The Minimum Wage Increase Debate is Heating Up. What’s your Take (poll)?
The minimum wage increase debate is starting to heat up.
I highlighted the pros/cons of a federal minimum wage increase last year, after President Obama focused a spotlight on minimum wages in his State of the Union as he declared,
“Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour.”
A year has passed and many new developments have happened since:
- A July poll on increasing the minimum wage to $10.10 per hour found 80% of Americans support increasing the minimum to $10.10, including 92% of Democrats, 80% of independents, and 62% of Republicans – proving broad public support.
- 21 states and Washington DC now have minimum wages higher than the federal minimum wage and five states have passed increases in the past year. Last fall, California passed a law that will raise its minimum wage to $10 an hour by 2016, and New Jersey voters approved a constitutional amendment that raises the minimum wage to $8.25 per hour and ties it to inflation.
- Restaurant workers across the country have gone on strike and are pushing for $15/hr. wages (wishful thinking, but I give them credit for aiming high).
- The President once again made minimum wage a major focus in his 2014 State of the Union speech.
- The President then signed an executive order that will require businesses with new or renewed federal contracts to pay a minimum wage of $10.10 an hour by 2015. It’s predicted that this will impact about half a million workers.
But the minimum wage still sits at $7.25 per hour. A federal minimum wage hike requires Congressional voting approval.
To that end, Senate Democrats have introduced a bill, the Fair Minimum Wage Act (aka the Harkin-Miller Bill), that would increase the federal minimum wage from its current $7.25 an hour to:
- $8.20 on the first day of the third month after signing.
- $9.15 one year after
- $10.10 two years after
- Indexed to inflation, starting three years after, and each subsequent year
Those may seem like big jumps (and they are), but comparatively, the current rate has not kept up over the years. Had minimum wage been indexed to inflation over the past 40 years, it would currently be at $10.74/hr. Is there any doubt that today’s minimum wage is not a livable wage?
The impact of a raise to $10.10? It is estimated it would raise wages for 19 million Americans, many of whom are living in poverty.
The Case for Indexing the Minimum Wage
Looking back, the history of minimum wage increase frequency has been sporadic, at best:
- 1938: $0.25 (the first national minimum wage is set)
- 1956: $1.00
- 1974: $2.00
- 1980: $3.10
- 1990: $3.90
- 1997: $5.15
- 2007: $5.85
- 2008: $6.55
- 2009: $7.25 (last increase)
If you’re going to set a minimum wage, why not tie it to inflation so that you can keep it consistent? Most developed countries have done this already. And it avoids the political wrangling that happens every few years.
Speaking of those developed countries, what are their minimum wages set at (in USD)?
- Australia: $16.88/hr.
- Canada: $9.95/hr.
- France: $12.22/hr.
- UK: $10.02/hr.
- Japan: $8.32/hr.
The U.S. has lagged behind.
But guess what – it’s an election year.
The last round of minimum wage increases in 2007 (signed by President Bush) resulted in a bi-partisan 94-3 senate and 315-116 house approval when tax cuts were added in for small business.
Has the political climate changed so significantly that a similar proposal would not pass this time? It’s quite possible. And I’m thinking that we’re about to find out.
So… debate away in the comments on if you think the minimum wage should be increased and indexed and why or why not.
And here are two polls for good measure: