In his State of the Union Address Tuesday night, President Obama renewed his call to do something about the growing income disparity in the U.S. by once again asking Congress to pass legislation to raise the federal minimum wage. Not only that, the President has vowed to carry this message across the country in an effort to rally the American people around this goal in this “year of action.”
What the President will find is millions of allies that agree with his argument for raising the minimum wage. The only question is: Will the American people rise to the challenge?
In the current work environment that Harold Meyerson, editor-at-large at The American Prospect and columnist for The Washington Post, has dubbed the “Age of Anxiety,” will the President find an American workforce too anxious and worried about keeping their heads above water to join the fight?
Without a doubt, a clear majority of Americans believe that the federal minimum wage should be increased to at least $10.10 per hour. This would go a long way to beginning to shrink the income gap, but if the minimum wage had kept up with worker productivity, it would actually be closer to $22 per hour. The $10.10 per hour the President is calling for is a small ask comparatively. The minimum wage as it stands at $7.25 has not even kept up with inflation. It’s not surprising considering that Congress has only passed legislation to increase the minimum wage three times over the last thirty years.
Meanwhile worker productivity has increased “80% but wages have only increased by 11%.” At the same time corporate profits have soared and the top American CEO’s are making 273 times more than their average workers. This economic imbalance is hindering the economic recovery for millions of people.
Since the great recession began in 2007, the already shrinking middle class has all but disappeared. “According to a National Employment Law Project study in 2012, low-wage jobs (paying less than $13.83 an hour) made up 21 percent of the jobs lost during the recession but more than half of the jobs created since the recession ended. Middle-income jobs (paying between $13.84 and $21.13 hourly) made up three-fifths of the jobs lost during the recession but just 22 percent of the jobs created since.” (The American Prospect)
Yet the opposition to raising the minimum wage has not relented. Rep. Paul Ryan, chair of the House Budget Committee and failed GOP Vice Presidential candidate has been pushing the argument that raising the minimum wage hinders employers from hiring and would hurt minorities and low income people the most. This line of opposition is not new and has been pushed by conservatives for decades. Yet facts do not bear that out. There have been many studies that have investigated these claims and found that raising the minimum wage has no effect on hiring or job losses.
Moreover, raising the minimum wage is one of the most effective ways to address rising inequality; a rising tide lifts all boats. Like when Henry Ford first created the assembly line for car manufacturing, he eventually realized that being able to produce thousands of cars more quickly and efficiently didn't matter if only a small portion of the population could afford to buy a car. Through negotiation and more importantly, worker organization, Ford realized that paying his workers enough to afford to buy the cars they were making would increase his own profits. That created a symbiotic relationship between CEO and labor that would help to build and sustain a burgeoning middle class that grew for decades.
Since those days, the argument has been turned on its head. Now, even low wage workers afraid to lose the low paying jobs they have are arguing against raising the minimum wage, pitting worker against worker. So will the American people unite to bring economic growth back into balance?
Already, Senator Tom Harkin of Iowa has taken to the Senate floor to push for the minimum wage increase. The President even referred to Senator Harkin in his speech, saying “Today, the federal minimum wage is worth about twenty percent less than it was when Ronald Reagan first stood here. Tom Harkin and George Miller have a bill to fix that by lifting the minimum wage to $10.10. This will help families. It will give businesses customers with more money to spend. It doesn’t involve any new bureaucratic program. So join the rest of the country. Say yes. Give America a raise.”
Given the strong opposition in Congress, the likelihood of getting legislation passed depends on how much pressure can be put on those standing in the way. Already some states have begun to raise their state minimum wage laws on their own. A path that the President encouraged while acknowledging that the federal minimum wage needs to be raised regardless:
“To every mayor, governor, and state legislator in America, I say, you don’t have to wait for Congress to act; Americans will support you if you take this on. And as a chief executive, I intend to lead by example. Profitable corporations like Costco see higher wages as the smart way to boost productivity and reduce turnover. We should too. In the coming weeks, I will issue an Executive Order requiring federal contractors to pay their federally-funded employees a fair wage of at least $10.10 an hour – because if you cook our troops’ meals or wash their dishes, you shouldn't have to live in poverty.”
Americans do and will support mayors, governors and state legislators who take this on, but how will they let their support be known is the question.