The minimum and/or real wage blues

AntiPovertySoldierOn February 17, Twin Cities’ area janitors representing Local 26 of the Service Employees International Union (SEIU) conducted a 24-hour strike after contract negotiations had broken down. The demands of the SEIU were to increase the hourly wage (currently $14.62) for full-time workers by $1 during each of the next three years. The union’s proposal also asked that part-time workers earn a minimum wage of $15 per hour by the end of 2018.

Three weeks later, a second strike was averted when both sides reached a compromise that will increase the pay of both full-time and part-time janitors by a little more than 12 percent over a four-year period. The efforts by Local 26 shadowed a number of comparable service proposals throughout the nation and a burgeoning grassroots movement toward a $15 federal minimum wage.

A number of cities across America either have or are in the process of developing a $15 minimum wage in at least some of their service sectors, including New York, Washington, Pittsburgh, Los Angeles, San Francisco, Portland, and Seattle. And workers in Milwaukee, Des Moines, and Kansas City have adroitly used the 2016 presidential election season to bring light to their push for a $15 minimum wage in their respective cities.

Of course, the debate over the minimum wage in American politics has been going on for decades. In the late 1970s, nearly 90 percent of economists surveyed by the American Economic Review believed that raising the minimum wage would increase unemployment, particularly in the low-income sector. As the years have gone by, such a majority perspective has waned considerable and today yields a much more equitable distribution of those who agree versus those who disagree with that sentiment.

On January 14, 2014, more than 600 American economists, including seven Nobel Memorial Prize laureates in the economic sciences, signed a letter addressed to the president, Senate, and House of Representatives encouraging legislation to increase the federal minimum wage to $10.10 per hour by 2016.

Just two weeks later, I personally was afforded the tremendous honor to witness President Obama’s 2014 State of the Union Address as the guest of Minnesota Congresswoman Betty McCollum. During his address, the president acknowledged fellow Minnesotans John Sorrano and John Puckett of Punch Pizza, who had proactively raised the minimum wage of their workers to $10 per hour. Since that time, Sorrano and Puckett have increased wages for Punch Pizza employees once again.

So, in just two short years the initial proposal for a $10 minimum wage has quickly swelled to a movement for $15 per hour. Those in favor of a federal wage increase no doubt view this as progress. Yet a recent report by the Pew Research Center, a nonpartisan think tank in Washington, suggests that an increase to a minimum wage of $15 might not be enough.

The Pew report illustrates that since 1964, “real wages” have consistently remained flat and even fallen for those in the middle and working classes. In essence, this means that while incomes have increased over the years, they have failed to keep pace with inflation, resulting in decreased purchasing power for the majority of Americans.

The Pew researchers go on to state that “in real terms the average wage peaked more than 40 years ago: The $4.03 per hour rate recorded in January 1973 has the same purchasing power as $22.41 would today.” And since 2000, the Bureau of Labor Statistics reveals that only those earners in the 75th percentile and above have seen a real wage increase, with those at the 90th percentile and above seeing the biggest gains.

A number of other studies have further demonstrated how flat and falling wages have impacted millions of Americans.

For example, MIT’s Living Wage Calculator shows that an adult with two children living here in Ramsey County would require a wage of approximately $26 per hour to achieve economic security. Likewise, the National Low-Income Housing Coalition reports that “In order to afford the rent and utilities for a safe, modest two-bedroom apartment in the private housing market, a Minnesota worker must earn $16.46 per hour, 40 hours a week, all year long.”

In 2016, there are nearly 50 million Americans living below the poverty line, which is more than at any other time in the nation’s history. In addition, an estimated 90 to 100 million United States citizens can be classified as economically insecure. If our society cannot find a way to produce living wage jobs and make sure that wages keep up with inflation, won’t the number of poor just continue to grow and grow?

Who then, will be able to purchase anything?

 

Clarence Hightower is the executive director of Community Action Partnership of Ramsey & Washington Counties. Dr. Hightower holds a Ph.D. in urban higher education from Jackson State University. He welcomes reader responses to 450 Syndicate Street North, St. Paul, MN 55104.