The minimum wage debate is often characterized for its polarizing power to separate Republicans and Democrats, but the American public is looking for discussion. To ensure economic justice, it’s important to define what constitutes a livable wage and to take a closer look at this hot button issue.
The federal minimum wage currently stands at $7.25 an hour. The last minimum wage increase was made in 2009, and today many are calling for what they believe is a long overdue raise.
One notable case making recent headlines involves the popular discount store Wal-Mart. In Washington D.C., the city council passed a bill entitled the Large Retailer Accountability Act. Were it to come into law, this bill would require retailers making north of one billion dollars a year (i.e. Wal-Mart) to pay their employees $12.50 an hour, overriding the District’s current $8.25 minimum wage. Wal-Mart has threatened to pull out of several planned locations in the District should the bill pass.
What impact would a new minimum wage have on the retailer like Wal-Mart to incite such a foul reaction? A study by the Labor Center at the University of California at Berkley found that a 12 dollar minimum wage would increase Wal-Mart’s product costs by approximately 1.1 percent. These numbers cause me to wonder if this change would really hinder successful business, or if Wal-Mart might be more concerned about the precedent it might set.
Wal-Mart is not the only culprit when it comes to dodging the debate. Recently news sources have also highlighted protests from fast-food restaurant workers across the country, asking for a more livable wage. Current wages for employers, which notoriously loom around the minimum wage, are being referred to as “poverty wages” in said rallies. For many of these employees, a 40-hour work week translates to roughly a $15,000 annual salary, which in today’s economy is not sustainable. The average McDonald’s employee is not a high school student looking to make some spending money, but a 28 year old adult, according to the Bureau of Labor statistics. The minimum wage issue has become a family issue, and we need to ask: who is really paying the price?
One of the major arguments against raising the federal minimum wage is that companies will not be able to afford pay-check increases. With more of a company’s budget being dedicated toward wages, surely they would have to make cuts in other areas, one of those areas possibly being the number of employees. I would like to argue that that does not have to be the case, and that other innovative solutions may be at our fingertips. With an effective allocation of assets, I believe retailers can sustain themselves and their employees in a healthier fashion. I think this is a fair argument to raise, as we currently live in a country where CEOs can make over 250 times what their employees make.
The Center for Economic and Policy Research released a study in May citing that if minimum wage kept pace with productivity, it would currently be $21.72 an hour. This is a disturbing statistic. When workers are paid more, they are likely to spend more money at their place of hire, in addition to stimulating the economy with their income, benefiting other businesses in the process. For workers and employees, it seems like a win-win situation, but these economic concepts have yet to come to fruition.
What it comes down to, however, is not simply a logistical issue. Minimum wage is a question of fairness, opportunity, and responsibility. If our current system is forcing the marginalization of retail or fast food workers then we have a problem. Hard work and sacrifice should be met with a chance to seek a sense of livelihood for oneself and one’s family. This is not currently the case, and therefore, as the living wage debate continues to gain momentum, we ought to take part in the conversation.
-Jenny Hyde is currently a senior at Gordon College majoring in International Affairs with an International Development concentration. She is an advocate for political engagement and gender equality.