Ambrose Clancy, The Daily Record Newswire
A regular updating of the federal minimum wage is so popular even Republican standard bearer and extremely successful businessman Mitt Romney is in favor of it.
As governor of Massachusetts from 2003 to 2007 he thought raising the minimum wage was a good idea, and when he was challenging John McCain for the GOP nomination in 2008 he also expressed his commitment to it.
Mr. Romney stayed consistent, saying on the record in January that “my view has been to allow the minimum wage to rise with the CPI [Consumer Price Index] or with another index so that it adjusts automatically over time. I haven’t changed my thoughts on that.”
But … wait a minute. Lest we forget, this is Mitt Romney, after all. In March, after getting hammered for expressing such socialist heresy by the reactionaries who have hijacked the once-sensible Republican Party, Mr. Romney let a right-wing tail wag his moderate dog: “There’s probably not a need to raise the minimum wage,” he told a reporter.
President Barack Obama hasn’t been much better when it comes to the issue, campaigning in 2008 on a promise to raise the minimum wage. He hasn’t, probably realizing House Republicans are standing like a stonewall whenever he proposes anything, but to the president’s discredit, he hasn’t raised much of a fuss about it.
In 1938, under the Fair Labor Standards Act, a cornerstone of FDR’s New Deal, Congress declared it was a crime to pay someone less than 25 cents an hour. That’s about $3.80 in today’s dollars.
Minimum wage is now stalled at $7.25 an hour, or about $290 a week for full-time workers, just over $15,000 a year. Not bad if we’re talking about kids working part time at the mall. But that isn’t the reality.
According to the U.S. Labor Department, 75 percent of minimum-wage earners are adults over 20.
A bill sponsored by Sen. Tom Harkin, D-Iowa, would make the minimum $9.80 an hour by 2014. If it were to become law – don’t hold your breath – it would, according to the Economic Policy Institute, boost paychecks for 30 million Americans, or 10 percent of the country.
Harkin, speaking with National Public Radio, cited the fact that in 1968 the minimum wage was equivalent to $10 an hour in today’s dollars. “Think about the people that in 1968 got minimum wage and then think about the group today,” the senator said. “It’s basically the same group, but they have 30 percent less buying power.”
Those opposed to a rise in minimum wage are not all tea party fanatics who believe if the invisible hand strangles people to death, they deserved it. There are people who make a reasoned argument that a rise in wages will kill jobs, since small businesses, struggling in a crippled economy, will be hurt even worse.
But a healthy majority — about 66 percent — of minimum-wage workers are employed by companies with more than 100 employees, including household-name corporations that can easily afford to hand out raises, according to the National Employment Law Project, a Manhattan-based advocacy organization.
In a comprehensive study, NELP found that the top three low-wage employers in America are Wal-Mart, Yum! Brands (Pizza Hut, Taco Bell, KFC) and McDonald’s. That same trio is making record profits and doling out hefty executive compensation.
According to an analysis of Standard & Poor’s Capital IQ, a database that provides information on companies, over the past four fiscal years profit growth for Wal-Mart grew 23 percent, Yum! Brands went up 45 percent and Mickey D’s jumped 130 percent in profits.
Raising wages for their employees by a few dollars by these employers and others making good profits seems to be not only the smart choice, but the moral one. But that would allow for a moral concept to be floating through board rooms these days.
It’s the smart choice because, to use an old Ronald Reagan analogy, a rising tide lifts all boats: More money in the economy means more purchases, more business, more success.
The idea of a steadily increasing minimum wage is an old and respected one that used to be a nonpartisan no-brainer. But that was before the concept was wrecked on the shoals of a libertarian ideology that has taken over one political party.
Without a minimum wage advance, individuals and the economy at large are being hurt, according to Martin Melkonian. The Hofstra University economist and teacher noted this week that a minor proportion of small businesses — something on the order of 5 percent — might be hurt, but advantages gained by individuals will fuel an economic game changer for everyone.
“The market doesn’t work well for low-income workers, with a result that people don’t have sufficient purchasing power to meet their basic needs,” Melkonian said. “The basic problem of today’s economy is lack of aggregate demand. One of the most important ways to increase demand is improving the income of those likely to spend it, and that’s the lower end of the spectrum of people earning less than $10 an hour. Raising the minimum wage would make a significant difference.”
He didn’t have to mention moral choices.
