Should The Minimum Wage Be Raised?

By Patricia Smith
New York Times Upfront, Feb 20 2012
Excerpt: Holly Sklar of Let Justice Roll, a group working to raise the minimum wage, says that the decline in the value of those paychecks keeps the rest of the economy from flourishing.

"You can't really have a predominantly middle class country when you have so many people earning poverty wages," Sklar says. "It's really a drag on the overall economy."

Longer Excerpt:

Summer Dupin, 18, who works 14 hours a week at a local restaurant, was thrilled when Florida's minimum wage increased last month by 36 cents, to $7.67 an hour.
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Even though the federal minimum wage hasn't changed from $7.25 an hour since July 2009, Florida is one of eight states--along with Arizona, Colorado, Montana, Ohio, Oregon, Vermont, and Washington--that last month raised their own already-higher minimums by 28 to 37 cents an hour. That may not sound like much, but it's an extra $582 to $770 a year for a full-time minimum wage worker.
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Eighteen states and the District of Columbia have higher minimum wages than the federal baseline (see map). But economists disagree about whether raising the minimum wage actually helps workers and the economy or hurts them.

Some economists say increases in the minimum wage can stimulate the economy, which could still use a boost as it struggles to recover from the Great Recession that began in 2007.

"Minimum wage workers are much more likely to immediately go out and spend that extra money in the economy," says Heidi Shierholz of the Economic Policy Institute, which favors raising the minimum. "That's because they're often living paycheck to paycheck."
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The first federal minimum wage--25 cents an hour--was passed in 1938 in the midst of the Great Depression. It was part of the New Deal's Fair Labor Standards Act, which also established overtime pay and banned child labor. President Franklin D. Roosevelt said that other than Social Security, the law was "the most far-sighted program for the benefit of workers ever adopted."

One of President Obama's 2008 campaign promises was to gradually raise the federal minimum wage to $9.50 an hour, and then adjust it annually for inflation. But the White House never pushed for it, and Congress never took it up.

Advocates of a higher federal minimum point out that increases haven't kept up with inflation, so today's minimum actually buys much less than it used to--25 percent less, in fact, than its adjusted-for-inflation peak in 1968.

Holly Sklar of Let Justice Roll, a group working to raise the minimum wage, says that the decline in the value of those paychecks keeps the rest of the economy from flourishing.

"You can't really have a predominantly middle class country when you have so many people earning poverty wages," Sklar says. "It's really a drag on the overall economy."
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