In thinking about the proposal today to raise the minimum wage gradually to $15 by 2025 one thing that is important to keep in mind is the rise in inequality over the last 50+ years.
Imagine you are holding a slinky. Now pull your hands apart, as you do the rings of the slinky stretch out so there is more distance between each ring. That’s income inequality in the United States over the last 50+ years.
Translating our slinky into wages, the distance between the bottom (the minimum wage) and the middle rings (median hourly earnings of full-time full-year workers) has stretched out.
The stretching has occurred congress has raised the minimum wage less frequently than it used to and when it has acted to raise the wage the increases have been relatively small.
To put Pennsylvania numbers on it, the minimum wage was equal to roughly half (51%) of the median wage for a full-time, full-year worker in 1968. Today the minimum wage at $7.25 is about 30% of the value of the minimum wage.
So it is not just that today’s minimum wage buys fewer things than it did, which is true, it is also the case that the minimum wage affords even less of a middle-class lifestyle than it used to.
Policy makers have purposefully, doing the bidding of the business lobby, driven a wedge between our communities making a significant number of people less well off than they would have been in the not to distance past.
Some folks have expressed dissatisfaction with the slow phase up of the minimum wage proposed today as well as its low level. For those folks I think it is helpful to think about where the minimum wage at $15 in 2025 will be relative to the median wage.
Now you have to make an educated guess about wage growth over the next few years but reasonable guess puts the minimum wage in 2025 at $15 at 57% of the median wage for a full-time, full year worker in Pennsylvania.
You can still argue that’s not enough but make no mistake it represents a much more ambitious proposal than we used to get out of Congress before the Fight For 15 was born.
The real action to keep your eye on as the Bill winds its way through congress is the elimination of the subminimum wage for tipped workers and the proposal to index growth in the minimum wage to the growth in median wages.
The restaurant industry will deploy their biggest celebrity chefs to protect their special subminimum wage that keeps mostly women in or near poverty.
The proposed index will add in the neighborhood of 33 cents to the minimum wage each year after 2025. That’s a pretty big deal in terms of fighting inequality and enough to drive the business community to reconsider the economic benefits of sedition.
The business community can accept a one time raise of the minimum wage every few years as the cost of doing business i.e. losing elections. But an index ends the game. It means they can never drive people into poverty to make a few bucks & that will be unacceptable to them.
So those I think are the real battles to keep your eye on over next few weeks. How bad the compromise is on the subminimum wage & indexing will be the real test of how far the progressive wing has come.
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