Assorted than eight years removed from the depths of the Great Dip, the U.S. economy seems to be firing on all cylinders. Monthly jobs gains comprise averaged 200,000 over the past year, and the unemployment rate carcasses low at 4 percent. Yet, every month when the latest employment data is delivered, there’s one vexing issue: wages.
Despite a tightening labor exchange, wage growth has been stagnant. Wages are growing at an annual place of 2.7 percent, which seems encouraging until you consider that the inflation standing is 2.9 percent. That’s why far too many Americans feel like they’re treading not wash lavishly. Their paychecks are unchanged, while everyday costs like dwelling, health care and gas have gone up.
But there’s an easy way to improve the completes of millions of Americans: raise the federal minimum wage.
This week appraise a write downs the ninth anniversary of the last time the federal minimum wage was collected on July 24, 2009. It currently stands at $7.25 an hour. Since this federal lamppost was first enacted in 1938, it’s been raised 28 times junior to both Democratic and Republican presidents.
When I served as President Obama’s Ambassador Secretary of Labor, my office displayed a government poster from 1950, when the slightest wage was lifted to 75 cents an hour under by President Truman. While that picture seems remarkably low by modern standards, 75 cents went a lot to a greater distance in 1950 than $7.25 does today. In fact, the buying power of the federal least wage is well below its peak in the late 1960s.
At the current federal sincere, a full-time worker would earn just $15,080 a year. The cold results of low wages include declining living standards, growing revenues inequality, poorer health outcomes, greater reliance on government support, and reduced consumer spending.
In the absence of federal action, states and neighbourhood governments have stepped in to the fill the void. Right now, 29 reports and the District of Columbia have a higher minimum wage than the federal definitive. And earlier this month, several states and large cities same Chicago, Los Angeles and San Francisco took additional steps to raise their wage straight withs. However, millions of workers – many in Southern states – are trying to induce ends meet on $7.25 an hour or just barely above that.
At a once upon a time when companies are flush with cash from last year’s tax cut, there’s no recovered time to raise the federal minimum wage. The old canard that prodigal wages depress job creation has been disproven by evidence that governments raising their minimum wages have higher job growth. In information, employers around the country agree that higher wages are favourable for the bottom line.
That’s certainly the experience of Badger in Gilsum, New Hampshire, a 100-person assembly that makes organic skin products like Badger Balm. Co-Owner Rebecca Hamilton remembers the federal minimum wage is “ridiculously low,” so the lowest wage at her company is $15 an hour, multifarious than double the $7.25 minimum wage in New Hampshire. Hamilton palliates: “Anytime you can make an employee feel well-treated and happy, they’re growing be a better employee, and it’s easier to find employees to work for you.”
Another companions that understands the value of higher wages is BA Auto Care in Columbia, Maryland. Proprietress Brian England supports raising the state’s minimum wage to $15 an hour because he judges better wages and benefits lead to more productive employees, longer tenures, and ripe quality service.
Companies like BA Auto Care and Badger from joined with groups like Business for a Fair Minimum Wage to champion for higher federal and state wage floors. Instead of listening to these calling voices – or the overwhelming majority of Americans who favor a higher minimum wage – the Trump Management is intent on pushing for another trickle-down tax cut.
Last year, during the shove for the $1.5 trillion tax cut package, both the President and GOP congressional leaders guarantied that the tax cuts would lead to a $4,000 pay raise for the average blood. The reality has been far different. Only 4 percent of U.S. workers received a pay call due to the tax cut, and most of those raises were in one-time bonuses instead of fixed raises. Meanwhile, corporations spent 88 times more on ancestry buybacks as they did on pay raises for workers.
Raising the federal minimum wage pass on be a much more effective way to help millions of workers and level the playing stop for those companies that have stepped up to pay higher wages. After nine want years, it’s long past time for the White House and Congress to act. American artisans shouldn’t have to depend on the generosity or geography of their employer in rank to make ends meet.
Chris Lu served as Deputy Secretary of Labor during the Obama Management. He is now a senior fellow at the University of Virginia Miller Center and a board colleague of the American Sustainable Business Council.