By Jeanne Sahadi
CNN, Dec 6, 2023
At the start of the new year, anyone working a minimum wage job will be paid more in 22 states ...
The push for non-poverty wages
The federal minimum wage has been stuck at $7.25 since 2009. And 20 states – including Pennsylvania, New Hampshire, Alabama and Mississippi – still adhere to it. The push to raise it has gone on for years because minimum wage workers stuck at $7.25 have lost substantial buying power.
Had it just been adjusted for inflation since 2009, it would be $10.33 today. But advocates for a higher minimum wage, including Holly Sklar, CEO of Business for a Fair Minimum Wage, would rather see it adjusted for inflation from where it was in 1968. The wage then was $1.60, which in today’s dollars would be $14.39. That $1.60 provided minimum wage workers with their greatest purchasing power, Sklar said. “Every minimum wage increase since 1968 has been too little too late. … Full-time jobs used to keep people out of poverty.”
She points to MIT’s living wage calculator to assess what a single person without kids would have to earn per hour just to cover the cost of basic needs (e.g., food, housing, transportation and medical care).
For example, in Mississippi, where the minimum wage is just $7.25, a person would have to earn $15.30 an hour in Pike County just to pay for basic needs. But among childcare workers, fast food cooks and cashiers in the state, the median wage (meaning half of people in those jobs earn less) ranges between $9.83 and $10.17 an hour, Sklar noted.
Given how little movement there has been at the federal level to raise the country’s minimum wage sufficiently, she expects states and local jurisdictions will continue to do the heavy lifting.
And she believes the economic case for their increases is there for both workers and employers.
For workers, of course, “It eases the burden,” Sklar said. “People replace tires they couldn’t replace or get their kids clothes.”
For businesses, she said, consumer spending goes up because minimum wage workers will spend their additional earnings quickly. And among other things, it will help boost retention of one’s workers because they won’t be as quick to quit for another 25 cents an hour. Less turnover, in turn, can reduce an employer’s hiring and training costs, among other benefits.
“It’s a virtuous cycle,” Sklar said.
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