Raise Minimum Wage Now

The federal minimum wage of $7.25 needs to be raised. No more talk, just do it, especially if this nation is serious about getting millions of people back to work – and with some type of living wage.

Why?

If you think about the price of a gallon of gasoline flirting with $4, or higher, then you’ve answered the question.

Even so, there’s a no-holds barred debate raging nationally between business and labor about the impact of raising the minimum.

Business Versus Labor

Business groups say that raising the minimum wage discourages job creation.

For example, the National Restaurant Association says that a federal wage hike would “cause restaurant operators to make very difficult decisions to eliminate jobs, cut staff hours or increase prices.”

But labor advocates say that if workers don’t get raises, consumer spending stagnates.

“This is a critical part of recovery — to help people have more money to spend,” says Jen Kern, minimum wage campaign coordinator for the National Employment Law Project.

Let’s look at the job creation argument. Who are the jobs for?

Inside The Numbers

Many low-paid hourly jobs advertised in the classifieds, online and print, and at job posting websites offer little. They’re typically less than $10 per hour and often lack health benefits.

Sadly, it may be possible for some folks to collect more in unemployment benefits than working for such low wages. That’s hardly an incentive to get folks back to work.

Even academic studies are inconclusive, National Public Radio reports.

Some studies show that the National Restaurant Association and others like it are correct, while others show that a higher wage will stimulate spending without costing any jobs.

The good news: Seventeen states and the District of Columbia already have minimum wages set higher than the federal law. Oregon’s minimum is now $8.50 per hour.

Striking A Balance

WMB believes a balance can be struck between the needs of employers and those seeking gainful employment.

Perhaps raising the minimum wage will provide a better overall wage structure that attracts a better type of employee – one who is highly qualified and deserving of more than the minimum.

The minimum should be considered entry-level pay, for those lacking necessary experience and needed training.

Minimum wage supporters hope to prompt at least a few states to act, but no state has voted to increase the minimum wage this year.

The federal minimum wage, first enacted in 1938, was last raised in 2009, to $7.25 an hour. In 1971, the minimum wage was $1.60.

Adjusted for inflation, a worker today would have to make $8.83 an hour to have the same buying power, according to the U.S. Department of Labor.

Progressive Approach

In Illinois, for example, some lawmakers have been pushing to raise the state minimum wage up to $10.65 in steps over four years. The current minimum is $8.25 an hour, $1 more than the federal wage.

Given the realities of what it costs to live today – not only the price of a gallon of gas, but everything from the food we eat to the everyday (not designer) clothes we wear – a single-digit minimum wage in leaves us stuck in the past.

If we're serious about fixing our economic mess, let's forget for a moment about the golden-parachute CEOs and start with the folks on the bottom who just want a chance to do better.

Editor's Note: This is the last post for We Mean Business. We hope you have enjoyed our travels together across the web and our take on many things, from trends to issues.

As some wise person once said: It's the journey, not the destination, that matters most. We thank all of you for making this blog part of your personal journey!!!

Ken Cocuzzo