Wages stagnant, minimum must be raised

Bill Knight column for Mon., Tues. or Wed., Aug. 12, 13 or 14

A couple of weeks ago, the Bureau of Labor Statistics reported that the midpoint for wages for full-time U.S. workers in the quarter ending on June 30 was $776, which was 0.6% higher than a year ago.

However, the Consumer Price Index increased 1.4% over the same period, so inflation was more than twice as much a negative factor as wages’ meager positive one.

In “constant dollars,” a standard comparison measurement based on 1982-84 dollars, the BLS shows that the median weekly earnings for the 103,946,000 U.S. workers employed in the quarter ending June 30 was $334. That $334 figure is the same as it was in the second quarter of 2005, when 103,201,000 workers were counted.

So there are 745,000 fewer Americans working now than eight years ago, and the median – the point where half of wage and salary workers earn more and half earn less, according to the government’s current population survey – is identical.

Hardly progress.

Now, as the 113th Congress is on its August recess, it’s been four years since any Congress increased the federal minimum wage, and since the expected debate in Washington will revisit the budget and the economy after representatives return to the Capitol, the middle class in general and the minimum wage in particular must be addressed.

President Obama at his appearance at Knox College in Galesburg on July 24 pledged that he would continue to press for an increase in the minimum wage, which has been stuck at $7.25 an hour since 2009.
Some states are higher, such as Illinois, where the minimum wage is $8.25 an hour.

Such national action is not only a good idea; it’s a popular one, as recent polling has found that the majority of Americans – regardless of political party affiliation – support an increase of the minimum wage to $10.10.

Three and a half million workers make either minimum wage or less – that’s about $15,000 a year, well below the poverty line for a family of two – and millions more Americans make something only slightly above it. Raising the minimum wage to $10.10 would mean higher wages for the 21.3 million Americans who make even less.

Wait; what? you think: “People make less than the statutory MINIMUM?”

According to the Pew Research Center, almost 2 million Americans earn an hourly wage that is less. They’re exempted from the part of the Fair Labor Standards Act that requires employers to pay at least $7.25 an hour; they include “tipped workers” and many domestic workers, as well as workers on small farms, some seasonal workers and some disabled workers.

If four years seems like too long to wait to improve the minimum wage, consider the minimum for tipped workers: That hasn’t changed in 17 years because Congress in 1996 separated tipped-worker wages from the normal minimum wage at the bidding of the powerful and profitable restaurant lobby.

In Galesburg, Obama said, “Even though our businesses are creating new jobs and have broken record profits, nearly all the income gains of the past 10 years have continued to flow to the top 1%.

“The average CEO has gotten a raise of nearly 40% since 2009,” he continued, “but the average American earns less than he or she did in 1999. And companies continue to hold back on hiring those who have been out of work for some time.”

Such inequality isn’t just “morally wrong,” Obama added, “it’s bad economics. When middle-class families have less to spend, businesses have fewer customers. When wealth concentrates at the very top, it can inflate unstable bubbles that threaten the economy. When the rungs on the ladder of opportunity grow farther apart, it undermines the very essence of this country.”

The nation needs a new bottom rung that’s strong enough to let working people step up and climb.

The country needs a better minimum wage, and one that includes all employees.

[PICTURED: Graphic from UAW]