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Minimum wage is too minimal

by Jim Longworth

Thanks to the NC General Assembly, a slew of new campaign laws went into effect last week, including a repeal of the “stand by your ad” law, so that candidates will no longer be required to declare that they “approved this message.” That’s understandable because the new reforms also provide for an increase in the maximum allowable donation to political campaigns while lessening disclosures. Why the change? Because our state lawmakers believed that the limits on political donations should keep pace with inflation. If only they applied that same rationale to minimumwage rates.

The hypocrisy of our elected officials couldn’t be more transparent.

It’s also pretty dispassionate and offensive. These politicians want donations to their re-election campaigns to increase, yet they seem to care nothing about the meager wages of their constituents. Not so in at least 13 other states where increases in minimum wage just went into effect. They include Arizona, Colorado, Connecticut, Florida, Missouri, Montana, New Jersey, New York, Ohio, Oregon, Rhode Island, Vermont and Washington state.

Of course, the rate hikes in those states are minimal and mostly symbolic, but it’s a start, and, in some cases, may have triggered substantive increases in select cities. For example, San Jose’s minimum wage just rose to $10.15 per hour, while San Francisco’s rate jumped to $10.74. And, voters in Seattle just agreed to give 6,000 airport workers a raise from $9.19 to $15 per hour. Moreover, of the 13 states who just raised minimum wage, 10 of them have tied those increases to the cost of living index.

On the other hand, 31 states that don’t currently mandate a higher minimum wage must adhere to the federal hourly wage, which, as Huffington Business columnist Dave Jamieson points out, hasn’t been increased since 2009. That’s the year Congress so generously raised the rate to a staggering $7.25 per hour. Even worse, according to The Economist, in the years since then, the real value of that wage rate has slipped back to where it was in 1998.

Clearly it’s time for Congress to establish a federal minimum wage that gives workers a fighting chance to survive. Last year, US Sen. Tom Harkin attempted to do just that when he introduced the Fair Minimum Wage Act, which calls for a minimum wage of $10.10 per hour, phased in over two years. But guess what? The bill has stalled in committee, and there have been no roll call votes to advance it. Opponents of the bill continue to perpetuate the same old myth: “If we raise minimum wage, businesses will have to cut jobs.”

Thankfully, a number of respected organizations and economists have come forward over the past year to dispel that myth. The Economic Policy Institute, for example, conducted an extensive nationwide survey, and in March 2013 released a report which concluded the following: “Raising the minimum wage would help reverse the ongoing erosion of wages that has contributed significantly to growing income inequality. At the same time, it would provide a modest stimulus to the entire economy as increased wages would lead to increased consumer spending, which would contribute to GDP growth and modest employment gains.” By the way, those modest gains would include the creation of an estimated 140,000 new jobs.

Meanwhile, the Chicago Booth School of Business chimed in with its own survey, concluding that “leading economists agreed by a 4-to-1 margin that the benefits of raising and indexing the minimum wage outweigh the costs.” Princeton professor Paul Krugman put it all much more succinctly, saying that a rise in minimum wage would have “little if any negative effect on employment.” In addition, Bloomberg News reported that “studies find minimum wage increases provide an economic boost…

as strapped workers immediately spend their raises.” And the Harvard Business Review is on record saying that raising the minimum wage will benefit employers who, by paying the higher rate, will experience a reduction in employee turnover and increased productivity.

Today over 30 million Americans are paid minimum wage, and they deserve better. They deserve a living wage. That’s why we need to pass the Fair Minimum Wage Act. Until then, my solution is for everyone making $7.25 per hour to run for the state legislature this year. If elected they can then vote on raising the minimum wage, while making a respectable salary, and raking in lots of maximum allowable campaign donations to boot. I’m Jim Longworth, and I approved this message. !

JIM LONGWORTH is the host of “Triad Today,” airing on Saturdays at 7:30 a.m. on ABC45 (cable channel 7) and Sundays at 11am on WMYV (cable channel 15).

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