The Move Towards A Fair Minimum Wage
GRAPH OF THE DAY
FEDERAL MINIMUM WAGE, 1938-2012. PEW, December 4, 2013
Incorporating circumstances from his own background to depict America’s growing income inequality as “the defining issue of our time,” the President, in a speech focused on the economy, called for raising the minimum wage and strengthening the social safety net. Ezra Klein describes this speech as the best economic speech the President has ever given. However, John Cassidy faults it for lacking ambition – calling the President’s policy prescriptions “small-bore measures.” Zachary Goldfarb views the speech as a road map for how the President intends to spend his final 37 months in office – concurring, on this point, with the Editors of the New York Times. The full transcript of the President’s speech is here.
In 1938, President Franklin Roosevelt sent the Fair Labor Standards Act to Congress along with a message that America should provide working men and women “a fair day’s pay for a fair day’s work.” In a story that went viral days before Thanksgiving, a Wal-Mart store held a holiday canned food drive – for its own underpaid employees. In a recent poll from the Washington Post, six out of ten workers admitted worrying they will lose their jobs.
Today, the federal minimum wage is $7.25 per hour or $15,000 per year for full-time work; but the Harkin-Miller Bill, the Fair Minimum Wage Act, currently pending in Congress, would raise the federal minimum wage to $10.10 an hour and link it to the Consumer Price Index. President Obama strongly supports raising the minimum wage; and, according to recent polls by both Hart Research and Gallup, so does the American public. However, the Harkin-Miller Bill materializes just nine months after House Republicans unanimously voted down a similar bill and pundits of every stripe agree minimum wage legislation stands no chance of passing in Congress.
During the last 12 months, New York, Rhode Island, New Jersey, Connecticut and California passed measures to raise the minimum wage. California boosts the minimum wage to $10 per hour by 2016. The movement to raise the minimum wage also is trickling down to local communities. Last week, the D.C. City Council unanimously voted to increase the minimum wage to $11.50. Citizens residing near the Seattle-Tacoma International Airport voted last month to set the minimum wage rate at $15 an hour for airport and hotel workers. Read Bloomberg’s report on how the states are taking the lead on wage related issues, here. The odds of state initiatives duplicating federal action on the issue are discussed in the Wall Street Journal.
Steve Coll traces the current momentum around raising the minimum wage to residual fallout from the Great Recession. Edward Luce contends companies like Wal-Mart and McDonald’s are under real pressure to raise their workers’ salaries. George Packer explains how workers employed by these companies don’t make enough money to help stimulate the economy. For a comprehensive breakdown on why the current minimum wage falls far short of providing a living wage, read this. For additional data, here are five key facts about the minimum wage from Pew.
As if conceived as a coda to the President’s speech, fast-food workers in 100 cities across the Nation are participating in a one-day strike to raise the hourly wage across their industry to $15 per hour and preserve the right to unionize without retaliation. Striking a note of solidarity, 53 members of Congress sent a letter to restaurant executives urging fast-food chains to raise their workers’ wages. However, the size of a 67 percent pay increase has supporters of raising the wages of low-income workers, like Arindrajit Dube, worried. Read Economist David Neumark’s concerns in the Wall Street Journal. Ron Unz, Robert Reich, Douglas Holtz-Eakin and James Pethokoukis offer diverse opinions on this issue and the broader issue of income inequality here.
For a statistical profile of fast-food workers, dispelling the widely held misconception that teenage employees dominate this industry, read this. Seeking a human face to fully grasp why raising the pay for fast-food workers is the moral thing to do? Meet Eduardo Shoy.
More than half of American families make $60,000 a year or less. Looking for a way to improve the social mobility of low-income families, economists from the Hamilton Project are proposing a change in the tax code that would eliminate a secondary-earner penalty. Read about it here, along with an explanation and endorsement of the measure from Peter Orszag. On November 1, SNAP funding was cut by $5 billion. A consistent line of attack against food stamps is that free food breeds government dependency. However, a recent research paper shatters this claim. To consider its findings – food stamps relieve hardship and trigger improved long-lasting health and economic outcomes for children – access the report here. Finally, unless Congress acts, on December 31, federally funded emergency unemployment benefits will expire – affecting 1.3 million Americans.
QUOTES OF THE DAY
“Lunacy.” The reaction of Arthur Brooks of the American Enterprise Institute to President Obama’s support for a higher minimum wage at a time when joblessness is near crisis levels.
“What drives me as a grandson, a son, a father, as an American is to make sure that every striving, hardworking, optimistic kid in America has the same incredible chance that his country gave me.” President Obama in a speech delivered at the Center for American Progress on December 4, 2013.
“…the idea that so many children are born into poverty in the wealthiest nation on Earth is heartbreaking enough. But the idea that a child may never be able to escape that poverty because she lacks a decent education or health care or a community that views her future as their own -- that should offend all of us. And it should compel us to action. We are a better country than this.” President Obama in a speech delivered at the Center for American Progress on December 4, 2013.
“Tired? I’m too busy to be tired.” Edward Shoy, a minimum wage worker in NYC, who works all day and works all night: from 11 p.m. until 7:30 a.m.
“No business which depends for existence on paying less than living wages to its workers has any right to continue in this country.” Franklin Roosevelt quoted by Arindrajit Dube in Dube’s essay on the need to have a fair minimum wage.
“What business is it of the government to fund high-quality preschool and child care? Good business.” Matt Valenti, vice president and general counsel of AntiCancer Inc., a San Diego biotech, arguing in an op-ed that universal preschool is necessary if the U.S. is to remain competitive in the global marketplace.
"These are no longer jobs being done by teenagers who need extra money. These are jobs being done by adults that can't find any other work." SEIU President Mary Kay Henry on why raising the minimum wage is justified and why the movement to raise the minimum wage is growing.
GRAPH OF THE DAY II
EDUCATION PERFORMANCE OF 15 YEAR-OLDS. The Economist relying on data from the OECD, December 3, 2013
GRAPH OF THE DAY III
LOW-WAGE WORKERS BY EDUCATION, 1979-2012. Center for Economic and Policy Research, July 2013
INTERACTIVE OF THE DAY
PISA SCORES: HOW THE U.S. STACKS UP AGAINST OTHER NATIONS. EdWeek, December 3, 2013
PRESIDENT OBAMA’s SPEECH ON THE ECONOMY
Is Obama Getting Serious about Inequality? John Cassidy
Obama focuses agenda on relieving economic inequality. Zachary Goldfarb
ED. The President on Inequality. The New York Times
Remarks by the President on Economic Mobility. The White House
THE MINIMUM WAGE
OP ED. The Minimum We Can Do. Arindrajit Dube
POLL. Public Support for raising the minimum wage. Hart Research
POLL. Most Americans for Raising Minimum Wage. Gallup. November 11, 2013
Higher Calling. New Yorker. Steve Coll
OP ED. A higher minimum wage is the tonic America needs. Edward Luce
Black Friday and the Race to the Bottom. George Packer
ED. The War of the Wages. The Wall Street Journal
STRENGTHENING THE SAFETY NET
REPORT. Long Run Impact of Childhood Access to the Safety Net. Hilary W. Hoynes, Diane Whitmore Schanzenbach, Douglas Almond. NBER Working Paper No. 18535, issued in November 2012