American Forum Op-Ed: Steve Fernlund, Minimum Wage Was Higher When Electricity Was Penny Cheap

By Steve Fernlund
Distributed by the American Forum, 7/20/07
Known placements to date include Eastern Group Publications, Prince George's Sentinel (MD), LA Watts Times, Daytona Beach News Journal, Daily Statesmen (MO), Coalfield Progress (VA), Sun Advocate (UT), Clinton News (MS), Grant County Herald (MN), Crookston Daily News (MN), Winchester Sun (KY), Beaumont Enterprise (TX).

The federal minimum wage is rising July 24 for the first time since 1997. This is the longest period between adjustments since the federal minimum wage was enacted in 1938.

We'll hear the usual outcry from hostile commentators. There will be warnings of impending economic disaster to the nation all because the minimum wage is rising from $5.15 per hour to $5.85 this summer and to $7.25 in 2009.

So how about a little context?

In 1956, the flashy cartoon spokesman for the nation's electricity generation industry, Reddy Kilowatt, reminded us regularly to consume more electricity because electricity is "penny cheap."

Gasoline sold for pennies per gallon too.

And how much was the federal minimum wage in 1956? In today’s dollars, it would have amounted to a whopping $7.65 per hour.

Of course energy costs have run amok since then. Reddy Kilowatt and his electricity consumption messages have gone the way of the dinosaur. Just four years ago, regular unleaded gasoline was selling for less than $2 per gallon. Today, it's at $3 -- more than a 50 percent increase in just four years.

Meanwhile, the minimum wage stayed stuck in a time warp.

Raising the minimum wage is the right thing to do, and not just because it's also the fair thing to do.

Studies by the Fiscal Policy Institute, a nonpartisan research and education organization, show that in states that have a minimum wage that are higher than the federal minimum wage, the number of small businesses and the number of small business employees grew more and faster than other states.

If higher minimum wages are good for small business, they're good for America. Small business is the backbone of the American economy.

Our 25 million small businesses make up 52 percent of the private sector workforce. Small businesses create 75 percent of all new jobs and anchor our communities.

Small business owners know firsthand that higher minimum wages mean more customer spending power. Higher minimum wages mean more productive workers and healthier local economies.

So it's no wonder that 62 percent of small business owners surveyed nationwide in 2006 by Small Business Majority supported an increase in the federal minimum wage.

Small business owners from across the nation have signed a statement in support of higher minimum wages at which says, "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."

So who are you going to believe? Television and radio talking heads predicting doom and gloom because of a raise in the minimum wage, or those men and women from the small businesses responsible for most of the new jobs in this country? I'll be going with my peers in the business world.

Fernlund is founder and president of Generation Three Logistics, a transportation logistics firm in Las Vegas, NV.

Copyright (C) 2007 by the American Forum

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