Created in 1938 during the Great Depression, the minimum wage was enacted when unemployment was at 19 percent. President Franklin Roosevelt called the minimum wage “an essential part of the economic recovery.” It was intended to ensure workers “a fair day’s pay for a fair day’s work.” This is no longer the reality for many low-income workers.
Today, the federal minimum wage of $7.25 per hour is a poverty-level wage. With an annual income of only $15,080, a full-time minimum wage worker’s salary is well below the 2011 federal poverty threshold of $18,530 for a family of three.
In Illinois, the minimum wage in state law is set at $8.25, but as an annual wage of $17,160 this is still below the federal poverty line for a family of three.
With this poverty-level wage, workers have to worry daily about how they will get food on the table every night. Families often have to choose between childcare and healthcare.
While poverty in America increases, the gap between the rich and poor continues to grow to unthinkable proportions. To put things in perspective, a corporate CEO at a Standard & Poor’s 500 company earns more before lunch on any given day than the entire annual salary of a minimum-wage worker.
Congress has continually perpetuated income inequalities between the haves and have-nots. Between 1997, when the minimum wage was increased to $5.15, and 2005, members of Congress gave themselves seven pay raises. The federal minimum wage was never increased during that time, and actually declined in value due to inflation. Today, the minimum wage buys less than it would in 1968.
Raising the minimum wage to a living wage is good for us all: workers; businesses, both large and small; and the American economy.
States and cities that have minimum wages higher than the federal have experienced lower rates of unemployment and declining poverty rates, according to studies cited by Let Justice Roll, a nationwide coalition of faith, labor, business and human rights organizations.
In San Francisco where the city’s minimum wage is the highest in the nation after its increase to $10.24 per hour on Jan. 1 2012, small businesses have not experienced significantly different costs from wage hikes, and the city remains a vibrant location for businesses of all sizes.
Raising the minimum wage puts money directly into the hands of consumers who spend their money at local businesses. Over the three-year period beginning in 2007 in which the federal minimum wage was increased from $5.15 to $7.25, an estimated $9.9 billion in new consumer spending was generated. That’s good news for businesses.
As a student at Carleton College in Northfield, Minn., I witnessed the Occupy Minnesota movement in downtown Minneapolis. While interning in the Boston area, I visited the Occupy Boston encampment in the city’s financial district. In both regions, there appears to be widespread support for the Occupy movement, although critics say the movement lacks an issue or demand to focus on.
The minimum wage is an issue that spans partisan lines and that the Occupy movement should embrace. According to a 2011 American Values Survey, over two-thirds of Americans support raising the minimum wage from $7.25 to $10. At the same time, polls are mixed but many show that a majority of Americans support the goals and principles of the Occupy movement.
Although President Barack Obama did not mention the Occupy movement in his State of the Union message on Jan. 24, his call for “economic fairness” for all families was a major point of emphasis, and proposals to narrow the gap between the rich and the poor can be seen throughout the speech. Increasing the minimum wage would be a great starting point. The evidence is overwhelming that increasing the minimum wage moves families out of poverty and elevates the wage floor of the entire economy, benefits small and large businesses, stimulates the economy by increasing consumer spending, and won’t require any government spending or raising taxes.
Moreover, increasing the minimum wage provides a specific, coherent message the Occupy movement can rally around. Now is the time to occupy for the minimum wage.
Stockton, Ill. native Courtney Dufford is a student at Carleton College in Northfield, Minn., and is working with the Economic Justice Program of the Unitarian Universalist Service Committee, an international human rights organization based in Cambridge, Mass.