Location: United States

Tuesday, March 08, 2005

US Senate Lusts for American Workers

Once again, the American worker got screwed. The US Senate defeated not one, but two proposals that would raise the minimum wage from the current $5.15. The last time the minimum wage was successfully raised was in 1996. Since that time, inflation has eaten eighty cents worth of the purchasing power of that minimum hourly wage. That means a minimum wage worker today really gets $4.35 in 1996 dollars. That is actually only ten cents more than what it was when President Clinton signed the raise.
The deflated value of the minimum wage is one of the primary reasons wage inequality between men and women persists. The minimum wage, in purchasing power, in 2001 was twenty-one percent less than in 1979 and twenty-seven percent less than it was in 1968. The deflated value of the minimum wage is the primary reason why we have a whole class of people termed “the working poor”. If the minimum wage of $1.65 in 1968 had kept pace with inflation, workers would now receive a guaranteed wage of $8.88 an hour.
It is not simply teenage part-time workers that get effected. In fact, only one in fourteen of effected workers are teenagers. Almost two thirds of all minimum wage workers are adults, and four in ten of them are the sole bread winner for their family. Nor is it a small number of workers who would be effected. 7.3 million people work full-time for minimum wage.
The proposal introduced by Senator Ed Kennedy would have raised the minimum wage by $2.10 over the next twenty-six months. Republicans countered with an offer to raise it by only $1.10 over eighteen months. The Democratic bill was defeated by three votes and the Republican bill went down by twenty-three votes. Either way, it’s the working poor that got screwed.
Another $1.10 an hour would have given full-time minimum wage workers $2200 a year. If you do the math, the raise would have pumped over $16 billion into the economy directly into the hands of those who need it most and will put it to the best economic use. From that level, it would have created over $150 billion in overall economic growth – which doesn’t include new jobs that would be created to meet the increased demand from these low-wage workers.
For someone working for minimum wage, $2200 a year is a huge bonus. A family of four spends about $156 per week for groceries – meaning the minimum wage increase would have paid for fourteen weeks of groceries. It would also cover either three months average rent or slightly less than a full year at a community college. In other words, it would give the working poor a way to care for themselves – to be responsible for themselves – without turning to government assistance or charity.
The same old arguments against the minimum wage are being trotted out. They are saying it would force businesses into bankruptcy or cause consumer prices to skyrocket. They can’t have it both ways. Either the higher wages are passed along to consumers or they aren’t. If they are, then each consumer pays a very small percentage of the price of wages. Either way, it will neither cause business closure nor inflation because the fact is that neither position is born out by the facts. The last three hikes in the minimum wage have seen no increase in consumer prices and no change in job creation trends.
In case you’re wondering why the Republican bill got more “nay” votes when it was a lower raise, it has to do with the “business friendly” amendments tacked onto it. Such as allowing employers to determine overtime wages based on working eighty hours over a two week period rather than forty hours per week. This means the Republicans wanted your boss to be able to work you sixty hours one week and not pay overtime simply by cutting your hours the following week.
This is yet another instance of the Republican Party advancing its anti-worker agenda. This is the party that has allowed companies to ship jobs overseas, then added insult to injury by allow “corporate inversions” where companies can avoid taxation simply by opening a post office box in the Bahamas. More work, less pay, less protection – this is the Republican view of a “free market” for your work.
It has to stop. It hurts American families and American businesses. It is immoral. It has no place in our society.


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