Margy Waller and Jonny Finity
The Mobility Agenda
For The Community Action New Narrative Initiative
ten years – the longest gap between changes in history – our national
policy on wages for entry-level workers increased recently, so
employers finally gave a raise to workers in the lowest paying jobs. As
of this July, these employers will offer workers the still woefully low
hourly pay of $6.55 an hour, a 70-cent increase.
Though this was the second increase in as many years as a result of the 2007 change in national policy,
employers paying minimum wage still offer less than the 1997 level,
which was equivalent to $6.88 an hour in today’s dollars. And while the
raise does little to immediately address our difficult current economic
situation, it is good for the long-term health of our communities.
In the US today, over 40 million jobs – about 1 in 3 – pay wages well below the mid-range.
The majority of these jobs lack worker benefits (such as paid sick
days, health insurance, or retirement accounts) as well as any career
advancement or training opportunities. Having so many of these low-wage
jobs weakens our economy and creates a lower standard of living for
everyone. Good jobs keep our communities strong by increasing
participation in our economy and democracy, and making sure that no one
falls too far behind.
It used to be that
employer gains from productivity were passed onto the workers who
helped to produce them. Productivity has increased 83 percent in the
last 25 years. Yet, as
this writer in the Miami Herald reminds us, employers have not been
holding up their end of the bargain. Corporate profits have risen over
200% since 1973, while real wages have been falling over the same
Our nation has become too reliant
on bad jobs – low-wage jobs without benefits – which weigh down the
economy. That is bad for everyone. We’ve turned this around before when
we improved manufacturing jobs with a combination of worker voices and
changes in public policy. Through the recent minimum wage increase,
Congress is asking employers to share prosperity with the communities
in which they operate. This policy recognizes that we need more good
jobs for a strong economy and democracy – and we should share the
benefits that come from hard work.
Raise too little, too late — make it $10 in 2010
By HOLLY SKLAR
Minimum-wage workers have been stuck in a losing game of ``Mother, May I‘’ with the federal government.
step forward when the government says yes to raising the minimum wage.
Workers step backward when the cost of living increases, but the
minimum wage doesn’t.
minimum-wage workers took frequent and big enough steps forward to make
overall progress. Since 1968, when the minimum wage reached its peak
buying power, workers have taken many steps backward for every step
The latest minimum-wage raise,
which took effect Thursday, is so little, so late that workers will
still make less than they did in 1997, adjusting for the increased cost
of living, and way less than in 1968.
decade between the federal minimum wage increase to $5.15 an hour on
Sept. 1, 1997, and the July 24, 2007, increase to $5.85 was the longest
period in history without a raise.
Gas prices rose from $1.23 to $2.97 a gallon in the same period. Now it’s more than $4.
new $6.55 minimum wage is lower than the 1997 minimum wage, which is
worth $6.88 in 2008 dollars, and way lower than the inflation adjusted
$9.86 minimum wage of 1968. For full-time workers that translates into
$20,509 a year at the 1968 rate, compared with just $13,624 at the
hourly rate of $6.55.
The minimum wage
does not provide a minimally adequate living standard — and it still
won’t when the last scheduled raise to $7.25 takes place next July.
Workers are constantly choosing what to go without — ‘’heat or eat,‘’ child care or healthcare.
aides can’t afford to take sick days. Retail clerks and child-care
workers depend on food banks. Security guards sleep at homeless
It wasn’t always this way. Workers used to share in the gains of rising worker productivity.
1947 and 1973, worker productivity rose 104 percent and the minimum
wage rose 101 percent, adjusting for inflation. The middle class grew.
1973 and 2007, productivity rose 83 percent and the minimum wage fell
22 percent, adjusting for inflation. Average worker wages fell 10
percent while domestic corporate profits rose 219 percent, and profits
in the disproportionately low-wage retail industry jumped 346 percent.
More jobs paid poverty wages.
education does not protect you from falling wages. The
inflation-adjusted wages of recent college graduates were lower in 2007
than they were in 2001.
There’s been a
massive shift of income from the bottom and middle to the top. The
richest 1 percent of Americans has increased their share of the
nation’s income to a higher level than any year since 1928, the eve of
the Great Depression.
Our modern robber
baron age features people like Countrywide Financial CEO Angelo Mozilo.
He pocketed $103 million last year as the subprime mortgage ponzi
scheme morphed into the worst financial crisis since the Depression.
wage workers don’t put raises into predatory lending, commodity
speculation or offshore tax havens. They recycle their needed raises
back into local businesses and the economy through increased spending.
of the ‘’SurePayroll Top Ten States for Small Businesses‘’ in 2008 have
had state minimum wages above the federal level. They include
Washington, California and Oregon, three of the four states with the
Minimum wage raises are
stimulus for an economy tanking from a housing bubble gone bust,
sharply higher oil prices, extreme inequality, unsustainable debt, and
fraud and speculation crowding out productive investment.
wages benefit business by increasing consumer purchasing power,
reducing costly employee turnover, raising productivity, and improving
product quality and company reputation. They reinforce long-term
Let Justice Roll — a national
faith, community, labor and business coalition, which I advise — calls
for a minimum wage of $10 in 2010. That would bring the minimum wage
closer to the value it had in 1968, a year when the unemployment rate
was a low 3.6 percent.
It will bring the
minimum wage closer to the ‘’minimum standard of living necessary for
health, efficiency and general well-being of workers‘’ promised by the
Fair Labor Standards Act establishing the minimum wage 70 years ago.
It will strengthen the foundation under our unsound economy.
Holly Sklar is co-author of A Just Minimum Wage: Good for Workers, Business and Our Future.