Time for a Significant Increase in the Nation's Minimum Wage

Our economy could be strengthened by an increase in the minimum wage that keeps pace with productivity. To accept the current economic trend as normal is to believe the Gilded Age represents the good old days. Can't we do better?
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It is the issue du jour -- be it the recent election, Benghazi, gun violence, the sequester, the nomination of Chuck Hagel as secretary of defense or whether Florida Sen. Marco Rubio sips water during his response to the State of the Union -- that serves to muddy the water regarding one of the most pressing issues for most Americans: the widening gap of income disparity.

Bill Moyers recently reported on his weekly PBS program that between 2009 and 2011, income fell for 99 percent of working Americans. It rose (11 percent) for the top 1 percent.

Such analysis invariably invokes the stale response of class warfare from defenders of the status quo.

Taxes were raised on the top earners from 35 percent to 39.6 percent -- individuals making more than $450,000 a year. Meanwhile, the payroll tax rate for roughly 150 million Americans was increased 48 percent from 4.2 percent to 6.2 percent.

Such outrageous displays of inequality have become common and any criticism of the current economic system is usually protected by select members of the 99 percent who hope to some day gain admission into the 1 percent.

During his State of the Union speech, President Barack Obama received a standing ovation, by the Democratic side of the chamber, when he called for the minimum wage to be increased to $9 an hour. A good start, but it is less than the president's proposal during the campaign.

According to economist Dean Baker, after more than a decade of losing ground to inflation, an increase to the minimum wage is long overdue.

Baker argues that productivity has doubled since 1969, but the minimum wage no longer keeps pace. Baker concludes that had the minimum wage kept pace with productivity, it would currently stand at $16.50.

The common retort against raising the minimum wage at all, let alone to $16.50, has been it will hurt those it is intended to help. If the minimum wage is increased, it is argued, employers will be forced to cut jobs. And that by raising the minimum wage, fewer people would be hired.

But the White House estimates 15 million people would benefit from an increase to the minimum wage. If the minimum were closer to the $16.50 per hour that Baker recommends, it would create a multiplier effect.

Those individuals would spend more money on goods and services, which would spur the economy by creating more demand, which creates more jobs. But the current federal minimum wage of $7.25 an hour cannot achieve that outcome; neither can the $9 an hour that the president proposes.

Economist Richard Wolff recently opined that a number of economists with a wide range of political perspectives concluded the employment change resulting from an increase in the minimum wage is negligible.

"At the very least though," Wolff contends, "we have transformed the lives of 15 million American working people and their families from one of impossible to get most of what America offers, to a situation where at least you're closer to a decent minimum life."

Our economy could be strengthened by an increase in the minimum wage that keeps pace with productivity.

Are we content to remain silent, cajoled into the perpetual state of reaction by cable news shows' latest outrage while the gap between those on the top and on the bottom continues to widen?

To accept the current economic trend as normal is to believe the Gilded Age represents the good old days. Can't we do better?

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