At the end of last week, Democrats in Lansing, led by State Senator Bert Johnson, proposed that we increase Michigan’s minimum wage to $10 an hour, from $7.40, where it’s been set for the past five years, in spite of the rising cost of living. Given that it would make Michigan’s the highest minimum wage in the country, and has almost no chance of passing the Republican dominated legislature, I suspect the move was more symbolic than anything else, but I’d love to be proven wrong. I’d love to see the Democrats come out swinging, and really fight for this, but I can’t help but think that this is just another hollow gesture intended to rally the long-neglected base of the Michigan Democratic party. Regardless of why the idea’s being floated, though, it’s something that we should seriously consider, and discuss as a community.
The conservatives, of course, will argue that paying people $10 an hour will jeopardize our still fragile recovery, and drive even more individuals into poverty, as companies with undoubtedly stop hiring low-skilled workers and slow production. It’s not altogether clear, however, that that would actually happen. Take, for instance, the case of Washington State. (The following comes from at 2007 article in the New York Times.)
…Just eight miles separate this town on the Washington side of the state border from Post Falls on the Idaho side. But the towns are nearly $3 an hour apart in the required minimum wage. Washington pays the highest in the nation, just under $8 an hour, and Idaho has among the lowest, matching 21 states that have not raised the hourly wage beyond the federal minimum of $5.15.
Nearly a decade ago, when voters in Washington approved a measure that would give the state’s lowest-paid workers a raise nearly every year, many business leaders predicted that small towns on this side of the state line would suffer.
But instead of shriveling up, small-business owners in Washington say they have prospered far beyond their expectations. In fact, as a significant increase in the national minimum wage heads toward law, businesses here at the dividing line between two economies — a real-life laboratory for the debate — have found that raising prices to compensate for higher wages does not necessarily lead to losses in jobs and profits…
Furthermore, it’s not true, as Republicans love to tell us, that minimum wage jobs are just held by low-skilled teenagers, desperate for experience, and without families of their own to feed. As the Wall Street Journal recently reported, 284,000 Americans with college degrees found themselves working for minimum wage last year. And, while it’s true that a majority of minimum wage employees aren’t heads of households, many are, and they’re desperately struggling to keep afloat. 51% of minimum-wage workers are over the age of 24, and roughly a third of them live below the poverty line, which is roughly $33,000 for a family of four. (note: 64% of minimum wage earners are women.)
People across the country, seeing the earnings of working class Americans steadily regressing, as the tax burden is increasingly being shifted onto their backs, are beginning to demand a change, though. In spite of the efforts of pro-corporate groups like ALEC, that are pushing wage suppression bills across the nation (since 2011, 105 wage suppression bills have been introduced in 31 states), a dozen states have seen their minimum wages rise already in 2013. And President Obama is not only publicly calling for the federal minimum wage to rise to $9 per hour, from $7.25, where it presently stands, but for it to be tied to the rate of inflation from this point forward. (As Elizabeth Warren has pointed out, the federal minimum wage would be $22 today if it had kept pace with inflation since its inception.)
I know that the owner of Subway has said that your $5 footlong would be in jeopardy if we allowed the minimum wage to rise, but, the truth is, corporate profits have never been higher, and there’s no reason to think that companies couldn’t absorb the costs associated with paying a non-poverty wage. While raising the minimum wage may not do much to slow the ever increasing income inequality we’re seeing in America, it might just be enough to keep a few thousand more working people from succumbing to the forces of poverty, and that alone, I suspect, would make it worthwhile. And, even if close to half of those earning minimum wage are young people who live with their parents, and not single mothers, would it really be that bad for society if they had a little more money in their pockets? We tried trickle down economics for several decades now, and it hasn’t worked. I say it’s time to try something new. Let’s try passing legislation that puts more money into the hands of people who actually spend it, and keep the economy moving, instead of those who hoard their cash in offshore banks.
And, one more thing… I get that people don’t want to pay $5.15 for a $5 footlong, or 25-cents more for their Wal-Mart spray cheese, but, the truth is, we’re already paying more than we think. We subsidize the “everyday low prices” we enjoy at places that rely on minimum wage workers by paying for the food stamps and health care that keep their employees healthy enough to keep coming to work each day. As much as people like to talk about the “free market”, the truth is that we don’t have one. Without the social programs that we all pay for, Walmart employees would by dying in the aisles.