Posts Tagged ‘economic inequality and minimum wage’

Raising the Minimum Wage is a Blow Against Economic Inequality – posted 3/15/2015 and published in the Concord Monitor on 3/21/2015

March 15, 2015 2 comments

The Republican-led Legislature in New Hampshire just killed all bills introduced this session aimed at raising the state’s minimum wage. Both the New Hampshire Senate and the House voted against a minimum wage increase. The bill sponsored by Senator Donna Soucy of Manchester would have raised the state’s minimum wage from $7.25 an hour to $8.25 an hour. It also included a further increase up to $10.00 an hour by 2018.

While the actions of the legislators were not surprising, I find the Legislature’s failure to raise the minimum wage reflected a callous disregard for the needs of low wage workers. In 2015, $7.25 an hour is not remotely survivable. There is a sad cluelessness about these votes and an inability to see that stagnant wages, including at the minimum wage level, are hurting our state and nation.

The arguments that have been raised against a minimum wage increase are stale, ahistorical, and not supported by persuasive evidence. They are exactly the same arguments opponents have been making for the last fifteen years. They were made by opponents before the minimum wage was raised to $7.25. I know because earlier in my life, when I worked as a lobbyist for New Hampshire Legal Assistance, I had worked on the issue.

There is nothing new here. Opponents always argue that a minimum wage increase will hurt business, especially small business. They assert, without strong evidence, that there will be job losses. They say that the way to help minimum wage workers is to lift up the economy generally. Supposedly, some gains will trickle down although how that will happen is never clearly spelled out.

We are supposed to ignore the reality that other states in New England have already raised their minimum wage and the sky did not fall.

The minimum wage in Massachusetts is $9.00 an hour. In Vermont and Connecticut, it is $9.15 an hour. Vermont has also approved legislation which increases the minimum to $9.60 in 2016, $10.00 in 2017 and $10.50 in 2018.

These other New England states still appear to be open for business. I have seen no reports of their imminent economic demise.

Since 2014, Connecticut, Delaware, Hawaii, Maryland, Michigan, Minnesota, West Virginia and the District of Columbia have all passed minimum wage increases. A 2013 law will increase California’s minimum wage to $10.00 by 2016.

Seattle and San Francisco are phasing in $15.00 an hour and Chicago is rising to $13.00. Los Angeles is raising the city’s minimum to $13.25 over 3 years.

There will always be Chicken Littles predicting doom. Chicken Littles do not bother to explain how the minimum wage can be raised dramatically in other locations without all the predicted dire consequences.

The biggest problem I have with the arguments against raising the minimum wage is their lack of context. Opponents do not situate the minimum wage issue inside the context of our increasing economic inequality. Minimum wage workers have been losing for a long time now. They are a grim part of the picture of the rich getting richer and the poor getting poorer.

Since I think context matters, let me outline how I see the minimum wage fitting into the bigger picture. Since 1979, the wages for the vast majority of American workers, including minimum wage workers, have either stagnated or declined. At the same time, wealth of the upper one percent has skyrocketed. The one percenters have claimed a larger and larger share of the economic pie. Consider that the average CEO makes 774 times more than a minimum wage worker and 331 times more than an average worker.

Over the last 35 years, that ratio has gotten more and more extreme.

I think wage stagnation has fueled our economic inequality and minimum wage workers are a prime example. When the minimum wage does not increase for an extended period, its inflation-adjusted value erodes. It has been estimated that since 1968 the minimum wage has lost more than 40 % of its value to inflation. If it had kept pace with inflation, the minimum wage would now be around $10.38 an hour.

Taking no steps to raise the minimum wage guarantees a continuation and exacerbation of economic inequality. Workers need added income just to keep up with the costs of rent, food, heat, child care and higher education to name some typical expenses.

I would acknowledge there are more complexities than I am addressing but I stand by my argument for higher wages. Mass purchasing power can contribute to a healthier economy. Our lopsided distribution of wealth actually restricts markets.

As presidential candidates start popping up in New Hampshire like spring flowers (or weeds), they all need to be asked where they stand on the minimum wage. They also should be asked about the stagnation and decline of wages which have been central to our economic inequality.

A 2014 poll conducted by Hart Research Associates shows that 75% of Americans – including 53% of Republicans – support an increase in the federal minimum wage to $12.50 by 2020. 63% of Americans supported an even greater increase in the minimum wage to $15.00 by 2020. Gary Molyneux of Hart Research had this to say about the poll:

“The findings here are very clear: Americans, regardless of region, socioeconomic status or demographic distinction, strongly favor a very significant increase in the federal minimum wage.”

In spite of our Legislature’s short-sighted action, you can count on this issue returning.