It’s been nearly six months since President Obama’s State of the Union Address in which he called upon Congress to raise the federal minimum wage, and the debate in our nation’s capital is still stalled. The increase he proposed would raise the wage rate from $7.25 an hour to $10.10.
While the federal minimum wage has been raised 23 separate times in our history, under both Republican and Democratic leadership, the political process is at a standstill as the two parties remain divided on the issue.
In response to the Great Depression, President Franklin D. Roosevelt signed the first minimum wage — 25 cents per hour — into law in 1938. Included in his package to establish fair labor standards, he cited decreasing poverty and stimulating the economy as key reasons for the change.
While the current Congress struggles to reach a consensus, the reasons to support a boost in the federal wage requirement continue to add up.
Today, a full-time minimum wage worker earns approximately $15,000 a year. Consider the people who are forced to build a life for themselves (and often their families) on that income. This puts their real wages just below the poverty line for a family of two and well under the poverty line for families larger than that. According to the White House Council of Economic Advisers, more than 28 million workers would benefit from raising the federal minimum wage.
The fact that many minimum wage workers never reach full-time status should also be considered. To avoid paying for additional benefits, many employers schedule their low-wage workers for under 40 hours a week. Paying these workers a higher wage for the hours they are allowed to work would be the least they can do.
It is also no secret that $7.25 will not pay for what it used to. The real value (adjusted for inflation) of the minimum wage hit its peak in 1968 when a full-time worker could earn $20,000 per year in 2013 dollars. Unfortunately, it has fallen by a third since then and shows no signs of stopping. The minimum wage should be periodically raised in order to keep incomes on par with the rate of inflation; otherwise, a person’s real purchasing power will suffer.
For this reason, 21 states have already taken action to raise the minimum wage within their borders. However, Kansas (along with a host of other states) is nowhere near taking up the issue in the state legislature. Instead, federal policy will be required to address the problem in our state and around the country.
The argument that raising the minimum wage would put a strain on certain businesses carries validity, and not all companies will respond like Parkland Health and Hospital System in Dallas who cut executive bonuses in order to increase their internal minimum to $10.25 per hour. However, maintaining the current minimum wage alone would not keep most of these entities afloat, nor would it counteract the decades-long trend of labor-saving capital investments.
What it boils down to is whether increases in the real minimum wage were accompanied by increases in the unemployment rate. Data comparing the two numbers over the past 60 years show that this is simply not the case.
The business community can and has survived modest increases in the minimum wage, and they may even benefit from the increased purchasing power it provides to low-income families.
Theo Stavropoulos is a recent graduate in political science. Please send comments to opinion@kstatecollegian.com.
