Minimum wage is a poverty wage. Raise it.
The federal minimum wage has been stuck at $7.25 per hour for 13 years. That’s just $15,080 a year if you work full time. Prices are up. Corporate profits hit record highs. But the minimum wage has stayed at $7.25 since the last increase on July 24, 2009.
We’re deep into the longest period without a raise since the federal minimum wage was enacted in 1938. Every day without a raise is another day the minimum wage is a poverty wage instead of the anti-poverty wage it was intended to be.
The federal minimum wage was enacted through the Fair Labor Standards Act, which aimed to eliminate labor conditions “detrimental to the maintenance of the minimum standard of living necessary for health, efficiency and general well-being of workers” and detrimental to fair competition among businesses.
Twenty states have minimum wages that are no higher than the $7.25 federal level: Alabama, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, New Hampshire, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Wisconsin and Wyoming.
Workers and businesses in those 20 states and many others are counting on a federal raise. Minimum wage increases are vital so workers can afford the basics. And they boost the consumer spending that businesses depend on. Every day without a raise is another day the minimum wage falls further behind the cost of living.
The federal minimum wage peaked in purchasing power in 1968, when it was worth $13.86 in 2022 dollars (according to the U.S. Bureau of Labor Statistics Inflation Calculator).
Fortunately, 30 states now have minimum wages higher than $7.25. But most of them are still below the value of the federal minimum wage in 1968, adjusted for the cost of living.
When the minimum wage is set too low, workers can be earning more than the minimum and still struggle to pay rent and put food on the table.
For example, according to the Bureau of Labor Statistics, the median hourly wage for a fast food cook in Alabama was $8.90 in 2021. That means half of all fast food cooks earned less than $8.90. The median hourly wage for childcare workers was $8.95. For cashiers, it was $10.76.
A full-time worker with no children in Alabama needs $15.91 an hour just to afford the basics, according to the MIT Living Wage Calculator.
In 2021, the U.S. House of Representatives voted to increase the minimum wage to $15 by 2025. But action stalled in the Senate. More than 30 million workers would have gotten raises.
Minimum wage raises go right back into communities and the economy, as workers have more to spend at local businesses. Many businesses support raising the minimum wage and pay more now because they know that a fair wage is good business. It helps them hire and retain workers. It brings increased productivity and better customer service, which keeps customers coming back.
Action by businesses is essential. So are state and local minimum wage increases, wherever possible. But it’s long past time for Congress to raise the federal minimum wage. Without a federal raise, millions of Americans will be left behind.
Holly Sklar is the CEO of Business for a Fair Minimum Wage, a national network of business owners and executives who believe a fair minimum wage makes good business sense.
This article originally appeared on The Intelligencer: Minimum wage falls further behind the cost of living every day
