Why the
Minimum Wage should really be raised to $15 an hour
By Robert Reich
Momentum
is building to raise the minimum wage. Several states have already taken
action — Connecticut has boosted it to $10.10 by 2017, the Maryland
legislature just approved a similar measure, Minnesota lawmakers just reached a
deal to hike it to $9.50. A few cities have been more ambitious — Washington,
D.C. and its surrounding counties raised it to $11.50, Seattle is considering
$15.00
Senate
Democrats will soon introduce legislation raising it nationally to $10.10, from
the current $7.25 an hour.
All this
is fine as far as it goes. But we need to be more ambitious. We should be
raising the federal minimum to $15 an hour.
Here are
seven reasons why:
1. Had the minimum wage of 1968 simply stayed even with inflation, it would be more than $10 an hour today. But the typical worker is also about twice as productive as then. Some of those productivity gains should go to workers at the bottom.
2. $10.10
isn’t enough to lift all workers and their families out of poverty. Most
low-wage workers aren’t young teenagers; they’re major breadwinners for their
families, and many are women. And they and their families need a
higher minimum.
3. For
this reason, a $10.10 minimum would also still require the rest of us to pay
Medicaid, food-stamps, and other programs necessary to get poor families out of
poverty — thereby indirectly subsidizing employers who refuse to pay more.
Bloomberg View describes McDonalds and Walmart as “America’s biggest welfare
queens” because their employees receive so much public assistance. (Some, like
McDonalds, even advise their employees to use public programs because
their pay is so low.)
4. A
$15/hour minimum won’t result in major job losses because it would put money in
the pockets of millions of low-wage workers who will spend it — thereby giving working families and the overall economy a boost, and
creating jobs. (When I was Labor Secretary in 1996 and we raised the minimum
wage, business predicted millions of job losses; in fact, we had more job gains
over the next four years than in any comparable period in American history.)
5. A
$15/hour minimum is unlikely to result in higher prices because most businesses
directly affected by it are in intense competition for consumers, and will take
the raise out of profits rather than raise their prices. But because the higher
minimum will also attract more workers into the job market, employers will have
more choice of whom to hire, and thereby have more reliable employees — resulting in lower turnover costs and
higher productivity.
6. Since
Republicans will push Democrats to go even lower than $10.10, it’s doubly
important to be clear about what’s right in the first place. Democrats should
be going for a higher minimum rather than listening to Republican demands for a
smaller one.
7. At a
time in our history when 95 percent of all economic gains are going to the top
1 percent, raising the minimum wage to $15 an hour isn’t just smart economics
and good politics. It’s also the morally right thing to do.
Call your
senators and members of congress today to tell them $15 an hour is the least
American workers deserve. You can reach them at 202-224-3121.
ROBERT B. REICH, Chancellor’s Professor of
Public Policy at the University of California at Berkeley and Senior Fellow at
the Blum Center for Developing Economies, was Secretary of Labor in the Clinton
administration. Time Magazine named him one of the ten most effective cabinet
secretaries of the twentieth century. He has written thirteen books, including
the best sellers “Aftershock" and “The Work of Nations." His latest,
"Beyond Outrage," is now out in paperback. He is also a founding
editor of the American Prospect magazine and chairman of Common Cause. His new
film, "Inequality for All," is now available on Netflix, iTunes, DVD,
and On Demand.