July 24 was the fourth anniversary of the last time the federal minimum wage was increased—namely, to $7.25 per hour. Another increase is seriously overdue. And the Fair Minimum Wage Act of 2013 (S. 460, H.R. 1010) is a good way to accomplish that.
The federal minimum wage was corrected for inflation repeatedly from 1938—when first created—through 1968. But not since! We’d need a minimum wage today of about $10.56 per hour in order to match the buying power of the $1.60 per hour minimum wage of 1968.
In a recent article for Nuvo (http://www.nuvo.net/indianapolis/raising-indianas-minimum-wage/Content?o...), IU McKinney Law professor Fran Quigley and co-author Matt Lawson refuted the usual arguments trotted out over the past 75 years for opposing minimum wage increases.
First, the overwhelming body of research shows that minimum wage hikes do not cause job loss. On the contrary, an increase today would probably boost the economy, given that 70 percent of U.S. economic activity is due to consumer spending and that low-wage service-sector jobs are unlikely to be shipped overseas.
Second, big business regularly claims that minimum wage hikes would hurt small business. But two-thirds of low-wage workers are employed by large corporations, whose profits are at record highs and whose coffers (often overseas) are bursting at the seams with hoarded cash. In reality, small business thrives on consumer demand, and consumer demand cannot be sustained or grow in an economy with a “falling wage floor.”
Third, Quigley and Lawson point out that “nearly 90 percent of the workers who would benefit from a minimum wage hike are age 20 or older, and the median age for those filling the roles in the fast-growing home health care field is nearly 40.” So much for the straw dog used by some minimum wage opponents (i.e. the teenager without work experience).
But we increased the minimum wage only four years ago, opponents protest! This argument perpetuates the “illusion of a climbing wage floor.” Not only does the current minimum wage buy far less than it did in 1968, it fails to reflect increases in worker productivity. As Quigley and Lawson point out, “”The Center on Economic and Policy Research estimates that the minimum wage would be a whopping $21.72 per hour if it had been indexed to worker productivity.”
If you favor a minimum wage hike, you’re not alone. Public opinion polling shows that a strong majority of voters—including among Republicans—support an increase. Leading economic news outlets, such as The Economist and Bloomberg News, are with you. According to a survey by Representative Todd Young’s alma mater—the University of Chicago’s Booth School of Business—only 16 percent of economists polled were opposed to President Obama’s proposed minimum wage hike.
So don’t accept “no” or noncommittal answers from your Congressional representatives. Urge them—persistently—to support the Fair Minimum Wage Act of 2013. My 20-something relatives and their elders will sing your praises!