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Workers need more than current wage gives

Eight years without an increase in the federal minimum wage!
The purchasing power of minimum wage was 31% less in 2004 than the purchasing power of the minimum wage in 1968. It has dropped 14% since it was last increased in 1996.

In 2004 the federal minimum wage, relative to the average wage, was 33%. This is the lowest value since 1949. This is certainly not the only reason, but a major reason, for the growing economic inequity in the United States.

I wish that my position was purely altruistic, but it is not. I do not want my grandchildren to live in a society that has a growing mass of economically deprived people. There is a high correlation between poverty, ignorance, crime and violence. Our grandchildren will live in a less secure society unless we can successfully do something to stem the growing numbers of persons living in poverty.

Thirty-three million people in the United States live in poverty. Of this 33 million, 12 million are children. The United States is the only economically advantaged nation in the world which tolerates such a level of poverty among its citizens.

Let’s look at some of the conventional wisdom and/or myths concerning minimum wages:

Increasing minimum wages contributes to inflation.

Certainly, increased wages add to the increasing cost of products and services. Must the lowest paid worker bear the burden of holding inflation down? Should all of the wages in the United States be frozen? How about the annual automatic raises that Congress has implemented for themselves? The historic average for inflation is about 3%. I seriously doubt that holding minimum wage to its historic low will prevent future inflation.

We will drive our industry to other countries with cheaper labor.

At our present low minimum wages, we cannot compete with the third world countries in labor intensive work like the garment industry. These industries are already lost for the American worker. How can we possibly compete with third-world countries like Bangladesh, who not only have very low wages, but also sanctions a 72 hour work week for its people.

Small businesses will suffer and fewer jobs will be available to workers.

Contrary to conventional wisdom, the states that have implemented a minimum wage that is higher than the federal minimum wage experienced a greater growth in both number of small business and in the number of workers employed. Lower paid workers spent their increased income, thus stimulating the economy. The 1999 Annual Report of the Presidents Council of Economic Advisors concluded that the 1996 federal minimum wage increase resulted in no adverse employment effects.

It just affects teenagers who don’t really need the money.

Sixty-one percent of the persons working for minimum wage are female. Three million and four hundred thousand children have at least one parent who works for minimum wage.

It’s past time!

Archie King, LPC, is a human resources consultant who lives in Madison. His column appears from time to time in the Mississippi Business Journal. E-mail him at aking4@jam.rr.net.


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