Federal Minimum Wage Doesn’t Go Far Enough for Workers

by Joye Barksdale  |  March 05, 2013

What can you buy for $7.25? Let’s see…

Seven items from your local dollar store, not including sales tax.

An Angry Whopper with a side order of French fries.

Two packages of F.M. Brown’s Extreme Select Seeds for your hamster.

Not bad, perhaps, if you like bargains, fast food and small, furry pets. But if $7.25 – the federal minimum wage – is your hourly pay, what you can’t buy is a decent living.

Sen. Tom Harkin (IA) and Rep. George Miller (CA) want to raise the federal minimum wage. They plan to introduce a bill that would raise it to $10.10 an hour and provide for automatic future increases based on the cost of living.

“It is more apparent than ever that working families struggling to make ends meet on today’s minimum wage…need and deserve a raise,” they said in a jointly issued statement. “By acting now to raise the minimum wage we will lift families out of poverty while simultaneously giving a significant boost to our economy. An increase in the minimum wage is long overdue.”

President Obama in his State of the Union address called for raising the federal minimum wage for the first time since a legislated increase five years ago, from $7.25 to $9 an hour. Ultra-conservatives immediately criticized his proposal and argued that it would lead to higher unemployment. But many economists dismissed their concerns, believing that raising the wage would stimulate the economy because the lowest-paid workers would have more money to spend on products and services.

Aside from stimulating the economy, a higher minimum wage would help address growing inequality, particularly for women because they constitute a majority of the workers who would benefit, according to the Economic Policy Institute (EPI).

The federal minimum wage was last raised five years ago. Since then, several states have adopted higher minimum wages. (The highest minimum wage in the nation is Washington State’s, which is set at $9.19 an hour.) But in nearly half the states, the minimum wage is the same as the federal wage.  

“If we want the fruits of economic growth to benefit the vast majority, we will have to adopt a different set of guideposts for setting economic policy, as the ones in place over the last several decades have served those with the most income, wealth and political power,” wrote Lawrence Mishel, president of the EPI. “Establishing a higher minimum wage is an important piece of what is needed.”