The NY Times Editorial board have spoken strongly today in a deeply reasoned editorial advocating a higher minimum wage. I concur, and I would add that while large cities like New York City, Seattle, and San Francisco have the size and density to raise minimum wages locally, a small city like Beacon would be significantly disadvantaged by trying to do so. So, I am calling on locals to support a national — or NY State — minimum wage increase.
WHAT’S THE POINT OF THE MINIMUM WAGE? Most people think of the minimum wage as the lowest legal hourly pay. That’s true, but it is really much more than that. As defined in the name of the law that established it — the Fair Labor Standards Act of 1938 — the minimum wage is a fundamental labor standard designed to protect workers, just as child labor laws and overtime pay rules do. Labor standards, like environmental standards and investor protections, are essential to a functional economy. Properly set and enforced, these standards check exploitation, pollution and speculation. In the process, they promote broad and rising prosperity, as well as public confidence.
The minimum wage is specifically intended to take aim at the inherent imbalance in power between employers and low-wage workers that can push wages down to poverty levels. An appropriate wage floor set by Congress effectively substitutes for the bargaining power that low-wage workers lack. When low-end wages rise, poverty and inequality are reduced. But that doesn’t mean the minimum wage is a government program to provide welfare, as critics sometimes imply in an attempt to link it to unpopular policies. An hourly minimum of $10.10, for example, as Democrats have proposed, would reduce the number of people living in poverty by 4.6 million, according to widely accepted research, without requiring the government to tax, borrow or spend.
IS THERE AN ALTERNATIVE? No. Other programs, including food stamps, Medicaid and the earned-income tax credit, also increase the meager resources of low-wage workers, but they do not provide bargaining power to claim a better wage.
We should all support the efforts to raise the minimum wage to $10.10/hour, and over a short time frame, to $15/hour. There is no substitute, and the GOP objections are not economic, but political.
Yes, we are in a changing economy, one with a shifting social contract. But those struggling at the bottom of the economic pyramid have little bargaining power: witness the efforts of workers at Wal-mart and fast food chains to get higher wages, which have been largely ineffective in changing the policies at those corporations. This is a social role that the federal government must play, which is why the law was passed in 1938, but the legislators left out automatic indexing of the minimum wage, which was a mistake.
The GOP’s efforts to stop this reasonable and long-overdue increase are pure politics, and have no economic merit. This recent letter to President Obama is signed by 600 economists — including Nobel laureates — advocating the $10.10/hr minimum wage.
We should work hard to increase economic opportunities in America, where one in five children live in poverty. And we need to start today.