When thinking about the minimum wage, it is easy to conjure up the outdated image of teenagers flipping burgers or making milkshakes at the neighborhood restaurant. Minimum wage jobs are seen as a rite of passage into adulthood, something to be left behind once young people graduate from school and settle into permanent jobs.
Yet for too many workers, these minimum wage jobs are permanent jobs. Every day, millions of Americans struggle to support families while earning the minimum wage. These workers are frequently forced to forgo basics — food, housing, clothing — or even rely on public assistance to make ends meet. As we approach the new year, legislation has been proposed on both the federal and state levels to increase the current $7.25 per hour minimum wage to $10.10 per hour and New Hampshire’s minimum to $9. The New Hampshire AFL-CIO supports these proposals as good economic policy and a much-needed boost to millions of families struggling to make ends meet.
As our economy struggles out of recession, many Americans have been forced to take jobs previously held only by teenagers or housewives looking to earn a little extra money. Today, less than a quarter of minimum-wage workers are teenagers. Most are breadwinners in their families, and 55 percent work full time. The median age of a low-wage worker is 34 years old. And 56 percent of all minimum-wage earners are women, according to the Economic Policy Institute.
Even as the demographics of minimum-wage workers have shifted, their pay remains too low to support a family. The annual income for a full-time employee making the minimum wage of $7.25 an hour is $15,080. Living below the poverty line, that is not enough to afford rent on a two-bedroom apartment in New Hampshire and all of the other 49 states, The New York Times has reported.
According to a study by researchers at the university of California-Berkeley, more than half (52 percent) of front-line fast-food workers must rely on at least one public assistance program to support their families. As a result, the fast-food-industry business model of low wages, non-existent benefits, and limited work hours costs taxpayers an average of nearly $7 billion every year, the National Employment Law Project reports. Jobs should lift workers out of poverty, not trap them in poverty.
If the federal minimum wage had kept up with inflation, today it would be about $10.75 an hour, instead of $7.25. If the minimum wage had kept up with productivity, it would be $18.75. If it had grown at the same rate as wages for the wealthiest 1 percent, it would be over $28 per hour.
Raising employee wages would increase purchasing power, create more jobs and lift the economy.
On the federal level, the benefits of the Fair Minimum Wage Act, which would incrementally increase the minimum wage to $10.10 by 2015, are more than apparent. More than 30 million workers would be positively affected by this bill. It would boost consumer demand, generate $32 billion in new economic activity, and create 140,000 new full-time jobs, NELP has shown. The law would have a significant impact on the millions of children living in poverty in this country, as 23.3 percent of all children in the U.S. have a parent who would be helped by a raise in the minimum wage, according to Economic Policy Institute data.
More than four out of five economists say the benefits of increasing the minimum wage would outweigh the costs. Further, a study from the Center for Economic and Policy Research found that raising the minimum wage to $10.10 would create jobs while causing no reduction in the availability of minimum wage jobs.
Raising the minimum wage is crucial to our future economic growth. Five of the six fastest-growing sectors of the American economy are in low-wage industries — home health aides; customer service representatives; food preparation and serving workers; personal and home care aides and retail salespersons, Bureau of Labor Statistics data show. To rebuild a strong middle class and create an economy of shared prosperity, our country must pay fair wages in these growing sectors.
More than 80 percent of the American public supports raising the wage to $10.10 an hour, and 74 percent say it should be a top priority for Congress. It is time for the actions of our elected representatives to reflect the wishes of their constituents. Only by ending this vicious cycle will we be able to help America achieve an economy that truly works for all Americans.
Mark S. MacKenzie is president of the New Hampshire AFL-CIO.