While Republicans have been busy the past 4 years in the US House of Representatives, state governments have been busy drafting legislation that would raise the minimum wage above the Federal minimum of $7.25.
For the past several months, workers in the service industry have staged one day walk-outs to protest low wages. While not being cited directly, it is hard to imagine such a push by state governments if not for the discontent throughout the state.
When the Great Recession hit at its hardest in 2008, over 750,000 people were losing their job every month. Many manufacturing businesses closed their doors. A majority of the larger companies opted to take their business outside of our boarders. This fueled the unemployment crisis even further.
While the job market today is looking up, and we have month after month of job growth, it is curious that so many people are still struggling.
What is being overlooked is the quality of the jobs being created. The largest job growth sector is the service industry. Unfortunately, those jobs mean part-time, low-wages and no benefits. The image of the high-school kid flipping burgers at McDonalds has changed to a 30-year old mother of two trying to make ends meet. The protest over low wages should not be a surprise, but rather that it took so long to happen.
In response to the inaction of Congress, many state governments have taken it upon themselves to raise the minimum wage for their citizens. So-long that the minimum wage does not fall below the federal minimum, a state can set their wage at whatever number they wish. With the added attention to the growing income disparity, that is exactly what some are doing.
The minimum wage will rise in 13 states this week, and as many as 11 states and Washington, D.C., are expected to consider increases in 2014, according to the National Employment Law Project. Approval is likely in more than half of the 11, says NELP policy analyst Jack Temple.
On January 1, 2014, the minimum wage in 21 states will be higher than the federal minimum wage, with even more on the horizon.
Connecticut, New York, New Jersey and Rhode Island legislatures voted to raise the minimum hourly wage by as much as $1, to $8 to $8.70, by Wednesday. In California, a $1 increase to $9 is scheduled July 1. Smaller automatic increases tied to inflation will take effect in nine other states: Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont and Washington.
Meanwhile, states such as Massachusetts, New Hampshire, Maryland, Minnesota and South Dakota plan to weigh minimum-wage hikes next year through legislation or ballot initiatives.
A complete breakdown is as follow:
Arizona $7.90, Colorado $8.00, Connecticut $8.70, Florida $7.93, Missouri $7.50, Montana $7.90, New Jersey $8.25, New York $8.00, Ohio $7.95, Oregon $9.10, Rhode Island $8.00, Vermont $8.73, Washington $9.32.
The minimum wage increases are a big victory for the working person. Those on the Right try to dismiss the protestors as wanting simply too much for their job. However, the workers are not asking for a $15 an hour wage for themselves only. They are asking for a minimum wage increase across the board, so that every worker can have dignity in their work.
Who is to judge on what constitutes “hard work?” Is hard work an executive that sits in an air-conditioned office signing papers all day or is it a single mother of three that is working 3 part-time jobs just to put food on the table? Nobody who works for a living should have to worry about where their next meal is going to come from or if they will be able to pay their utilities. Especially in light of the growing wealth of the rich in comparison to the decreased buying power of the middle- and lower-class.
The most common argument against raising the minimum wage is that the price of everything would go up. First off, the price of everything has gone up without an increase in the minimum wage. The cost of something today, is more than it was last year and is more than it was 10 years ago. Unfortunately, workers wages are at an all-time low, while corporate profits are hitting all-time highs.
Secondly, a recent studies shed some light on wage increases in relation to the costs to consumers. One such review looked at McDonalds and what kind of increase it would cause for the Big Mac. The study was not scientific, but rather used information on the amount of employees, how many Big Macs are sold in a year, etc. It was found that if the average wage was raised from $7.25 an hour to $15 an hour, the price of a Big Mac would raise just 68¢.
Even if the math is incorrect, and the price would raise a $1, would you not be willing to pay an extra dollar if it meant the person serving you was able to make a living? The fact is, however, that 68¢ may be an overestimate, according to a letter signed by 100 economists.
Another estimate suggests the price of a Big Mac would jump 5 cents, or 1 percent, if the minimum wage was raised to $10.50, according to a letter signed by 100 economists in favor of raising the U.S. minimum wage.
“McDonald’s could cover fully half of the cost increase by raising the price of a Big Mac, on average, from $4 to $4.05,” the letter said. “The remaining half of the adjustment could come through small productivity gains or a slightly more equal distribution of companies’ total revenues.”
A similar look at Wal-Mart found much of the same. When Washington, D.C. was considering a minimum wage of $12.50 for “big box” retailers, Walmart stated that it would drive prices up for consumers. However, a 2011 study by CUNY’s Stephanie Luce and University of California Berkeley’s Ken Jacobs and Dave Graham-Squire.
“Even if Wal-Mart decided to pass 100 percent of the cost on to customers, store prices would still only increase by 1.1%.”
Because the average customer spends $1,200 per year, that would amount to about $12 annually.
A Wal-Mart spokesperson said that anyone who thought price increases would be small had ”limited understanding of how a business operates.”
Perhaps it is Wal-Mart that does not understand how a business operates. One need to look no further than Costco for how a business can offer competitive prices, a trustworthy product, excellent customer services, while not taking advantage of their employees. Not only does Costco pay their employees a livable wage, they offer an extensive healthcare package, a retirement plan, among other benefits. Further, the CEO does not make any more than 10 times what the lowest-paid employee makes. For anybody who has shopped at Costco, you can see the difference in the employees compared to a Wal-Mart. There is pride in what they do because they understand their employer cares about them.
States are getting the message loud and clear, and are being forced to respond. There is a common adage that, “all politics is local.” At the end of the day, politicians must answer to their constituents. If the US Senators and Representatives cannot take care of their people, than the State must. While those in states that are not increasing wages may not benefit, their representatives will have to come election time.
Campaigns to raise the minimum wage, like the one that twins and online activists Rafael and Omar Rivero are conducting, are immensely important to getting the message out. There is one party openly rooting for the minimum wage increase, and one part rooting against. There is a lot riding on the 2014 mid-term election, but none more important than this issue.
David Pakman discusses the 13 states increasing their minimum wage.
By Salvatore Aversa
This post originally appeared at Occupy Democrats