The Richmond Register

November 23, 2010

Raise the minimum wage

Boosting it would help our lowest-paid workers as well as the entire economy

By Tiffany Williams
Break The Chain

— When he was campaigning in 2008, President Barack Obama promised to raise the federal minimum wage, declaring “people who work full-time should not live in poverty.” Obama proposed raising it to $9.50 by 2011. That would merely adjust the minimum wage for inflation and restore its 1968 purchasing power.

Despite the very modest increase he proposed, neither the White House nor Congress has done anything to make it happen. In fact, at least three prominent Republican Senate nominees advocated abolishing this worker protection altogether as they fought tough races. It’s a good thing they all lost.

We need to raise the minimum wage, not eliminate it. Boosting the minimum wage would help our lowest-paid workers as well as the entire economy. According to the Economic Policy Institute, every dollar increase in wages for a worker on the bottom rung of the pay scale creates more than $3,500 in new spending after one year.

The minimum wage, established during the New Deal to provide a “minimum standard of living necessary for health, efficiency and general well-being,” is falling short. A person working full time at the $7.25 hourly minimum wage would earn $15,080 annually before taxes and deductions.

Consider a working single mom with two children: the federal poverty level for this family is $18,310. She could work full time and still earn $3,000 less than poverty wages.

While raising the federal minimum wage would only be a small step in helping low-income families (other income-boosting measures like the Earned Income Tax Credit and dependent care tax credits are proven to be more effective in fighting poverty), it’s nevertheless an important step for ensuring that workers in minimum and near-minimum wage jobs can better bridge the gap between their meager income and expenses.

In addition to raising the minimum wage and indexing it to inflation, the government must ensure that all workers get this fundamental labor protection. In 2009, approximately 3.6 million people earned the minimum wage or less. A stunning 2.6 million of those people legally earned less than the minimum wage because they’re excluded from the 1938 Fair Labor Standards Act.

Home health workers, who provide invaluable care to the elderly and disabled — allowing them to live with dignity in their own homes — are still excluded from minimum wage and overtime protections under the so-called “companionship exemption.”

Before the end of the year, the Department of Labor is slated to finally include reform to the companionship exemption in its regulatory agenda. Yet, home health workers are only one segment of the workforce that’s excluded in one way or another from meaningful labor protections that all workers need and deserve.

President Franklin D. Roosevelt’s New Deal responded to the Great Depression by establishing a safety net that could alleviate poverty and help the economy recover. The minimum wage, an essential labor right, is just as important now as it was then.

Some officials and newly elected lawmakers are now proposing dangerous “recovery” strategies, such as cutting taxes for the rich and slashing budgets for social services that will leave millions of Americans behind. While it’s reasonable to presume that it’s risky to boost wages during a recession, several economic studies indicate otherwise. Increasing the minimum wage, and thereby increasing purchasing power for the poorest Americans, actually helps the economy recover.

Raising the minimum wage would be a step to restoring dignity for millions of workers, enabling many ordinary working Americans to become part of the economic recovery rather than its collateral damage.

Tiffany Williams is the advocacy director for Break The Chain Campaign, a project of the Institute for Policy Studies. www.ips-dc.org.