Grassroots/Hank Kalet

Raise the Floor: Time to Boost the Minimum Wage

A single parent with two children needs to earn more than $100,000 to get by in the Trenton, N.J., area, or nearly $50 an hour before taxes.

The figure for the Des Moines area is almost $75,000, and in the Seattle area it is more than $90,000.

In none of these communities, however, can a worker working a single 40-hour-per-week, minimum-wage job come close to earning what they need.

These figures come from the Massachusetts Institute of Technology Living Wage Calculator (https://livingwage.mit.edu), which was created to estimate “the basic needs of a family.” Basic is the key word. It doesn’t include restaurants or take-out meals, entertainment, vacations, or savings. It is, according to MIT, “the minimum income standard that, if met, draws a very fine line between the financial independence of the working poor and the need to seek out public assistance or suffer consistent and severe housing and food insecurity.”

The minimum wage is an important tool in creating equity among workers. It sets a floor for wages, which then pushes other working-class wages upward. Conservatives see the minimum wage as unnecessary and as an intrusion on the prerogatives of employers, and they accuse it of increasing costs and ultimately leading to a loss of low-wage jobs. While this may sound logical, the evidence for this is thin — in fact, the research on minimum wages hikes that has been conducted over the last several decades is surprisingly inconclusive, leaving little consensus about its effects. While some studies have shown greater unemployment, others have found that small job losses were outweighed by increased spending by workers that in turn created new jobs in the economy.

The Biden administration has said it favors a $15 minimum wage, more than doubling the current $7.25-per-hour wage. The current wage was set in 2009 and was far from adequate because Congress and the White House has only addressed the minimum wage sporadically and unevenly since at least 1968. The $1.60 minimum wage in 1968 would be worth about $11 or $12, adjusted for inflation — which would still leave most low-wage workers behind. Dean Baker of the progressive Center for Economic and Policy Research says the wage needs to track productivity, which would require it to be set at about $24 an hour.

The logic is straightforward; we expect that wages in general will rise in step with productivity growth. For workers at the bottom to share in the overall improvement in society’s living standards, the minimum wage should also rise with productivity.

“The distinction between inflation and productivity is an important one,” he wrote last year (https://cepr.net/this-is-what-minimum-wage-would-be-if-it-kept-pace-with-productivity/). “If the minimum wage rises in step with inflation, we are effectively ensuring that it will allow minimum wage earners to buy the same amount of goods and services through time, protecting them against higher prices. However, if it rises with productivity that means that as workers are able to produce more goods and services per hour, on average, minimum wage earners will be able to buy more goods and services through time.”

It also would attack the growing disparity among workers, allowing those at the bottom to keep pace with those closer to the top.

This wage differential, he says, is “particularly harmful to Black workers and other workers of color, especially women of color, who make up a disproportionate share of workers who are severely underpaid. This is the result of structural racism and sexism, with an economic system rooted in chattel slavery in which workers of color — and especially women of color — have been and continue to be shunted into the most underpaid jobs.”

Many of these are those we now deem essential. The Brookings Institute found that about half of the occupations with median wages of less than $15 an hour are essential workers — those doing deliveries, working as store clerks or in construction, providing basic health care or caregiving. There were about 22.3 million of these workers in 2018, Brookings said, a number that is likely higher today.

The impact on workers is devastating. Few can buy houses or new cars, and most live in fear that one seemingly minor economic set back — car repairs, an unexpected medical emergency — could cost them housing. The low also affects the larger economy.

Ieishia Franceis, a fast food worker in North Carolina, told The Guardian a minimum wage increase would allow her to save money for a house and have the kind of cash flow that could lead to better food and better transportation options.

It’s why she and thousands of other fast food workers went on strike in February. The higher wage means a better life, and it also would force businesses to do more than just run ads on TV praising essential workers.

“Sometimes businesses get so caught up in doing business that they forget who runs their businesses,” she said. “We’re going to keep fighting and not going to stop until we get all the equality we’re fighting for.”

Hank Kalet is a writer living in New Jersey. Email, hankkalet@gmail.com; Twitter, @newspoet41 and @kaletjournalism; Instagram, @kaletwrites; Substack, hankkalet.substack.com; Patreon, @newspoet41; Facebook, Facebook.com/hank.kalet.

From The Progressive Populist, March 15, 2021

Populist.com