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Raising the Minimum Wage for Working Men and Women in California and the Rest of America

Hey, Washington! the Pay Is Too Damn Low: The Minimum-Wage War

Giving America’s lowest-paid workers a raise is great for the economy. And even better for Democratic prospects in 2014

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Nearly five years into the recovery from the Great Recession, the American economy remains fundamentally broken. Inequality is getting worse: Ninety-five percent of income gains since 2009 have gone to the top one percent of earners. Private employers have added more than 8 million jobs, but nearly two-thirds are low-wage positions. The American worker’s share of the national income is as low as it’s been in the six decades since World War II. But even as most Americans struggle just to tread water, corporate profits have soared to record highs.

Why It’s Time to Start Pushing For a Minimum Wage Hike

Worse: The bottom rung of the economy is growing crowded; 3.8 million Americans – the equivalent population of the city of Los Angeles – now labor at or below the minimum wage. And that wage itself has lost more than 12 percent of its value since it was last hiked to $7.25 in 2007, due to inflation. In a more prosperous era, the stereotype of a minimum-wage worker was a teenager flipping burgers, earning a little beer money on the side. But in the new American economy, dominated by low-wage service jobs, fewer than one in four minimum-wage workers are teens. More than half are 25 or older. “The demographics have shifted,” says Rep. George Miller, ranking Democrat on the House labor committee. “These are now important wage earners in their families.”

As a matter of public policy, the solution is obvious. There are few government interventions that can match the elegance of a higher minimum wage. It boosts the fortunes of the working poor and the economy at large, with minimal trade-offs. Raising the minimum wage does little or nothing to dampen job growth. The Congressional Budget Office estimates that an increase to $10.10 would trim payrolls by less than one-third of one percent, even as it lifts nearly 1 million Americans out of poverty.

Outside of Washington, D.C., raising the minimum wage is not a partisan issue. Supported by more than 70 percent of Americans, the policy achieves both liberal and conservative goals: It alleviates poverty even as it underscores the value of hard work. It reduces corporate welfare even as it lessens dependence on the social safety net. Today, taxpayers are shelling out nearly $250 billion a year on welfare programs for the working poor. Nearly 40 percent of food stamps are paid out to households with at least one wage earner.

And yet, the Republican Party is going all out to portray a mandatory pay hike as just more job-killing nanny-state overreach. “You’ve gotta totally wipe out this notion of fairness,” said Rush Limbaugh. “That’s not what a job is. It isn’t charity.”

The GOP’s mysterious determination to wrong-foot itself with the American electorate on the minimum wage is handing the Democratic Party a potent political weapon – one that could make the difference in holding the Senate in November.

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The political battle lines have been drawn. But is $10.10 really the best that America can do by its poorest workers? The experience of other advanced democracies suggests that the minimum wage could rise far higher still. In Australia, the minimum wage is now greater than US$16 an hour, yet the unemployment rate Down Under – 5.8 percent – is significantly lower than our own.

Nationwide, there is one high-profile campaign to push the minimum wage significantly above $10.10. Ironically, this leadership is coming from the conservative end of the spectrum. Ron Unz, a Republican multimillionaire from Silicon Valley, is advancing a ballot measure to hike California’s minimum wage to $12 an hour.

Unz is best known as a foe of illegal immigration, and he says he was initially attracted to the minimum wage as a means to put U.S. citizens back to work in the kinds of jobs Americans supposedly won’t do anymore. But Unz has since embraced livable wages on the economic merits alone – arguing that no American should be forced to subsidize the labor costs of profitable corporations. Unz has especially harsh words for those, like Florida’s freshman senator, who would increase the Earned Income Tax Credit instead of forcing Walmart to pay honest wages. “Why should all taxpayers pay for massive, hidden government subsidies?” he asks. “But that’s what Marco Rubio and fellow Republicans are calling for: an increase in welfare spending!”

In the past, conservative opposition to higher minimum wages was premised on the fear that they would drive an increase in joblessness, creating greater dependency on the welfare state, Unz says. But now that hard economic data prove the opposite case – that higher hourly wages don’t kill job growth and simultaneously reduce reliance on Uncle Sugar – Unz believes there’s no reason this policy shouldn’t unite both bleeding-heart liberals and Mitt Romney conservatives, who fret about the freeloading of the 47 percent of Americans who don’t pay income taxes.

“There are a lot of conservative reasons,” Unz says, “to increase the minimum wage.”

• Category: Campaign, National, Notable • Tags: Tim Dickinson