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We All Need a Higher Minimum Wage

If President Obama truly believes in strengthening the middle class, he will revisit legislation to raise the minimum wage so that people can start to invest in the country again.

Election’s over, the good guy won, so what now for working people? Labor’s wish list for our re-elected president and the new Congress is long, but certainly the most basic item is raising the pay of our poorest workers by raising the minimum wage.

About four million workers have been living in poverty or near-poverty at the current minimum of $7.25 an hour ÐÊ$15,000 a year at most before taxes and other deductions. And that’s assuming the workers manage to find full time, year-round jobs.

There’s been no lack of congressional bills to raise the minimum since it was last raised in 2007, the latest introduced this year by two Democrats, Sen. Tom Harkin of Iowa and Rep. George Miller of California. Their bill would increase the rate to $9.80 an hour by 2014, index the rate to rise automatically with any rise in the cost of living after that, and set the rate for tipped workers at 70 percent of the minimum.

Raising the minimum would help us all. The National Employment Law Project (NELP) estimates that increased consumer spending generated by the proposed raise would create the equivalent of more than 100,000 full time jobs. Other estimates indicate that every dollar increase in wages for workers at the minimum would create more than $3,000 in new spending after a year.

It’s often argued by those opposing a raise that a raise would be mainly a burden on small businesses, but NELP found that more than two-thirds of minimum wage workers are employed by large companies. There’s no doubt many of the larger employers could easily afford a raise, especially since, as NELP notes, most of them are fully recovered from the Great Recession and are back making strong profits.

It’s not surprising that the opposition to a raise is led by corporate employers, but how does the general public feel about raising the minimum? A poll conducted in February of this year showed that nearly three-fourths of likely voters nationwide would support raising the federal minimum to $10 an hour and indexing it to inflation.

States, counties and cities can set their own minimums, as long as they at least equal the federal rate, and voters in 18 states and several cities have by substantial margins approved minimums greater than the federal rate.

In 2004 and 2006, state wage rates above the federal minimum were approved by voters in Arizona, Colorado, Florida, Missouri, Montana, Nevada and Ohio. As for a federal raise, President Obama pledged during his initial election campaign in 2008 that he’d seek an increase to $9.50 an hour. But he did not do that, and said nothing about a raise during his re-election campaign this year.

Meanwhile, however, voters have recently raised the minimum rates in three cities, Albuquerque, San Jose and Long Beach. NELP’s executive director, Christine Owens, hails the raises as a “major victory for workers.”

The rate in Albuquerque jumped a whole dollar to $8.50 an hour and will automatically adjust to future increases in the cost of living. NELP calculates that will affect an estimated 40,000 workers, generate $18 million in new consumer spending and support creation of 160 new jobs as businesses expand to meet the increased demand.

The minimum wage in San Jose rose from $8 an hour, the current California rate, to $10. NELP says that should raise the pay of almost one-fifth of the citywide workforce, boost consumer spending by $190 million and support creation of 200 new full-time jobs.

The raise in Long Beach does not apply to all workers there, but does set a higher minimum for hotel workers, who are essential to the success of the city’s booming hospitality industry. Their minimum pay will rise to $13 an hour from an average of only $10. They will also get five paid sick leave days per year.

City minimums in California and elsewhere in the country range up to San Francisco’s rate that will reach $10.55 an hour next year.

NELP’s Owens notes that “with growing numbers of working people relying on low-wage jobs to make ends meet, the voters recognize that raising the minimum wage fulfills our basic obligation to ensure that work provides a path out of poverty. Higher wages for the lowest-paid workers in our economy will promote upward economic mobility and help accelerate post-recession recovery.”

It’s time for the president and Congress to recognize that vital truth.