The best way to ensure that the American people don’t live in poverty and end up needing government subsidies just to get by is to guarantee they are paid the living wage that they have earned and deserve. The refusal of corporate America to pay their workers fair wages and make off with disgusting profits has turned into a crisis in our country as wages stagnate and families suffer. Responding to the outcry for fair wages from the country’s lowest wage earners, 14 states will raise their minimum wage at the start of 2016:
- Alaska: $8.75 to $9.75
- Arkansas: $7.50 to $8.00
- California: $9.00 to $10.00
- Colorado: $8.23 to $8.31
- Connecticut: $9.15 to $9.60
- Hawaii: $7.75 to $8.50
- Massachusetts: $9.00 to $10.00
- Michigan: $8.15 to $8.50
- Nebraska: $8.00 to $9.00
- New York: $8.75 to $9.00*
- Rhode Island: $9.00 to $9.60
- South Dakota: $8.50 to $8.55
- Vermont: $9.15 to $9.60
- West Virginia: $8.00 to $8.75*
However, only two states – California and Massachusetts – will have a $10-an-hour wage floor. While these are good starts, there is much more that must be done. Considering the federal minimum wage, a bump to $10 established in 1938 for a 40-hour work week, it translates into less than $21,000 a year for a 40-hour week. Yet, according to federal poverty guidelines, $24,250 is the threshold for a family of four that determines eligibility for Medicaid, the Children’s Health Insurance Program (CHIP), and SNAP (food stamps) programs.
This explains why the lurking fallout from companies such as Walmart and McDonald’s, which pay their workers so poorly, results in a hidden corporate subsidy borne by taxpayers that is estimated to cost state and federal government upwards of $150 million a year on four key antipoverty programs relied on by working families. These are the programs mentioned above and the earned-income tax credit (which is specifically intended for working families). According to Sarah Leberstein, senior staff lawyer with the National Employment Law Project:
“The low-wage business model practiced by many of the largest and most profitable employers in the country not only leaves many working families unable to afford the basics, but also imposes significant costs on the public as a whole.”
Some states, such as Connecticut, have proposals before the legislature to recoup those costs by “requiring large employers to pay a fee to the state for each worker who earns less than $15 an hour.” And in 2016, California will takes steps on the road toward transparency by “publishing the names of employers that have more than 100 employees receiving Medicaid, and how much these companies cost the state in public assistance.” Instead of exacting a penalty on employers, municipalities are simply trying to find a way to require employers to pay their fair share instead of shifting the burden onto society so they can pocket more cash.
“Seattle, Los Angeles and San Francisco, as well as a handful of smaller cities on the West Coast, all are gradually phasing in a $15 minimum wage. Meanwhile, several cities and states have enacted $15 minimum wage laws specifically for public-sector and government-contract workers.”
The disturbing reality, according to the Economic Policy Institute, a nonprofit, nonpartisan think tank created in 1986 to include the needs of low-and middle-income workers in economic policy discussions:
“…the federal minimum wage of $7.25 was worth nearly 10 percent less than when it was last raised in 2009, after adjusting for inflation. In fact, the real (inflation-adjusted) value of the federal minimum wage in 2014 was 24 percent below its peak value in 1968.”
Not surprisingly, President Obama and Congressional Democrats have met fierce Republican resistance with their attempts to raise the minimum wage – for some heartless reason, Republicans seem intent on keeping the American people in poverty: “Democrats in Congress have put forth a variety of proposals in recent sessions, including a $12 plan with indexing, but Republicans, who control both chambers, have declined to give any of them a vote.”
In fact, according to the U.S. Department of Labor statistics, of the 22 states with a minimum wage at federal levels and/or states with no minimum wage law (or one that is below the federal minimum wage, such as Wyoming and Georgia (federal minimum wage rate applies)), all but one is a red state – and let us not forget the new Republican governor of Kentucky, who by executive order, just lowered the minimum wage increase of his Democratic predecessor to federal minimum.
Last year, the “Fight for 15” inspired a national grassroots movement emerged. Tens of thousands of people protesting across the country demanded a $15-hourly minimum wage – largely supported by Democrats. Republicans immediately cried: “Increasing the minimum wage so dramatically will damage the economic prospects of millions of vulnerable people” by firing people and/or causing employers to cut back on their new hiring. The fact is, that is a myth. In a letter to President Obama and congressional leaders urging a minimum wage increase, more than 600 economists, including seven Nobel Prize winners, wrote:
“In recent years there have been important developments in the academic literature on the effect of increases in the minimum wage on employment…shows that increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market (my emphasis). Research suggests that a minimum-wage increase could have a small stimulative effect on the economy as low-wage workers spend their additional earnings, raising demand and job growth, and providing some help on the jobs front.”
The Republican hypocrisy here is breathtaking. They continue to object to paying people a living wage while they wage war on social safety net programs – as they continue blame and stigmatize the poor for being poor and as the cause
of poverty in this country – though Republicans have no objection to providing billions in subsidies to corporations like Walmart and McDonald’s. The bottom line here is there is both a moral and economic imperative to raising the minimum wage. If an adult working a full-time job can’t eat, find a place to live, or clothe herself/himself, then what do we stand for as a nation?
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Opinion columnist and former editor-in-chief of Occupy Democrats. He graduated from Bennington College with a Bachelor's degree in history and political science. He now focuses on advancing the cause of social justice and equality in America.