Weighing In On the Minimum Wage Debate
April 10, 2014
With President Barack Obama proposing to raise the federal minimum wage of the U.S. in his State of the Union Address from $7.25 an hour to $10.10 an hour, there is a lot of controversy over the long and short term effects.
Many economists do not agree on whether increasing the wage will benefit the general public because of the many issues surrounding the choice: Will the raise create more unemployment? Raise the cost of living? Shut down small businesses?
Today, more adults work minimum wage paying jobs than teenagers, which means they’re paying for rent, cars, utilities, food, their children, and all other expenses on $7.25/hour.
Currently, the federal minimum wage does not allow a family to live above the poverty level on a full time work schedule—which right now most cannot even achieve because many corporations are cutting hours to go around paying the benefits of full time employees.
From an Economic Policy Institute study, “a full-time worker would need to earn $11.06 an hour in 2011 to keep a family of four out of poverty.”
The monetary value of the characteristics that make up poverty, though, is outdated in today’s standards. According to the National Center for Children in Poverty, the U.S. government’s definition of poverty “does not include other aspects of economic status, such as material hardship (for example, living in substandard housing) or debt, nor does it consider financial assets (including savings or property).”
In the past, a minimum wage salary at full time could support a family to live, but around the 1980s, that reality became nonexistent as the wage stopped increasing with inflation.
In 1968 — when a family could actually live on minimum wage — the wage was $1.60 an hour which would be the equivalent of $10.56 an hour today with inflation (Huffington Post).
One solution economists suggest is to get rid of the minimum wage completely and let employers be competitive with one another in their wages in the market.
Another solution is for the U.S. government to put more money into the funds for earned income tax credit which benefits families and individuals who do not reach a certain income per year and in turn receive the tax money back from the government.
The truth is that there are millions of Americans living in poverty; living day-to-day with just getting by with little possibility of money or time to get a higher education.
If minimum wage — the least amount of money on eight hours a day, five days a week —worked to pay for a family to survive above poverty in 1968, there’s no reason it shouldn’t work today. We need to fight for this increase.