if they need to cover outbreaks of political violence, or if they are targeted by authorities? How will we urgently produce the practical analysis, tools and movement coverage that you need right now — breaking through our normal routines to meet a terrifying moment in ways that best serve you?
It will be a tough, scary four years to produce social justice-driven journalism. We need to deliver news, strategy, liberatory ideas, tools and movement-sparking solutions with a force that we never have had to before. And at the same time, we desperately need to protect our ability to do so.
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We promise we will kick into an even higher gear to give you truthful news that cuts against the disinformation and vitriol and hate and violence. We promise to publish analyses that will serve the needs of the movements we all rely on to survive the next four years, and even build for the future. We promise to be responsive, to recognize you as members of our community with a vital stake and voice in this work.
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With love, rage, and solidarity,
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