07/11/2013 11:01 am ET

Economists Seek to Raise Federal Living Wage

Over the years, Americans have had to come to term with inflation. Gas prices, medical costs have spiked, and food and housing all have put families in a precarious predicament. Yet, minimum wage hasn't quite made the necessary leap to offset some of these costs, leaving many to struggle nearly every week.

While Americans are wondering where the middle class has gone, an antiquated pay system has dug in its heels. Since 1968, the living wage hasn't changed much. However, there is a constant push and pull between lawmakers to fix that.

Well over 100 economists recently signed a "Catching Up to 1968 Act of 2013" petition this week, sponsored by Congressman Alan Grayson of Florida. It is seeking to raise the federal minimum wage from $7.25 (upped in 2009) to $10.50 per hour.

A full-time minimum wage worker currently earns an average of $15,080 a year. For a household of three, this amount puts these families 19 percent below the poverty line.

According to a report published in June by the Political Economy Research Institute (PERI), the average U.S. labour productivity has risen by 135 percent. In reality, the hourly pay increase would be $25.00 today, if it were to have sustained itself from 1968.

Corporate lobbyists continue to fight the increase, claiming it would hurt businesses if adolescents and single households without children were to receive a higher amount. The petition counters these lobbyists, pointing out the majority of those affected are, on average, 32 years of age and only 9.3 percent are teenagers employed during the summer months.

The petition also challenges minimum wage opponents who argue increases are tied to unemployment, saying, "the weight of evidence from the extensive professional literature has, for decades, consistently found that no significant effects on employment opportunities result when the minimum wage rises in reasonable increments... because the increases in overall business costs resulting from a minimum wage increase are modest."

Additionally, the petition details how the fast-food industry would only see a 2.7 percent rise in costs. "These cost increases, note the economists, can be paid for through negligible price increases, small productivity gains or more equal distribution of companies' total revenues."

In the District of Columbia, the City Council passed a living wage increase from $8.25 to $12.50 in June. This would push the pre-tax salary from $17,160 to $26,000 annually. The poverty level is $23,550, which is currently -27.13 percent for D.C. However, if passed, the poverty level would hold steady at 10.4 percent.

This caused an uproar from corporations threatening to halt construction in the city. Wal-Mart announced Wednesday they will not open three new stores in D.C. if this increase is fully implemented, suggesting it would harm its profits. This is not the case. Wal-Mart reported a net income of $17 billion in sales of $470 billion (2012) and many argue this corporation, and others, are more than capable of affording not only higher wages, but health care for their workers as well.