Labor - And A Whole Lot More

A Decent Living For All?

By Dick Meister blog December 25, 2011

http://www.dickmeister.com/id402.html

Finally there's some good news for the millions of
Americans who must to live on pay at or close to the
legal minimum wage. Eight states are raising their
minimum wage on January First, in line with state laws
requiring the minimum to keep pace with inflation.

The raises to come are modest by any measurement. But
any increase must be welcomed as desperately needed and
hopefully as a major start toward increasing the
minimum wage everywhere to a level that will provide a
decent living to all working Americans, many of them
living in poverty or near-poverty.

The minimum wage is just as important now as it was in
1938, when the wage law was enacted as part of the Fair
Labor Standards Act, with a promise of guaranteeing
workers "a standard of living necessary for health,
efficiency and general wellbeing."

The federal rate was set at 25 cents an hour, with
states and local governments free to set their own
minimums, as long as they are above the federal rate.

Today's rates are much higher, of course, although
barely adequate. The federal rate is $7.25 an hour,
only about $15,000 a year for full-time workers before
taxes and other deductions. Eighteen states, more than
100 cities and counties and the District of Columbia
have higher rates, but their rates also are clearly
inadequate.

During his 2008 election campaign, President Obama
proposed raising the minimum to  $9.50 an hour by 2011.
But even though that would merely adjust the minimum
wage for inflation, Congress and the White House have
done little to make it happen.

Some of Obama's Republican opponents in Congress
actually have called for the minimum wage to be
abolished, largely because their big money backers in
the restaurant business, who employ about 60 percent of
all minimum wage workers, are against it, as are many
other business and corporate interests.

Congress' failure to act has left it up to the states.
The eight that are raising their rates on New Year's
Day include Arizona, Colorado, Florida, Montana, Ohio,
Oregon, Vermont and Washington.  Their rates will
increase by 28 to 37 cents an hour to between $7.64 and
$9.04. The National Employment Law Project (NELP)
calculates that will bring nearly 1.4 million full-time
minimum wage workers an extra $582 to $770 per year.

Another 400,000 will get raises as pay rates are
adjusted upward to reflect new minimum wage rates. It's
not just individual workers who will benefit from the
raises. Like all low-wage workers, they must spend
virtually every cent they earn, thus raising the
overall demand for goods and services and the hiring of
new employees to help provide them.

NELP estimates that the increased consumer spending
generated by the raises will add $366 million to the
gross domestic product and create the equivalent of
more than 3,000 full-time jobs. Other estimates
indicate that every dollar increase in wages for
workers at the minimum creates more than $3,000 in new
spending after a single year.

And we shouldn't forget that those earning the minimum
include many of our most valuable yet needy and
exploited workers.  Most work in the service or retail
fields, as domestics providing home health care for the
elderly and other household services or caring for the
children of working mothers, for example. Others work
in agriculture.

Many can't find full-time jobs even at the bare
minimum.  More than one-third are the main or sole
support of their families. Almost two-thirds are women,
many of them single mothers. One-third are African-
American, Latino or Asian. Many are recently arrived
immigrants. Only a few belong to unions or have other
protections aside from the law.

But wouldn't a minimum wage increase cause businesses
to cut back their hiring, as opponents of minimum wage
raises claim? No. Studies show that even during times
of high unemployment, raising the minimum does not lead
to a loss of jobs. Actually, the number of jobs has
grown after each of the 19 times the federal minimum
has increased over the past 73 years.

Consider this, too: Taxpayers are providing billions of
dollars in subsidies to employers of minimum wage
workers, since much of the money paid out in public
assistance goes to families whose working mothers do
not earn enough to be self-supporting. Private
charities provide additional millions in aid.

There's no doubt employers are shifting a significant
part of their labor costs to the general public, and no
doubt that welfare costs could be reduced substantially
if the minimum wage they had to pay was raised to a
decent level.

Think of the benefits to society generally if the
minimum wage workers who now must depend on government
assistance could earn enough to make it on their own.

Think of the benefits to employers. As several studies
have shown, raising workers' pay raises workers' morale
and with it, their productivity, while decreasing
absenteeism and replacement costs.

Think of the benefits to small retail businesses.
Opponents of a minimum wage increase say they'd be hurt
the most by a higher minimum wage, but it's far more
likely they'd be among the greatest beneficiaries. For
minimum wage workers have no choice but to spend most
of their meager earnings in neighborhood stores for
food and other necessities.

Tiffany Williams of the Institute for Policy Studies
says raising the minimum wage "would be a step toward
restoring dignity for millions of workers, enabling
many ordinary working Americans to become part of the
economic recovery rather than its collateral damage."

Hard to argue with that, or with Christine Owens,
NELP's executive director,  who says the minimum wage
increases "represent bright spots on an otherwise bleak
economic horizon. Workers' buying power is the secret
weapon in the fight to get our economy back on track.
States are taking action to protect that critical
buying power. Congress should follow their example to
realize those benefits for the national economy."

Let the minimum wage raises in eight states be just the
beginning of raises in all states.  Let all Americans
have the right to a decent living.

Copyright c 2011 Dick Meister

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