Higher minimum wage equals best economic stimulus package

Scheduled to bump up to $7.25 per hour this Friday, July 24, a higher federal minimum wage is the best kind of economic stimulus for working families, said workers’ rights advocates and even some business owners this past week.

Greg Denier, a spokesperson for the labor federation, said CtW welcomes the raise and favors indexing it to inflation. “There needs to be a wage floor,” he told the World. “Right now with inflation, the minimum wage continues to be inadequate” for a growing number of American working families.

According to federal government data, some 4.5 million workers in 31 states will see a pay raise after July 24. This will be the third such raise after passage of a gradual increase in the rate by the Democratic controlled Congress in 2007.

Labor and worker advocacy groups had fought against Republican opposition since 1997 to passage of a higher federal minimum wage. They scored the 2007 law a major victory, despite the failure of efforts to index the minimum wage to inflation.

According to the Economic Policy Institute, the buying power of the federal minimum wage is far lower than in past years. In 2008 dollars adjusted for inflation, the value of the 1979 federal minimum wage stood at $8.02, $1.47 per hour more than the current rate. Even with the raise on the 24th, millions of workers will have less buying power than the lowest-paid American workers did in 1979.

Rev. Steve Copley, who chairs the board of the worker advocacy group and leads the Give Arkansas a Raise Now coalition, said, 'More Americans have come to realize that too-low wages are a recipe for disaster, not just for individual families but for the economy as a whole. Our people and our economy need living wages.'

'A minimum wage increase at this time could be the most important factor in powering our economy out of the recession,' said Camille Caramor, owner of a paralegal service and Christmas tree farm in Louisiana.

Speaking on behalf of , Caramor added, 'The higher the wage an employee receives, the more income he or she has to purchase goods and services for their family, which is indeed 'the best medicine' for our economy.”

U.S. Women's Chamber of Commerce CEO Margot Dorfman also endorsed a higher minimum wage, saying, 'It is an unsustainable and dangerous downward spiral to push American workers into poverty and expect taxpayers to pick up the bill for the consequences.”

'It's a myth that a minimum wage increase kills job development,' said Lya Sorano, founder of Atlanta Women in Business. 'To get out of this recession, we need more money to circulate. That happens when people get bigger paychecks, who today can't afford to buy the goods and services they need—goods and services from some of the same people who seem to be opposed to the increase.'

Almost 1,000 business owners have signed the Business for a Fair Minimum Wage statement urging a fair minimum wage that matches the needs of workers.

Living wage advocates tied higher wages for America’s lowest-paid workers to the economic recession. 'The minimum wage was enacted during the Great Depression to put a floor under workers' wages and stimulate the economy. We need that boost today,' said author Holly Sklar, senior policy adviser for Let Justice Roll.

For the past eight-plus years, economists have argued, workers’ wages have remained stagnant. 'The long-term fall in worker buying power is one reason we are in the worst economic crisis since the Depression,” Sklar said. She favors boosting the federal minimum wage even higher. “Ten dollars in 2010 will foster a productive economy fueled by living wages rather than destructive debt and speculation.'

CtW spokesperson Greg Denier explained, “The problem in the economy today is that productivity and profitability increased while paychecks shrank. We need to expand paychecks in order to expand the purchasing power of American workers.” He also linked the fight to index the minimum wage to inflation with the push for health care reform and the passage of the Employee Free Choice Act, a law that would remove barriers to union organizing. Each is an important tool for improving the financial stability of the working class and “the means to economic recovery,” he said.