Raising the Minimum Wage

Congress values own paychecks more than workers



By Holly Sklar
Distributed by Knight Ridder/Tribune Information Services
6/20/06
Copyright © 2006 Holly Sklar
[Blogged with permission.]

Members of Congress like to talk about values. They sure don't mean the Golden Rule: "Do unto others as you would have them do unto you."

While more and more hardworking Americans struggle to make ends meet, Congress showed what it really values -- the rising value of congressional pay.

The House refused to block the $3,300 "cost of living adjustment" that will raise congressional pay on Jan. 1 to $168,500 -- not counting great health benefits, pensions and perks.

Congressional pay raises between 1997 and 2007 will add up to $34,900. That's more than average workers make in a year.

It would take more than three workers to make $34,900 at the minimum wage stuck at $5.15 an hour -- just $10,712 a year -- since Sept. 1, 1997.

Full-time workers at minimum wage make less than $900 a month to pay rent, food, healthcare, gas and everything else. No wonder the U.S. Conference of Mayors Hunger and Homelessness Survey found that 40 percent of adults requesting emergency food assistance were employed, as were 15 percent of the homeless.

Childcare workers and security guards struggle to care for their own children. EMTs and health care aides can't afford to take sick days.

Yet Congress has given itself raise after raise, while giving none to minimum wage workers.

As Adam Smith himself wrote in "The Wealth of Nations,"
"It is but equity … that those who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labor as to be themselves tolerably well fed, clothed, and lodged."

Today's minimum wage workers have less buying power than minimum wage workers did back in 1950 when Harry Truman was president. The 1950 minimum wage is $6.30 in 2006 dollars, according to the Bureau of Labor Statistics Inflation Calculator.

It would take $9.31 today to match the value of the minimum wage of 1968. It takes nearly two minimum wage workers to make what one worker made four decades ago.

The minimum wage has become a poverty wage instead of an anti-poverty wage. This has ripple effects far beyond minimum wage workers and their families.

The minimum wage sets the wage floor. When the minimum wage sinks, it drags down wages for workers up the pay scale as well. Between 1968 and 2005, worker productivity rose 111 percent, but the average hourly wage fell 5 percent, adjusting for inflation, and the minimum wage fell 43 percent.

The inflation-adjusted earnings of college-educated workers have fallen since 2000. Poverty rates are higher now than in the 1970s and we have an increasingly low-wage workforce instead of a growing middle class.

Contrary to myth, raising the minimum wage helps business and boosts the economy. We had high economic growth, low inflation, low unemployment and declining poverty rates after the last minimum wage hikes in 1996 and 1997.

States that have raised their minimum wages above the increasingly inadequate $5.15 federal level have had better employment trends than the other states, including for retail businesses and small businesses.

Higher wages increase consumer purchasing power, reduce costly employee turnover, and improve productivity and the quality of products and services.

For example, In-N-Out Burger, home of the nation's first drive-through hamburger stand, ranks first nationwide among fast food chains in overall excellence, food flavor, quality and customer service. Their entry-level wage of $9 is nearly $4 above the federal minimum wage.

Small business owner Malcolm Davis wrote in a letter to the editor, "My lowest-paid employee makes $8 per hour. … If I can find a way to be fair with my employees in rural Eastern North Carolina, why can't our government?"

A recent survey by the National Consumers League and Fleishman-Hillard Communications found that 76 percent of American consumers believe "how well a company treats/pays employees influences what they buy." Consumers said "commitment to employees" is the strongest proof of corporate responsibility and it is important for companies to ensure that workers "are paid a living wage."

A job should keep you out of poverty, not keep you in it.

It's time for Congress to stop their luxury raises, and raise the minimum wage to a living wage.


Holly Sklar is co-author of "A Just Minimum Wage: Good for Workers, Business and Our Future" (Let Justice Roll) and "Raise the Floor: Wages and Policies That Work for All Of Us."


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