July 24, 2009, marks the last time the minimum wage was increased in America, to its current dollar amount of $7.25 an hour. At various times in their recent political lives, both candidates for President have called that figure too low. Both have agreed that the minimum wage ought to be indexed to inflation, to maintain its purchasing power for the poorest workers in America. And yet no action has been taken at the federal level since the end of the last phase-in of the minimum wage increase in 2009.
Now a group of activists have begun a quixotic quest to get the minimum wage increased, which would have a definitive economic impact on millions of Americans, and improve the overall economy by increasing purchasing power at the low end.
As the three-year anniversary of the last federal minimum-wage hike arrives July 24, a coalition of labor, religious and women’s groups is preparing to fight for an increase once again. The activist groups are launching a nationwide campaign to raise the federal minimum wage, starting with a national “Day of Action” on Tuesday.
Marches and rallies are planned Tuesday at congressional district offices and at businesses that pay low wages. In Chicago, protesters will hold a trolley tour of low-wage employers, while activists in Pittsburgh will rally for higher wages outside City Hall. Similar events are planned in dozens of cities, including New York, Washington, Miami, Kansas City, Mo., Sacramento, Calif., and Philadelphia.
Democrats in Congress also are weighing in. Rep. George Miller, D-Calif., soon will introduce legislation to raise the federal minimum wage by 85 cents an hour for three straight years – taking it from $7.25 to $9.80 per hour – and then index it annually for inflation thereafter. Sen. Tom Harkin, D-Iowa, and Rep. Jesse Jackson Jr., D-Ill., already have introduced similar bills. The proposals would provide raises for about 28 million people, according to estimates by the nonprofit Economic Policy Institute.
The 28 million figure is striking. That doesn’t include just people on minimum wage, because an increase would rise the tide for a whole set of low-wage workers, who would see increases in their take-home pay.
The legislation isn’t going anywhere soon. But the issue ought to be front and center. In a time of reduced demand, you cannot have a better policy for economic recovery than to raise the purchasing power of 28 million people who will unquestionably spend the money. This increases consumer spending and cycles a lot of money through the economy. Republicans can say that the minimum wage hurts jobs all they want, but there’s simply no evidence for it. And in our current state of low aggregate demand, it’s not debatable that it would help the economic picture. And there’s the fairness issue. Today’s minimum wage is actually lower than 1979, adjusted for inflation. For tipped workers it’s even worse.
A few states have recently indexed their minimum wages to inflation, which has led to small increases over the past year or so. Eighteen states and the District of Columbia have minimum wages above the federal level. This is going to be a long fight, but it’s entirely necessary and just.