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Viewpoint: The case for raising minimum wage

BY COLLEGE DEMOCRATS

Published February 24, 2014

While the U.S. economy has largely emerged from the Great Recession, income inequality persists as a true economic crisis. Wages are stagnant, the cost of living continues to rise and opportunities for economic improvement are limited. One concrete way that we can address this worsening inequality is to raise the minimum wage. Last year, thousands of fast food workers went on strike across the country calling for a living wage. At $7.25 per hour, the federal minimum wage has not been raised since 2009. This means a full-time minimum wage employee with a family still lives below the poverty line. With workers pushing fair pay proposals, the time has come to raise the minimum wage.

Last week, President Barack Obama signed an executive order that mandated federal contractors pay their workers at least $10.10 per hour. While more must be done to increase the minimum wage nationally, this is a good step toward raising the federal minimum wage, which would boost the earnings of 16.5 million workers.

Minimum wage impacts nearly all Americans. About 80 percent of all college students work part-time jobs, many at or near the minimum wage. Last year, 284,000 college graduates worked minimum wage jobs, making it nearly impossible for them to independently support themselves or pay off their school loans. A full-time minimum wage worker’s salary is just $15,080 per year. To put this in perspective, it would take nearly seven years to pay in-state tuition for four years at the University of Michigan on this salary, without taking into account the cost of housing, food and other basic living expenses.

However, the minimum wage does not just affect young people. According to the Bureau of Labor Statistics, and contrary to what many people believe, about half of all minimum wage workers are over the age of 25, and many have the added responsibility of supporting families and children. This summer, mothers, fathers, students and senior citizens went on strike demanding a wage they and their families can survive on.

Not only is the minimum wage too low — it is also continuously decreasing in value. As inflation increases, the actual value of $7.25 decreases. Every day the purchasing power of the most vulnerable Americans is further weakened. Sen. Elizabeth Warren (D–Mass.) brought attention to the significant impact of inflation on the Senate floor earlier this year by noting that if the minimum wage of 1960 were adjusted for inflation, it would be $22 today.

A higher minimum wage would not only benefit low-income workers, but also the economy as a whole. While some have suggested that a higher minimum wage would create a surplus of workers and increase unemployment, studies have generally concluded that wage requirements do little to disrupt the job market. In fact, a study by David Card, an economist at the University of California, Berkeley, indicates that a higher minimum wage may actually increase employment. Additionally, because low-wage workers tend to spend a higher percentage of their income, raising their income would give the economy a much-needed boost.

Democratic politicians have offered several proposals to increase the minimum wage. Michigan gubernatorial candidate Mark Schauer, a former U.S. Representative, wants to tackle the issue of income inequality head on and, if elected, he will fight to increase the minimum wage to $9.25 in Michigan. However, Republican Gov. Rick Snyder is opposed to raising the minimum wage and does not believe addressing it and raising the standard of living for thousands of Michiganders is a “burning issue.”

In his State of the Union address, Obama once again called on Congress to raise the minimum wage, but he is not waiting for Republicans in Congress to act. The president has vowed to do whatever possible to address this crisis, which is why he is taking executive action to begin to address this issue. In Michigan and Washington, Democrats are ready to get to work and address our low minimum wage.

Aside from the social and economic benefits, there is one irrefutable reason to increase the minimum wage: it’s the right thing to do. Obama declared “that in the wealthiest nation on Earth, no one who works full time should have to live in poverty.” With that in mind, one thing has become clear: the time to raise the minimum wage has come.

This article was written by members of the University's chapter of College Democrats.