Minimum Wage Anniversary
by Holly Sklar
June 26, 2003
When President Franklin Roosevelt signed the Fair Labor Standards Act on June 25, 1938, during the Great Depression, he wanted to assure workers "a fair day's pay for a fair day's work." On the 65th anniversary of the federal minimum wage, Roosevelt's new deal has become a raw deal.
Roosevelt knew that to stimulate the economy, you boost workers and their families, you don't pile on tax cuts for millionaires and billionaires.
For decades, the minimum wage and worker productivity rose together. Between 1947 and 1973, worker productivity rose 108 percent while the minimum wage rose 101 percent, adjusting for inflation.
Since then, workers have put in their fair day's work without getting their fair day's pay. Between 1973 and 2000, worker productivity rose 52 percent, but the minimum wage fell 17 percent and hourly average wages fell 10 percent, adjusting for inflation. Between 2000 and 2002, productivity rose 6 percent; the real minimum wage fell 4 percent.
The current minimum wage of $5.15 an hour is lower than the real minimum wage of 1950 ($5.71). Today's 53-year-old workers were born in 1950; Truman was president, the Korean War began on June 25, there were no transistor radios, and pocket calculators were two decades away.
Since Congress last raised the minimum wage in 1997 to $5.15, it has raised congressional pay from $133,600 to $154,700, an increase of $21,100--nearly the pay of two minimum wage workers.
If your image of the typical minimum wage worker is a teenager, think again. Think of adult women working at checkout counters and in childcare, of healthcare aides taking care of your parents or grandparents--without employer health benefits, paid sick days or paid vacation.
A $5.15 minimum wage--$10,712 a year--just doesn't add up. A single parent with one child needs to work more than two full-time minimum wage jobs to make ends meet. It takes more than three jobs at minimum wage to support a family of four. Maybe the Bush administration's marriage promotion programs will push polygamy.
See if you can make ends meet on minimum wage with a new interactive wage and household budget calculator on the web at www.raisethefloor.org. Or will you be choosing between food and rent, healthcare and childcare?
It would take $8.45 to match the minimum wage peak of 1968 in $2003. Since 1968, worker productivity has risen more than 80 percent while the minimum wage has dropped nearly 40 percent, adjusting for inflation.
When the minimum wage is stuck in quicksand, it drags down wages for average workers as well. About one out of four workers makes $8.70 an hour or less. That's not much more than 1968's real minimum wage.
When workers don't get a fair day's pay they are not just underpaid--they are subsidizing employers, stockholders and consumers.
Plenty of employers know how to make a profit without ripping off their employees. In-N-Out Burger ranks first among fast food chains in quality, value and service. Chef Julia Child ate In-N-Out burgers while recuperating from knee surgery, the Associated Press reported. When the company opened a new restaurant in Oxnard, CA, in 2002 there were 900 applicants for 70 jobs. The starting wage is $8.25 an hour, with paid vacations, food at work, and the option of participating in a 401(k) with a company match.
Conservatives like to quote Adam Smith about the market. Smith wrote in "The Wealth of Nations" in 1776, "It is but equity...that those who feed, clothe and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed and lodged."
In advocating minimum wage, Roosevelt said that goods produced "under conditions that do not meet a rudimentary standard of decency should be regarded as contraband."
We don't let businesses claim they can't afford to make hamburger without E-coli as a justification to keep serving up disease.
We don't tell businesses to keep dumping toxic waste in the river if they claim they can't afford proper disposal.
Poverty wages are toxic to our families, communities, economy and democracy. It's time to end them.
Holly Sklar is coauthor of Raise the Floor: Wages and Policies That Work for All Of Us (www.raisethefloor.org). She can be reached at firstname.lastname@example.org. Distributed by Knight Ridder/Tribune News Service, June 24, 2003. © Copyright 2003 Holly Sklar