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$15.00 Federal Minimum Wage Makes Economic Sense For Nation

February 20, 2021

This week it was announced the largest retailer in the nation had adjusted its wage scale for its employees. Walmart announced it will give 425,000 employees a raise, a move that will increase its average pay to above $15 an hour. While this news was being made Congress remains stuck in the mire debating whether, or not, they should do anything to lift the federal minimum wage above $7.25 an hour.

Granted, the move by Walmart (a company I have refused to shop at for a host of reasons over the past 15 years) still will have a minimum starting wage that will remain at $11 an hour. Starting March 13, however, the business stated it will pay store workers who stock shelves or support its e-commerce business $13 to $19 an hour, depending on their role and store location.

In other words, even Walmart is moving in the direction of progress when it comes to a living wage.

In Washington the drama over this issue is mostly taking place within the Democratic Covid relief bill which calls for an increase of the $7.25 minimum wage to $15.00 on the following schedule:

•$9.50 upon enacting

•$11 at the 1-year mark

•$12.50 at the 2-year mark

•$14 at the 3-year mark

•$15.00 at the 4-year mark.

Not exactly the most robust time-frame for the workers of the nation, but paced in such a way to relax some of the more ardent conservatives who never seek ways to increase wages for poor people. We are hearing conservatives say in this strained economic environment, due to the pandemic, that it is the wrong time to increase the minimum wage. But let us not forget they can never find a good time to increase wages for workers!

Congress last passed a minimum-wage increase in 2007. The current federal minimum, $7.25 an hour, is about 29 percent below its 1968 peak when adjusted for inflation. When it comes to the efforts by states there are now 29, along with the District of Columbia, which have higher minimums. Also, seven states plus the District of Columbia are phasing in the $15-an-hour threshold. Clearly, the trend lines are obvious.

One of the arguments I have made for years on behalf of raising the federal wage is that an increase would reduce federal spending because fewer people would need safety-net programs like food stamps or Medicaid.  The bump from $290 a week to $600 a week would lift millions of families out of poverty. More than a quarter of the workforce would see a rise in wages.

In 2016, the Economic Policy Institute found that, among recipients of public assistance, most work or have a family member who works; and they are concentrated at the bottom of the pay scale. Raising wages for low-income workers would “unambiguously reduce net spending on public assistance, particularly among workers likely to be affected by a federal minimum-wage increase.”

The second main thrust of why I support such an increase is due to the power and punch of the federal government. It is a massive purchaser of goods and services and the impact the higher wages would have on the entire economy would be most beneficial.

We have all heard the rhetoric that ‘if you raise the minimum wage prices will just go up’. How is it that lingo is used over and over but the same conservatives who make such statements would never argue that companies who received $1.9 trillion in tax cuts should lower their prices? Or explain why executive salaries need to be 200-500% of the average worker’s salary.

My bottom line when it comes to this issue is based on economics and basic humanity for workers. Increased consumer spending creates increased demand for jobs. That is a fact. When we percolate more money and circulate it in the economy more jobs will be created. And then there is the tough message we simply have to impart to those business people who need to hear it.

If you can’t pay your employees a living wage, you don’t deserve to be in business.

And so it goes.

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