Minimum Wage = Minimal Decency

By Mimikatz

Once again last week the GOP reaffirmed its commitment to family values and decency by voting down a Democratic effort to increase the Minimum Wage.  In the Senate 8 Republicans joined Democrats in a 52-46 vote to cut off debate, with  60 votes required to proceed to a vote.   Currently $5.15, or $10,712 per year, the U.S. minimum wage has not been increased since 1998.  During that time period, Congress has increased its own pay by $35,000.  The increases to congressional pay are thus more than 3 times the minimum wage; Congress pays itself over fifteen times the minimum wage.

Meanwhile, the purchasing power of the minimum wage has hit a 51-year low.  The high point was forty years ago, when the minimum wage was worth almost twice what it is worth now.  Of course, in those days the average CEO made 25 times what the average worker made, while now CEO pay averages  a whopping 262 times the average worker’s pay.   While 21 states have higher minimum wages, an increase would benefit an estimated 7.3 million workers, three quarters of whim are adults over 20, and disproportionately women and minorities and their families.  The increase would also help the 8.2 million workers making just over the minimum in order to keep wage parity.   Ironically, the Senate defeated and the House refused to vote on increasing the minimum wage at a time when opinion polls show that an all-time high 83% of Americans support increasing the minimum wage by $2.00, nearly half of them strongly supporting such a move.  And rightly so, since recent studies on the impact of state minimum wage increases showed no or very minimal loss of jobs.  Moreover, the public, unlike the GOP, understands that this is an issue of fairness and decency.

Making it quite explicit where their priorities lie, the House GOP leadership, in their unending effort to give the already-have-mores a whole lot more, also found time last week to serve notice that while they are abandoning, for now, the attempt to repeal the Estate Tax, their non-negotiable substitute measure would exempt from the tax estates up to $5 million per individual ($10 million per couple), tax the amount between $5 million and $25 million at the capital gains tax rate (15%, rising to 20% in 2011) and the amount over $25 million at twice the capital gains rate.  Currently, the estate tax rate is 45% of the amount over $2 million per person or $4 million per couple.

The Democrats plan to make increasing the minimum wage a cornerstone of their agenda.  While increasing the minimum wage would modestly improve the lives of millions of workers at the bottom of the scale, the estate tax reductions benefit only .1% of the population, but benefit them handsomely, in the tens of millions of dollars and up into the billions.   Anyone who seeks to understand our rising income inequality need look no farther than these two measures to see that it is an artifact of policy choices, not an accident or the work of "the market."  And for anyone who wants to see this picture change, no issue could more dramatically highlight the differences between the two parties.

Comments

[DHinMI]

Politically, this is a "gimme." Raising the minimum wage doesn't directly affect many workers, but every time it's discussed the GOP cries "class warfare!" in an attempt to prevent discussion about economic fairness, because they know that raising the minimum wage is extremely popular with voters. I'm glad to see Dems working with labor and public interest groups to push minimum wage ballot initiatives in several states, because it's a great way to advance public policy and in the process reap some political benefits.

[Mimikatz]

The NYT business section yesterday had an article showing that income inequality has now reverted to the 1930 level, just after the Crash, but befpore the steady lsoses of the early 1930's. The rich (top 1% and top .1%) are getting a rising share of national income, while the top 10% has only gotten back to the level of the early 1920's. The years from 1945-1985 were indeed, as I remember them, years of much greater equality. This situation is clearly unsustainable, and derives directly from tax and other policies of the Reagan and especially GW Bush years that benefot the very rich at the expense of everyone else. Raising the minimum wage is a small start in righting that imbalance.

[janinsanfran]

Having worked on a couple of local and state wide initiatives to raise the minimum wage, I have to say that Democrats should grab this and run. I never did anything so easy. Most people who make the minimum wage or close to it, don't vote. But among people who do vote, if you can get across to them how low the minimum actually is, you instantly get across the board, even across Party, approval -- in the 70 percent range. I think the way this works is that no one n the voting class can imagine trying to live on the minimum.

In an initiative situation, the only people opposed to raising the minimum are the very few employers who would have to pay it -- the thing is a slam dunk.

I'm not sure putting a minimum wage initiative on the ballot increases a progressive turnout, but it is close to a sure thing for an electoral win and we need all the little wins we can get.

[David F. Prenatt, Jr.]

How would you respond to the position that an expansion of the Earned Income Tax Credit is a much more effective and equitable way of helping the working poor than raising the minium wage?