There are a lot of records that would be great to break.
This isn’t one of them: June 16 marked the longest period in history without an increase since the federal minimum wage was established in 1938.
The federal minimum wage went to $7.25 an hour on July 24, 2009 - nearly 10 years ago. It remains $7.25 today, amounting to just $15,080 a year for full-time work.
When the minimum wage does not go up, it goes down in value relative to the cost of living.
That matters whether you’re trying to work your way through school, support your child or need a job to make ends meet on Social Security.
The buying power of today’s $7.25 minimum is lower than the minimum wage of 1968, which would be $11.96 in 2019 dollars, according to the U.S. Bureau of Labor Statistics Inflation Calculator. Our economy has grown considerably since 1968, but not the federal minimum wage, which sets the floor under worker pay. When the minimum wage is too little to live on it’s bad for business as well as workers.
“When the minimum wage is inadequate it hurts employee health, morale, productivity and retention,” says Marietta, Georgia business owner Kyle Johnson. “And it weakens consumer demand.”
It’s vital to remember that working people are also customers. Increased pay means increased consumer buying power. U.S. Women’s Chamber of Commerce CEO Margot Dorfman said that businesses that pay low wages may save on immediate payroll, but they experience the significant expense of higher turnover, low morale and a less productive workforce.”
When the minimum wage goes up, worker financial stress and turnover go down, and businesses save on hiring and training costs. They see lower error rates, less product waste and better customer service.
While the federal minimum wage has stagnated, more states have acted. Twenty-nine states have minimum wages above the $7.25 federal level set in 2009. But only three states currently have a minimum wage greater than or equal to $12, approximating the 1968 value.
Job growth has been better in states that have raised their minimum wages than those that have not.
We need a decent new federal floor, as called for in the Raise the Wage Act, which would gradually raise the federal minimum wage to $15 by the year 2024.
Nearly 40 million workers would get a raise if the minimum wage goes to $15 by 2024. The typical worker who would benefit is 35 years old - working jobs from preschool teacher to health care aide, cook to cashier to manufacturing worker.
Keeping the minimum wage low will not help small businesses compete with big businesses. Costco and Amazon already pay $15 minimum wages. Target’s at $13 and going to $15 in 2020. Forward-thinking small business owners know that to survive and thrive amid big chains and online giants, you need employees who want to work for you and customers who want to buy from you.
When the minimum wage does not go up, it goes down in value relative to the cost of living.