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Thursday, Sept. 27, 2012 09:06 am

Our disgraceful minimum wage

Elites in Washington, on Wall Street and in the corporate suites have taken exquisite care of themselves. They’ve increased their take by offshoring our middle-class jobs, slashing American wages and benefits, busting the ability of unions to fight back, deregulating their nefarious corporate and financial operations, dodging their tax obligations, privatizing and gutting public services (from schools to food stamps), and turning our elections into auctions run by and for billionaires, thus robbing America itself of its unifying ethos: economic fairness and social justice.

One of the least excusable of today’s injustices is that in this country of unsurpassed wealth, it’s an abomination that the power elites are casually tolerating poverty pay as our wage floor. How deplorable that they can actually juxtapose the words “working” and “poor” without blinking, much less blushing.

Nearly 4 million Americans are being paid at or below the desiccated federal minimum wage of $7.25 an hour. For a single mother with two kids, that’s $4,000 a year beneath the poverty level. Where are the ethics in a “work ethic” that rewards so many with paychecks that deliberately hold them in poverty?

Consider the kind of life $7.25 buys. At that rate, a full-time worker is taking in only $1,250 a month, before payroll taxes. Try stretching that over the basics of rent, utilities, groceries and gas. Need car repair? What if you get sick? Good luck.

Corporate politicos and front groups have draped a thick tapestry of myths and excuses over the miserly wage.

“The only people paid the minimum,” goes one of their oldest dodges, “are teenagers working part-time summer jobs for extra cash.” In fact, only 6.4 percent of these low-wage employees are teen part-timers. Contrary to the stereotype, the typical minimum-wage worker is an adult, white woman (including many single moms) whose family relies on her paycheck.
The right-wingosphere argues that lifting the wage floor would keep employers from hiring. Not true. The reason corporations aren’t hiring is that consumers aren’t purchasing their products, thanks to the economic realities of lost jobs, wage cuts and inflation that have shrunk the buying power of working families.

The one simple step that would immediately add juice to the consumer economy is to do the one thing that boneheaded lawmakers adamantly refuse even to consider: Raise the spending power of millions of low-wage workers by hiking the legal minimum wage. Raising it to $10 an hour would elevate 30 million hardworking Americans now paid a poverty or near-poverty level income. While it would still be tough to raise a family on a $10-an-hour wage ($20,800 a year), it does move our country a lot closer to the principle that work ought to be fairly rewarded, restoring a measure of ethics to the work ethic.

Such a percolate-up solution would provide a huge and direct lift out of our present doldrums – a study last year by Chicago’s Federal Reserve Bank found that every dollar increase in the minimum wage produces an immediate bump in the next year of $2,800 per recipient in consumer purchases of everything from kids’ shoes to vehicles. The Economic Policy Institute (EPI) reported in a 2009 study that even a boost to $9.50 an hour would result in $30 billion a year in new consumer spending.

Numerous in-depth studies show that hiking the wage does not cause either small businesses or giants like McDonald’s to rush out and slash their workforce in order to offset the relatively small cost of paying employees a bit better.

The super-rich are fast separating their good fortunes from the well-being of the many. They’re destroying the place where egalitarianism, upward mobility and the middle class once had a welcoming home.

Jim Hightower is a national radio commentator, columnist and author.  
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