Every month more families are sacrificing their well-being in the face of forced decisions like: “Should I pay rent and the electrical bill this month, or should I buy food so that my children can eat?” Everyone needs a job to sustain his or her family, but when a worker only earns the minimum wage, one income is just not enough. The minimum wage is leaving many families below or very near the federal poverty level.
The imbalance between the buying power of the minimum wage and the actual cost of living has never been as extreme as today. While the cost of living has risen, the minimum wage has not. The last time the federal government raised the minimum wage was in 1996. It increased to $5.15 an hour, only $10,712 for a full-time worker, which is still below the federal poverty level for a family of three. If the federal government had hooked the minimum wage to inflation since 1968, it would currently be almost $9 an hour.
In a country as rich as the United States, workers should not be paid so little. The typical salary of CEOs of large businesses today is 431 times higher than the salary of a typical worker, which is $27,460 a year. In 1980, CEO pay was only 40 times as high. If the minimum wage had been raised at the same rate as that of CEOs, today it would be $23.03 an hour.
One reason why many fight against an increase is the belief that its additional cost that would destroy many small businesses. However, a study in New Jersey found this not to be the case, as a raise in the state minimum wage did not diminish the total number of jobs.
It is important, however, to recognize that there are vulnerable businesses such as the bodega on the corner or the neighborhood beauty salon. Some small businesses are hardly able to pay their owners and keep the business going. But the solution is not to just keep the low minimum wage that we have today. Instead, all businesses should pay their workers a living wage, and small businesses should be supported with government subsidies and tax credits. There needs to be more attention and help to the workers and the businesses in the community.
Congressional leaders and President George W. Bush oppose a minimum wage increase. In March, the U.S. Senate failed to pass a $2 hike. This is ironic, seeing that since 1997 (the last time the wage was raised), Congress has raised its own members’ salaries six times, up to more than $160,000 a year. These six raises in total equate to $28,500 annually-more than the yearly income of two minimum wage workers.
Some day perhaps this country will guarantee a living wage. I take hope from the successes of the Living Wage Movement. Fourteen states and Washington, D.C., have recognized that the federal minimum wage does not cover the cost of living and have implemented a state minimum wage higher than the federal. In addition, more than 100 cities, (including St. Louis, Minneapolis, Boston, Denver, Chicago, New Orleans, San Francisco, Sacramento and New York) have instituted living wage laws, prohibiting the city from doing business with any company that does not pay a sufficient salary for employees to live above the poverty line. The most recent hopeful example occurred in Florida last year, when a majority voted to raise the state minimum wage.
These successes reveal that people are able to change the system, state by state, city by city, battle by battle.
Gloribell Mota is the State Tax Education Coordinator for United for a Fair Economy (UFE). UFE is a Boston-based national, independent, nonpartisan organization that puts a spotlight on the dangers of growing income, wage and wealth inequality in the United States and coordinates action to reduce the gap.
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