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Tue November 19, 2013
Raising the minimum wage is the least we can do
How would you like to work 40 hours a week, every week of the year, for an annual income of $19,240 dollars? I didn’t think so.
The good news, if you could call it that, is that Mark Schauer, the Democratic candidate for governor next year, wants to raise the minimum wage to that level. Which would be, precisely $9.25 an hour. The bad news is that our current minimum is a lot worse at $7.40 an hour.
Someone working for it full-time makes only a little over $15,000. And the worst news is there is little chance of the minimum being raised to the level the candidate wants.
Yesterday, Schauer, a former congressman, held a press conference in Detroit to announce his minimum wage proposal. He said “It’s overdue. It’s good for workers. It’s good for small business. And it’s good for Michigan’s economy.”
Some things are still predictable in today’s world. The Michigan Chamber of Commerce instantly denounced Schauer’s proposal. The business group said it “would make Michigan uncompetitive in the race for jobs.” That might be true, if we were in a national competition for jobs that paid starvation wages.
But state and national chambers of commerce have reflexively denounced any attempt to raise the minimum wage, at least as far back as 1938. That’s when that evil socialist, Franklin D. Roosevelt, finally got a minimum of 25 cents an hour.
Even if Schauer’s proposal were to be enacted, it wouldn’t all take effect immediately. He proposes phasing it in over a three-year period. Actually, the most significant part of his proposal is to tie the minimum wage to the inflation rate after the third year.
Michigan’s current minimum wage was adopted seven years ago. Since then, it has lost something because of inflation. In fact, when you look at historic minimum wage levels and adjust them for inflation, the highest national minimum wage ever was in 1968. In inflation-adjusted dollars, it then was nearly $11 an hour. But politically, the working class has lost clout since then.
Just as predictably as the chamber’s rejection of Schauer’s proposal was union support for it. “The Michigan AFL-CIO applauds any effort to raise the wages and living standards of working families,” said union president Karla Swift. “No one who works full time in our great state should live in poverty,“ she added.
However, the sad truth is that Schauer’s proposal wouldn’t lift many people out of poverty. Even fully phased in, a family of three living on one full-time minimum wage job would still be below the poverty level. Still, it would be better than we have now.
Nearly three years ago, Governor Rick Snyder gave Michigan businesses a huge tax cut, saying this was bound to create jobs. That hasn’t happened.
Economists will tell you that putting money in the hands of the poorest Americans stimulates the economy, since they tend to spend it immediately, creating a multiplier effect.
It would seem to me that we ought to increase the minimum as a matter of good policy and simple economic justice. But given today’s politics, I wouldn’t hold my breath.
Jack Lessenberry is Michigan Radio’s political analyst. Views expressed in the essays by Lessenberry are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.