Common Good Network
7/20/07

This week The Common Good Network interviewed Holly Sklar, author of Raise the Floor and A Just Minimum Wage: Good for Workers, Business and Our Future. Holly is a consultant with the Let Justice Roll Living Wage Campaign, of which Protestants for the Common Good is an active member. PCG Deputy Director Rev. Jennifer Kottler serves on the Executive Committee of the Steering Committee of this campaign.

CGN: It seems like the increase in the minimum wage is big news. Why is that?

Holly Sklar: The federal minimum wage is going up on July 24 for the first time in ten years—the longest period without a raise since the minimum wage was enacted in 1938.

CGN: What does the new minimum wage look like? Does it go to $7.25 immediately?

HS: The minimum wage is scheduled to rise in three steps: from $5.15 to $5.85 on July 24, 2007; from $5.85 to $6.55 on July 24, 2008; and from $6.55 to $7.25 on July 24, 2009.

CGN: There has been a lot of talk from the business community that they can’t afford this new wage. How do your respond to them?

HS: Businesses can make a profit without keeping their workers in poverty. Stuck at $5.15 an hour—just $10,712 a year—since Sept. 1997, the minimum wage was simply not enough for workers to afford basic necessities for themselves and their families. The minimum wage has been so inadequate that a growing number of workers have turned to food banks and homeless shelters, which can't keep up with the rising demand.

An increased minimum wage will boost local economies. Businesses and communities will benefit as low-wage workers spend their much-needed pay raises at businesses in the neighborhoods where they live and work.

A raise for those at the bottom won't hurt the bottom line. Raising the minimum wage is good for business.

CGN: How exactly is raising the minimum wage good for a company’s bottom line?

HS: Higher wages benefit business by increasing consumer purchasing power, reducing costly employee turnover, raising productivity, and improving product quality, customer satisfaction and company reputation. In a National Consumers League survey, for example, 76 percent of American consumers said "how well a company treats/pays employees influences what they buy."

CGN: How have higher minimum wages in states like Illinois had an effect on the business climate in the state?

HS: States that have raised their minimum wages above the $5.15 federal level have had better employment and small business trends than the other states. Studies by the Fiscal Policy Institute and others show that in states with minimum wages above $5.15, the number of small businesses and the number of small business employees grew more than the other states—contrary to what critics predicted. Likewise, after the last federal minimum wage increases in 1996 and 1997, the nation experienced lower unemployment, low inflation, robust growth and declining poverty rates.

CGN: Clearly the ballot initiatives in 2006 showed this is an important issue to most Americans—but is that just the rank-and-file folks or does it include business owners?

HS: Raising the minimum wage is supported by large majorities of Americans, including business owners. Two out of three small business owners supported an increase in the minimum wage in a nationwide survey conducted by Small Business Majority in 2006.

An inadequate minimum wage doesn't just shortchange workers. It undermines the long-term health of businesses, communities, our economy and our nation.

CGN: So are you, and the folks you work with in the Let Justice Roll Living Wage Campaign, satisfied with this increase?

HS: We think it’s a good start, but just that—a good start. The federal minimum wage has been so eroded over time that when it goes up on July 24 it will still be low compared to earlier decades. When the minimum wage went to $5.15 in 1997 it was worth $6.67 in today's dollars.

Even with the new raise, minimum wage workers will have less buying power than minimum wage workers had half a century ago. The 1950 minimum wage was $6.47, adjusting for inflation. Even after rising to $7.25 in 2009, the minimum wage will still be lower than it was in 1956, when it was $7.65 in today's dollars. It will be much lower than it was in 1968, when the minimum wage peaked in value at $9.56 in today's dollars.

CGN: Do you have any final points you would like to leave our readers with?

HS: We cannot build a strong 21st century economy on a 1950s' wage floor. We cannot build a strong 21st century economy when more and more hardworking Americans struggle to make ends meet.

A fair minimum wage shows we value both work and responsible businesses. A fair minimum wage is a sound investment in the future of our businesses, communities and our nation.

CGN: Thank you for your time and your work on this issue.

http://thecommongood.org/showfile.asp?file=6_15/interview.html