Raise the Minimum

By most consumer standards, America has made marked improvements in the past half-century. For starters, with a slew of technological innovations from the Post-It Note to the boom of information technology, America is materially far better off than it was in the age of The Beatles and the Trans Am. And despite the ongoing effects of the so-called Great Recession, American real GDP today stands much higher than it did then. Yet somehow in 2013, about 15 million American workers—those earning the $7.25 minimum wage—receive a lower real wage than they did in 1968. Some, accounting for growth in labor productivity, consider the real wage decrease much greater. Naturally, then, President Obama’s endorsement of the $10.10 minimum wage is a positive move toward income equality.

President Obama isn’t the only one calling for minimum wage increases either. In fact, in a July poll by Hart Research Associates, 80 percent of respondents—including 62 percent of Republicans and 79 percent of those earning over $100,000 per year—supported increasing the minimum wage to $10.10 per hour.  Not only did the respondents support an increase in the minimum wage, but nearly three in four also considered raising the minimum wage an “important priority” for Congress to address in the coming year. So as the Senate begins to push for minimum wage reform, the American public supports a sustainable—not “starvation”—wage for its minimum wage workers.

This push for a fair minimum wage comes as low-income jobs constitute the majority of new jobs in the US economy. With data showing that an increasing number of minimum wage workers rely on these jobs as a main source of income, are in their 30s and 40s, and have received secondary or post-secondary education, the belief that minimum wage workers are predominantly teenagers—not main breadwinners—is crumbling. An increase in the minimum wage would not merely fuel the hobbies—or vices—of some suburban teens but instead provide much-needed income security to a growing number of single-earner households whose low wages place them under the federal poverty line.

But what of those who argue that a minimum wage increase would actually hurt minimum wage workers? Although the distortive effects of an increase remain uncertain, many experts have come out in support of a higher minimum wage. In a recent poll of economists by the University of Chicago, a plurality of economists agreed that the increased benefits to minimum wage earners would outweigh the “distortionary costs” of increasing the minimum wage to $9. This consensus is corroborated by recent economic studies, from a 2011 paper connecting increases in the minimum wage with increased domestic consumer spending to research finding no relationship between small minimum wage increases and unemployment. Whatever the “distortionary costs” of an increase in the minimum wage, there is a wealth of evidence attesting to the poverty-reducing effects of increasing the minimum wage.

As President Obama and Congress work to increase the federal minimum wage, 21 states have already taken action to bring the minimum wage above its federal minimum. From New Jersey’s referendum in favor of an $8.25 minimum indexed to inflation to California’s planned increase, state legislatures and voters are working ahead of Congress to provide sustainable incomes to all workers. While the states have led the charge toward a higher minimum wage, we stand by President Obama in hoping that Congress will soon provide a fair wage for every American.