Raise the wage: A higher minimum would pump up the economy

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Increasing the minimum wage would create buying power and boost the nation’s economy.

The bins set up last month by employees of a Walmart store in Canton, Ohio, to collect holiday food for needy fellow workers symbolize to some Americans the nation’s growing economic inequality. A modest, reasonable increase in the federal minimum wage would help ease such disparities.

Walmart says the food bins show how the company’s 1.3 million U.S. employees rally around each other in hard times. But many of the nation’s large retailers and other big employers have effectively undone what Henry Ford started a century ago, when he doubled his workers’ wages and helped create a broad middle class that could afford to buy his cars.

The business model of part-time, low-wage, few-benefits jobs has helped to transform the American economy, shrink the middle class and increase the number of working poor to more than 10 million employees during the Great Recession.

President Barack Obama has said he wants to spend much of the rest of his term working to reduce the gap between rich and poor Americans. He cited his support for a bill before the Democratic-majority Senate that would increase the $7.25-an-hour minimum wage to $10.10 over two years, then index that wage to inflation.

Senate Democrats would like to hold a vote on the measure before Christmas. Chances for a hike in the minimum are slim in the GOP-controlled House this year, but might improve in 2014, when all seats there are up for election.

Momentum is building for a higher minimum wage. In various cities including Pittsburgh, fast-food workers have protested against their low wages. Their demand for a $15 hourly wage, however, is unrealistic for the near future. But a Gallup poll conducted last month suggests that three out of four Americans support an immediate increase in the minimum wage to $9.

Some economists argue that raising the minimum wage would discourage employers from hiring entry-level workers, including young people seeking their first jobs. But a large number of workers now must support families on minimum-wage jobs. A full-time worker at the federal minimum wage earns $14,500 a year. If that worker is a single parent, his or her household income falls below the federal poverty level of $15,130 for a family of two.

Congress needs to help the lowest-paid Americans, and the economy as a whole, by raising the minimum wage.


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