The Center for American Progress released a report last week that threatens a right-wing talking point against raising the minimum wage. Namely, raising the minimum wage would increase unemployment and increase federal spending on programs like SNAP, formerly known as food stamps.
The short version of this diary is this, from the authors of the report: "Raising the Minimum Wage to $10.10 Would Cut Taxpayer Costs in Every State"
I have been mulling over a wonderful article, "My Life as a Retail Worker: Nasty, Brutish, and Poor" in The Atlantic by Joseph Williams that came across my Facebook feed yesterday.
Who Earns Minimum Wage Anyway?
As many Kossacks know firsthand, retail and hospitality are hard jobs that pay very little and can be the only ones available despite a college degree or two on the wall. The myth that these jobs are filled by teenagers working for petty cash has been a hard one to kill.
Somewhere around 50% of minimum wage workers are in their late twenties or older.
Currently, the federal minimum wage stands at $7.25 an hour. Of course, some states have a higher minimum wage and, surprisingly(?) 5 states have established a minimum wage lower than the federal rate.
The industry with the highest proportion of workers with hourly wages at or below the federal minimum wage was leisure and hospitality (about 19 percent). About half of all workers paid at or below the federal minimum wage were employed in this industry, the vast majority in restaurants and other food services.Retail comes in a close second. Between the two industries, over 2 million workers earn at or below minimum wage. This translates to nearly 63% of all workers earning at this level.
What Does $7.25 Get You These Days?
The short answer is, less and less.
(Hint: the real value of the minimum wage today is less than 2/3 what it was in 1968)
You can catch a nifty little video tracking the minimum wage in 2014 dollars here
Check Media Matters for a handy sheet on myths vs facts regarding the minimum wage
There is also this from Brookings
Yes Virginia, Inflation Does Exist
Yeah, sorry. I couldn't resist bringing this one up again ...
I know this is old, but the talking point still exists. The right wing is sticking to the Econ 101 that they remember, perhaps poorly, from somewhere in their (mis)education, the basic Reaganomics tenet that deregulation is king and that the minimum wage gets in the way of letting the economy grow.
But, How Does An Increase In The Minimum Wage Cut Spending Overall?
I'm no economist. In fact, I aspire to armchair status. But I understand it this way. An increase in the minimum wage means that fewer people need programs like SNAP. The authors of the report mentioned above the fold suggest that these savings outweigh anything that might be spent on higher unemployment benefits.