Outten & Golden: Empowering Employees in the Workplace

Minimum Wage: Not Just for Kids

July 31st, 2012 | Tula Connell

Credit: Joe Kekeris

Credit: Joe Kekeris

As Congress considers raising the nation’s minimum wage, it’s a good time to point out that it’s not just for teens earning pocket money. At $7.25 an hour, the current minimum wage hasn’t been raised for three years. Proposals in both the House and Senate would increase the federal minimum wage to $9.80 by July 1, 2014.

A report by the Economic Policy Institute (EPI) points out that

87.9 percent of those affected nationally by increasing the federal minimum wage to $9.80 are 20 years of age and older. The share of those affected who are 20 or older varies by state, from a low of 77.1 percent in Massachusetts to a high of 92.4 percent in Florida (and 93.9 percent in the District of Columbia).

That means people trying to support themselves and their families are being paid an hourly wage that right now has less buying power than in 1997. Further, writes Holly Sklar, director of Business for a Fair Minimum Wage:

At $7.25 an hour, today’s full-time minimum wage retail worker, security guard, child care worker or health aide makes just $15,080 a year. Last century’s 1968 minimum wage worker made $21,944 a year, adjusted for inflation.

Take note of which House and Senate members scream against raising the minimum wage. They’re likely the same ones funded by corporate giants whose CEOs last year got a 16 percent raise—with an average compensation of $10.5 million.

The AFL-CIO is urging Congress to pass the Fair Minimum Wage Act of 2012 (read letter here) as are noted economists.

This blog originally appeared in AFL-CIO on July 30, 2012. Reprinted with permission.

About the Author: Tula Connell got her first union card while she worked her way through college as a banquet bartender for the Pfister Hotel in Milwaukee they were represented by a hotel and restaurant local union (the names of the national unions were different then than they are now). With a background in journalism (covering bull roping in Texas and school boards in Virginia) she started working in the labor movement in 1991. Beginning as a writer for SEIU (and OPEIU member), she now blogs under the title of AFL-CIO managing editor.

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One Response to “Minimum Wage: Not Just for Kids”

  1. Rob Bright, Esq. Says:

    “an hourly wage that right now has less buying power than in 1997.”

    And why is that? Supply and demand. Treasury and the Fed keeps printing money, thereby reducing the value of each dollar of that money. The more of anything there is, the lower its value. It’s been going on since 1913 – and the value of the dollar is less than 1/20 what it was in 1913. It’s entirely predictable, economically speaking.

    A question that you should address is:

    “What is the value to a particular company of a particular worker?”

    For example, if worker “A” only brings in $5.00 per hour in profit/income to the company, then is that company going to hire the worker if the company has to pay $9.80/hr..? Likely not. The company will simply not hire another worker and either (1) cut corners or (2) ask a current worker to do the task.

    If you were unemployed, would you rather have a job at $6/hr (and acquire valuable experience which often leads to a better job) or have no job and no experience at all?

    Further, if we are not going to consider what each worker’s benefit to the company is in the course of their work, then why not just raise the minimum wage to something everyone can live very comfortably on… say $100.00/hr. Then everyone in the country could be wealthy – right up until each company filed for bankruptcy because their janitorial staff was making $200,000 per year.

    The fact of the matter is that not every job brings 200k in profit to the company in order to offset the wages at that rate.

    The position of people who advocate raising the minimum wage is that every job is worth “x” dollars per hour, “x” being whatever minimum wage they are proposing. That is not necessarily true.

    Here in small town SE Ohio and W.V., legal secretaries often make less than $9.80/hr – and that’s because the solo practitioner firm may have a gross of $100k per year – sometimes even less than that. When you take out overhead and a 20k salary for the secretary, the attorney is likely making $50,000/yr – which is hardly getting wealthy.

    If the firm can only bring in 100k per year gross, then paying a secretary $15/hr is hardly a reasonable proposition. If she were a REALLY good secretary with paralegal type skills and the firm started bringing in 150k per year after she was hired, then she’s highly likely to get a raise.

    That’s another reason FEDERAL minimum wage laws are untenable and should be replaced with either (1) nothing; or (2) local minimum wage laws.

    Obviously, a person will have significant difficulty living on $9 per hour in a big city (I attended law school in D.C., so I’m rather aware of cost of living differences).

    On the other hand, lots of people in this area manage to have food, clothing, shelter, car and cable TV on that amount of money. They’re still “poor” by liberal standards, but they’re not starving (as mentioned, they often have cable TV) – which is what would likely happen to the person in D.C. making $9/hr without government assistance.

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