Should the Minimum Wage be Raised?
Today (right now, even), hundreds of activists and protesters will head to Independence Mall to push for raising the minimum wage. The protest was organized by Fight For Philly. Whether or not you’re heading to the rally today, it helps to understand where the minimum wage is, and why many believe raising it is a necessity in today’s economy.
According to a National Employment Law Project report released this month, the current federal minimum wage, which stands at $7.25 per hour, is 30 percent lower, in terms of purchasing power, than it was in 1968. “On the other hand, many corporations are posting record-breaking profits,” the report notes. Corporate profits are back up to their pre-recession profit levels. And, as noted by the report, 66 percent of minimum wage workers are employed by these same large corporations and not small businesses.
If minimum wage had kept up with inflation over the last 40 years, it’d be $10.55 per hour. In Pennsylvania, the average worker earning minimum wage needs to work about 89 hours to afford the average apartment rent price.
Many of the largest companies that offer minimum wage have a presence in Philadelphia—including Wal Mmart, Yum! Brands (Pizza Hut, Taco Bell), Target, McDonald’s, Subway, ARAMARK and Starbucks. (For starters.) Pennsylvania’s minimum wage remains equal with the federal minimum wage, though several states’ wages exceed it, according to statistics from the Department of Labor. States have been allowed to set their own minimum wages since 1997, though workers affected are required to receive the higher salary.
Many on the right believe raising the minimum wage is bad for the economy. Specifically, they note that raising the minimum wage makes low-skilled and inexperienced workers “more expensive,” and, therefore, cuts out those jobs, shifting the work to others. Bronars Economics says teenage workers suffered the most in the latest downturn and raising the minimum wage “will make it much more difficult for new labor force entrants to find jobs.”
Others, like Republican presidential candidates Ron Paul and Michele Bachmann, have proposed abolishing the minimum wage altogether. The basic idea behind lowering or abolishing the minimum wage is that if workers cannot live on the wage they earn, they will leave the company at which they work for a higher-paying job—supply and demand, bitches, as they say. Similarly, a minimum wage job encourages low-skill workers to remain low skilled and never attempt to achieve any more than the minimum, the thinking goes.
In Philadelphia, a worker earning minimum wage with no days off, earns $15,080 per year, which is 82 percent of the federal HHS poverty guideline.
As noted by Brock Haussamen, of Raising the National Minimum Wage, a stronger minimum wage “helps reduce the gap in incomes between the poor and the wealthy in America.” He continues: “When such a gap becomes too wide, democratic values are threatened, because the freedoms to vote, speak out on public issues, and enjoy a stable and open society are not meaningful for those who are worn out by struggles for the basics of life.”
There is a small push going on right now to raise the minimum wage both federally and in the state of Pennsylvania. Bills have been offered by Northeast Philadelphia State Rep. Mark Cohen, which would bring the state’s wage up to at least $8.50. The now-out of sight Rep. Jesse Jackson, Jr. (D-Il) has pushed for a bill as recently as June that would have raised the federal wage to $10. As the New York Times noted about his push: “The argument in favor of raising the minimum wage as a form of economic stimulus goes to the heart of the debate in government and business spheres about whether more spending needs to be part of the prescription for strengthening the economy.”
Full report on the protest tomorrow.