Some Business Owners Want to Increase the Federal Minimum Wage
U.S. – Business owners across the nation are coming together in support of increasing the federal minimum wage in the U.S.
July 24 will mark eight years since the federal minimum wage was last increased, according to the Business for a Fair Minimum Wage. Since 2009, the federal minimum wage has remained at $7.25, which is worth less than it was in 1950, adjusted for the cost of living.
Business owners and executives across the country are speaking out in support of raising the minimum wage to strengthen businesses and boost consumer buying power.
Since it was raised in 2009, the federal minimum wage has lost 12 percent of its buying power, according to the Bureau of Labor Statistics Inflation Calculator. In other words, the minimum wage has lost more than one-third of the buying power it had in 1968, when the minimum wage was at its peak value.
“The current federal minimum wage just doesn’t add up for workers or businesses,” said Holly Sklar, CEO of Business for a Fair Minimum Wage. “Workers are also customers. When the minimum wage is too little to live on, it undermines the consumer demand that powers our economy. Instead of paying decent wages, low-wage businesses end up paying the costs of low staff morale and high turnover – from increased hiring and training costs to lower productivity and customer satisfaction. While action in the states is vital where possible, we need federal action to ensure an adequate minimum wage no matter where people work and do business.”
While 29 states now have minimum wages above $7.25 an hour, 21 states have exactly $7.25 as their minimum wage. Texas is among the 21 states with minimum wage right at $7.25. In a broader sense, a minimum wage of $7.25 an hour amounts to just $15,080/year for full-time workers.
The Business for Minimum Wage notes that within the 29 states with minimum wage over $7.25, only 13 pay anywhere up to $9 and only 7 states pay $10 or higher.
“The value of the minimum wage is so eroded that it buys less today than it did when I needed it to survive in the 1960s. Raising the minimum wage makes great economic sense – boosting sales and improving employee retention, morale and customer service,” Roger Smith, President and CEO, American Income Life, headquartered in Waco, TX said. “[However] it’s much more than that. Raising the minimum wage is a crucial step to restoring the shattered American Dream.”
No statewide minimum wage has yet to reach $11.29, which is the value of the 1968 minimum wage in today’s dollars.
On the other hand, a government mandated minimum wage may not be the best way to develop and maintain a strong labor force. The American Enterprise Institute argues that in order to maximize opportunity for unskilled workers, wages based on the free market increase those opportunities. “Simply put, we would rather see unskilled workers employed at a market wage – even if that wage is only $5, $6 an hour – that allows them to gain valuable work experience and on-the-job training, than to be unemployed at $0.00 an hour,” an AEI report states. “And unfortunately, a $15 minimum wage maximizes the probability that an unskilled worker will be unemployed at $0.00 an hour instead of being gainfully employed.”
For specific state rates, visit the Economic Policy Institute Minimum Wage Tracker.