Last week the President proposed raising the minimum wage to $9/hour in his State of the Union address, but what does that really mean? Well, for one, it means that a full-time worker earning minimum wage would still earn below the federal poverty line.
The Center for Economic Policy and Research (CEPR) just came out with a detailed yet easy-to-read (and short) piece on just how far below the poverty line a $9 minimum wage falls. Suffice it to say that a $9 minimum wage—even if you included benefits like tax credits and the payroll holiday—falls not only below the Supplemental Poverty Measure (which takes into account non-income benefits), but also well below the standard official poverty measure. In CEPR’s paper “The Minimum Wage is Just Too Damn Low!” you can see that, according to all of the most popular benchmarks, the minimum wage is at a historical low. Even measuring against inflation, average wages and productivity, the minimum wage is still far less than what it has been in the past and what it should be today.
In short, the math just doesn’t add up. If earning a minimum wage means a worker still has to live well below the poverty line, what’s the point of even having a minimum wage? A person working full-time should not have to work more than one job just to make ends meet!
So why haven’t we raised it yet? To tell you the truth, I really don’t know. Study after study has shown that raising the minimum wage does not negatively affect businesses. The U.S. Department of Labor cities a letter from leading economists including Lawrence Katz, Richard Freeman and Joseph Stiglitz, saying, “[i]n recent years there have been important developments in the academic literature on the effect of increases in the minimum wage on employment, with the weight of evidence now showing that increases in the minimum wage have had little or no negative effect on the employment of minimum wage workers, even during times of weakness in the labor market.” Quite simply, raising the minimum wage does not increase unemployment.
What are you waiting for? Urge Congress to wake up and raise the minimum wage!