The United States has set a record for maintaining its federal minimum wage without increases for the longest time in the nation’s history. The news calls for immediate action aligned with the economic expansion in the US and increasing inflation rates.
The last increase to the US federal minimum wage was July 2009 — which is almost a decade ago. The federal minimum wage was raised from $6.55 an hour to the current $7.25 an hour.
According to CNN calculations, the current $7.25 an hour minimum wage can barely cover basic expenses with prices for healthcare, oil, and commodities gone up within the past decade. CBS reported that $7.25 in 2009 is valued at only about $6 in 2019. The cost of living has soared 18% since the last increase.
In an estimate, minimum-wage employees working 40 hours a week for 52 weeks, equates to just $15,080 annually. Researchers estimate with the current market that two working parents in a family of four would need to earn $67,146 to cover expenses. That equates to $16.14 an hour for each parent, CNN reported.
The New York Times, meanwhile, reported that the average wage being paid to all minimum wage workers can go as low as $12 an hour, according to an economist who served in the Treasury Department under President Barack Obama.
“There is not a single community in the U.S. where someone can have a decent quality of life at the current federal minimum wage,” said David Cooper, an EPI researcher on the minimum wage. “Congress has never waited this long to lift up the wages of workers at the bottom.”
In line with the report, states have passed bills that raise state minimum wages higher than the federal baseline. As of June this year, 21 states have passed minimum wage hikes—some even at the $15 an hour threshold.
However, the state minimum wage varies. In Florida, the minimum wage stands at $8.46 an hour; in Hawaii, it’s $10.10 an hour; in California, the minimum wage goes up to $12 an hour. Meanwhile, in states like New York and Seattle, the minimum wage reaches $15 an hour and even $16 an hour, respectively.
On the other hand, Republican-led states are known to reject Democrat appeals for minimum wage hikes. An estimate of around 700,000 minimum-wage workers in areas that have not passed local increases are still paid $7.25 an hour, the New York Times said.
Republican-led states like Arkansas, Arizona, and Missouri are some exceptions due to public support via ballot initiatives. In the polls, over 60% in each state voted in favor of minimum wage hikes.
However, in order to gain public support from ballot initiatives state leaders first need to put it in motion. With Republicans abstaining such initiatives, the citizens have resulted to demand higher minimum wages from the federal government directly.
In other efforts, big companies like Amazon and Walmart have raised their minimum wage to $15 and $14.26 an hour, respectively. The move has prompted government states to follow suit.
Additionally, it’s not just large companies that are on board with a wage hike. There are around 800 companies, most of which are small businesses, who are willing to support the raising minimum wage to $15 by 2024.
The record delay also comes after the US experiencing significant economic growth. The US has enjoyed roughly 10 years of economic expansion, which may soon become the longest such expansion in this country’s history, according to USA Today.
Analysts have also shared that raising the minimum wage would improve employee recruitment and retention in a tight labor market—higher wages would easily attract employment-seeking individuals. Moreover, higher pay also means more spending money salary-makers, which boosts the local economy.
Comparatively, May’s employment report showed that there were only 75,000 jobs provided in the month — a disappointing number compared to expectations of 185,000. Furthermore, employment rates are evidence of cracks forming in the economy.
In 2012, Texas had 452,000 workers making the minimum wage or less, according to federal data. By 2017, that number had fallen to 196,000, despite a slight increase in hourly workers, Dallas News reports.
“The minimum wage is still relevant; it just needs to be raised to a level where more workers benefit,” said Tsedeye Gebreselassie, work quality director at the National Employment Law Project.
Adding a dollar or two to the minimum scoops up a lot of people and spills over to other workers. “But at $15 an hour, you’re starting to affect a significant portion of the workforce,” Gebreselassie said.