Outten & Golden: Empowering Employees in the Workplace

Get a Raise Today? Minimum Wage Goes Up Again

July 24th, 2008 | Paula Brantner

Did you get a raise today?

You might have, if you work for the minimum wage, or live in a state where the state minimum wage is tied to an increase in the federal minimum wage. Today, the federal minimum wage rose to $6.55 an hour, from $5.85. This also trigged an increase in some states which have minimum wages higher than the federal law. I guess any increase is better than nothing, but it still isn’t worth more than it was in the 1950s when adjusted for inflation, and still isn’t enough to keep families out of poverty. Yet there are still those who wrongly insist that raising the minimum wage costs us jobs and interferes with free enterprise — go figure.

This is a great time to announce that Workplace Fairness has just added 50 new pages to our site, discussing the wage and hour laws in every state. (A big thank you goes to the law firm of Goldstein Demchak Baller Borden and Dardarian, who conducted the research, and Prof. Douglas Scherer, Vice President of the Workplace Fairness Board of Directors, who updated the research to reflect the current changes.) So if you’d like to see the minimum wage in your state, please go to our site’s page on filing a wage claim, and select your state for up-to-date information wherever you are.

As a number of commentators pointed out today, this increase is hardly enough. As one article points out, the minimum wage hike is “a drop in the bucket compared to the increases in costs, declining labor market, and declining household wealth that consumers have experienced in the past year.” (See MSNBC article.)

Jonathan Tasini at Huffington Post says,

[W]e should keep in mind that, at the grand new sum of $6.55 an hour, the minimum wage is a disgrace and a sad commentary about the state of our social safety net, the economy and our political system. If you do the math, it’s pretty stark. If you worked 40 hours a week, 52 weeks a year, you would earn $13,624. Not a single day off. No sick days. No health care. No pension.

(See Huffington Post article.) Tasini goes on to point out that

  • adjusted for inflation, the minimum wage today is what it was in the 1950s — more than half a century ago.
  • To really make ends meet at minimum wage pay, two people in a household have to work three full-time minimum wage jobs.

Sounds appealing, doesn’t it? And the minimum wage laws don’t require employers to provide health care. Or sick leave. Or vacation time. Or pensions. If you worked 40 hours a week for 52 weeks, without a vacation or extra day off, you’d earn $13,624, over $4,000 below the official poverty line for a family of three.

One way to keep the minimum wage from being held hostage by politics, and to insure regular increases, is to tie the minimum wage to inflation. Ten states already do so (Arizona, Colorado, Florida, Missouri, Montana, Nevada, Ohio, Oregon, Vermont, and Washington.) (See TomPaine.com article.) These states index their minimum wages to the federal government’s consumer price index, instead of the federal minimum wage, which until last year had not been raised since 1997. As Isaiah Poole of TomPaine.com tells us, fighting to index the minimum wage to inflation is the next big minimum wage battle likely to take place in the next administration.

Even after last year’s battle to raise the minimum wage, opponents still trot out the same old chestnuts: that raising the minimum wage costs low-income workers (and especially minority youth) jobs; that consumers will pay more for goods and services, and that African-American unemployment will go up. (See TomPaine.com article.) Yet report after report demonstrate just how flimsy these arguments are, giving the straw man a run for his money.

For example, the Institute for Research on Labor and Employment at UC-Berkeley recently released a study that shows that the effect of raising the minimum wage on teen employment is insignificant. (See IRLE report, although if you suffer from insomnia, you might want to consider starting to wade through this one, because it is filled with enough jargon to defeat even the most committed data geeks.)

It’s unfathomable why some people worry so much about minimum wage increases and not about economic developments like this one: Richest Americans See Their Income Share Grow. This article tells us that the richest 1% of Americans in 2006 garnered the highest share of the nation’s adjusted gross income for two decades, and possibly the highest since 1929. But yet we can’t keep those who collect minimum wage over the poverty line, forcing them to work multiple jobs just to support their families. Jonathan Tasini is right: it really is a disgrace that we even have to have this conversation.


More Information:

Department of Labor’s Minimum Wage Laws in the States
Economic Policy Institute: Minimum Wage Issue Guide

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