Adjusted for inflation, the minimum wage has never again reached the heights it did in 1968. courtesy Statista

A $15 minimum wage is necessary to respond to COVID

As he begins his presidential tenure, Joe Biden’s main focus is helping Americans through the ongoing COVID-19 crisis. One of the ways Biden has begun this process is by increasing the minimum hourly wage for federal contractors to $15. Biden has also expressed support for increasing the national minimum wage to this amount for all workers. This increase has been sorely needed for many years, and the pandemic is only the latest reason for the urgency of this proposal.

The current minimum wage in the U.S. is $7.25 per hour. It has remained at this number since 2009. Adjusting for inflation, this represents a gradual decrease in the value of the minimum wage since the 1960s. This also doesn’t take into account the rising productivity of labor. If the minimum wage mirrored inflation and rising productivity since 1968, it would be well over $20.

Currently, the Department of Health and Human Services places the poverty line at earning under $12.60 per hour. As President Biden himself said, “no one […] should work 40 hours aweek making below the poverty line.” Raising the minimum wage to $15 would ensure anyone who puts in the nationally accepted amount of weekly work would receive the wages they need to live a decent life.

The fact is, when workers are earning wages under the poverty line, they will turn to the government for help. National welfare spending like Medicaid is essentially subsidizing the wages of employees at McDonald’s, who could never afford health insurance on their pitiful wages. The ultra-rich multinational corporations can afford to compensate their workers fairly and adequately without the support of these welfare programs.

The most common argument against raising the minimum wage involves the economic consequences it could bring. People warn of increases in the cost of goods and the loss of jobs. As far as goods increasing goes, nations like Denmark have an average minimum wage of around $20 — minimum wages are negotiated through unions so it differs by industry — and products there are only slightly more expensive than the same products in America.

As for the loss of jobs, many top economists don’t seem worried, with over half supporting an increase. Minimum wage increases in the past have shown minimal if any impact on employment levels. The only possibly vulnerable sector is small businesses, particularly in low-income areas. However, it is hard to justify a business existing if it doesn’t have the capability to pay its workers enough to survive. If it was really necessary, perhaps the government could supplement the wages of these workers.

During the pandemic, billionaires have added hundreds of billions of dollars to their fortunes while average Americans have faced financial destitution. This kind of inequality is what keeps workers bonded to their low-paying jobs. If one worker quits in frustration, there are always plenty of others ready to take their $7.25 an hour. Larger companies also often use wages a bit above the minimum wage as a hiring tool while fervently fighting unionization. Raising the minimum wage not only delivers immediate help to desperate Americans in this crisis, it represents a vital step in advancing the power of working people.

Despite being the richest country in the world,
America’s minimum wage is well below many other
nations’. courtesy Wikimedia Commons tucollegian | Collegian

Post Author: Justin Klopfer