The New York Times recently characterized the economic recovery that officially began in 2009 as a “golden era for corporate profits.” Indeed, corporate profits doubled between 2008 and 2011 and reached a record high.
However, these increased profits have fueled inequality and come at the expense of worker compensation. Profits are now a larger share of total national income, and wages and benefits are a smaller share than at any time since the 1960s. Over the last four decades productivity gains have overwhelmingly accrued to business and not labor. The Economic Policy Institute calculates that between 1973-2011 productivity increased by 80 percent, but median hourly compensation by only 11 percent.
The recovery has not lifted up those at the bottom of the income distribution, nor has it increased opportunity for the middle. According to the Women’s Foundation of California, one in three families in the state (with family members reporting a combined work effort of 39 or more weeks annually) are the working poor who earn less than $45,397 a year.
For Merleane S., a 19-year-old, single mom, her work shift on March 15 included taking and filling orders at a fast food restaurant in Palm Coast, Florida. She was earning the state’s minimum wage of $7.79 per hour. Similar to other U.S. workers, she was trying to make sure her family was secure.
That same day, in the nation’s capital, lawmakers in the U.S. House of Representatives unanimously voted against an amendment to H.R. 803, a job training bill. That amendment would have gradually increased the federal minimum wage from $7.25 an hour to $10.10 an hour by the end of 2015.
The amendment marked one of the most recent efforts regarding an issue that is gaining momentum nationally — an increased minimum wage. If the idea is approved, it would affect millions of workers across the income spectrum, including the middle class.
The minimum wage is back on the rise. Last month Sen. Tom Harkin and Rep. George Miller introduced the Fair Minimum Wage Act of 2013, which would raise the federal wage to $10.10. State legislatures aren’t waiting. The New York state assembly approved an increase to $9 plus indexing, the New Mexico state senate approved an increase to $8.50, and the Hawaii state senate and house each passed increases.
But that hasn’t stopped the doomsayers. The conservative Cato Institute called the minimum wage “zombie economics.” Paul Ryan said that “history is very clear” that it “costs jobs.” Marco Rubio said that “We have a lot of history to prove” that “raising the minimum wage does not grow the middle class.”
In fact, the historical record is quite clear. “Consider the Source: 100 years of Broken Record Opposition to the Minimum Wage,
Our Nation so richly endowed with natural resources and with a capable and industrious population should be able to devise ways and means of insuring to all our able-bodied working men and women a fair day’s pay for a fair day’s work. A self-supporting and self-respecting democracy can plead no justification for the existence of child labor, no economic reason for chiseling workers’ wages or stretching workers’ hours.
Enlightened business is learning that competition ought not to cause bad social consequences which inevitably react upon the profits of business itself. All but the hopelessly reactionary will agree that to conserve our primary resources of man power, government must have some control over maximum hours, minimum wages, the evil of child labor and the exploitation of unorganized labor. –FDR, May 1937
In his recent State of the Union address,
Big Food companies and their lobbying groups have lied to us many times. They convinced Congress to include tomato paste on pizzas as a vegetable. They say we need industrial, chemical-laden agriculture to feed the world. (Check out Anna Lappé’s new video Food MythBusters to learn that we don’t.) And Big Food has also spread the mythology that if the minimum wage is raised, food will become so expensive that none of us will be able to afford to eat out – or eat at all – again.
Yes, that’s a lie! On this Food Day 2012, our organizations are releasing a new report, A Dime a Day: The Impact of the Miller/Harkin Minimum Wage Proposal on the Price of Food. The proposed Fair Minimum Wage Act, introduced this year by Representative George Miller (D-CA) in the House and Senator Tom Harkin (D-IA) in the Senate would raise the federal minimum wage from $7.25 to $9.80 per hour over the next three years and the tipped minimum wage from $2.13 to 70 percent of the regular minimum wage.