10 Reasons to Call for MORE Than $10.10 as a Minimum Wage
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Yesterday President Obama signed an executive orderraising the minimum wage for some federally contracted workers to $10.10. This move illustrates the fact that we need a higher minimum wage for all workers. It also promotes the bill by Sen. Tom Harkin and Rep. George Miller which would raise the minimum wage to $10.10 by 2015.
Make no mistake: The president's gesture was a good one, and the Harkin/Miller bill is very important. But, as is so often the case nowadays, strategists on the left run the risk of prematurely accepting preconceptions about what is "politically possible." If economic debate becomes strictly a defensive game on the left, the " Overton window" of acceptable debate will keep shifting toward the right.
The minimum wage is an excellent case in point. There are strong arguments for raising it even more -- perhaps considerably more -- than is currently being discussed, and the independent left should be making them.
Here are 10 reasons why "$10.10" should be a floor, not a ceiling, in discussions of the minimum wage.
1. It keeps up with inflation -- but not entirely.
Compared to the 1968 minimum wage, $10.10 is enough to keep up with inflation -- more or less. But it doesn't make up for the many years in which minimum wage workers fell behind. Those years often led to increased debt, lost educational opportunities, and other forms of deprivation.
2. We're lagging behind other industrialized countries.
The U.S. minimum wage is well behind that of most other industrialized countries. Even at $10.10, we would be laggards compared with most of our peers. (But not all of them. To use the vernacular: In your face, Slovak Republic!)
Our current minimum wage is roughly 40 percent the median national income. We would have to raise it to roughly $10.88, effective immediately, to equal France's. And don't we want to do even better than that? (Source: International Labor Organization)
Where's that American exceptionalism when we need it?
3. If the minimum wage had kept pace with productivity, it would be $21.72 today.
The Harkin/Miller bill would peg the minimum wage to inflation in future years. But there's a very strong argument for tying it to productivity instead. That's what the minimum wage did in the years between 1947 and 1968, as economist Dean Baker regularly points out. (Source: Dean Baker, CEPR)
If the minimum wage were based on productivity increases from 1968 to today, it would be more than $21 per hour. (Source: John Schmitt, CEPR)
Corporations would have us believe that even a modest minimum wage which is tied to inflation would stifle growth and lead to increased joblessness. And yet, during the decades that the minimum wage rose even higher, with productivity, we experienced an average of 4 percent annual GDP growth and 4 percent unemployment. (Source: Baker and Kimball, CEPR)
In fact, the official unemployment rate in 1968 was less than half of the rate today, and the actual employment figures were even better.
Productivity measures the wealth produced by an economy. One-percenters want us to believe otherwise, but a system in which most new wealth goes to them is the exception, not the rule. Why are we deliberately preserving this harmful situation.
4. If the minimum wage had kept pace with the incomes of the top 1 percent, it would be more than $28 per hour today.
Minimum-wage workers to America's wealthiest citizens: We'll take it! (Source: Economic Policy Institute)