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In 1968 Minimum Wage Should Have Been $10 per hour, Why Is It Only $7.25 Now?

What is minimum wage?  Chris Rock said “it is your boss sayin’, if I could pay you less I would”.  This is so true.  Minimum wage by definition is the lowest wage a person can legally make.  The current federal minimum wage is $7.25 per hour.  That may seem like a lot to some people but it is way under where it should be.

The Federal Minimum Wage was first passed as part with the Fair Labor Standards Act of 1938.  The Fair Labor Standards Act mandated a 25 cent per hour minimum pay.  It was determined that 25 cents was needed keep up a”minimum standard of living necessary for health, efficiency and general well-being, without substantially curtailing employment”.   In 1938, 25 cents an hour was a good wage.

Times have changed a lot since 1938, and so has the minimum wage law.  Since its creation, the law has been updated dozens of times.  The minimum wage has been adjusted every few years to keep up with inflation and cost of living.  As I said earlier, minimum wage was created to “maintain a standard of living necessary for health, efficiency, and general well being”.

Right now minimum wage is $7.25 per hour, this means “the average minimum wage earner takes home only $15,080 a year (before taxes) working 8 hours a day, 40 hours a week” (1).  Just over $15,000 dollars per year! For some area’s of the country this may be a “livable wage” but here in New Hampshire it is far from it.   In actuality minimum wage is not acceptable in any state.

As you can see from the image above, there is no state in the US where a person can afford a two bedroom apartment on minimum wage.   You are probably saying “but that is a two bedroom apartment”.  You would be correct. However “by current standards, this is barely enough for a single person to live frugally in a cheap suburban area. $15,000 a year, claim supporters, is insufficient to support more than one person, and certainly not a family – yet 21% of minimum wage workers are the sole breadwinners of their families (1)”.     According to the Bureau of Labor Statistics, there are more than 3.8 million people who are making minimum wage or less (exempted I.E Tipped employees).

In New Hampshire there are 368,000 hourly employees.   Of that there are 14, 000 workers are paid minimum wage.  The scariest part of this is that 10,000 of the 14,000 are legally paid less than minimum wage.  This equated to about 3.8% of the workers in NH who make minimum wage or less.  This is not great, but still much better than other states.   For example, Georgia tops the list with over 9.5% of their workers making minimum wage or less.  Texas, Florida, and Mississippi round out the top four with over 8% of their workers making minimum wage or less.  To put that into perspective,  Texas has 473,000 workers making minimum wage or less.

I think the time has come that we update our minimum wage law.  We need to raise minimum wage to something more livable.  Now we have legislation in Congress to do just that.  HR 5901 would push the minimum wage up to $10.00 per hour by 2015.  The irony is that even at “$10 an hour, the minimum wage would still be below 1968 levels when adjusted for inflation (2)”.  Hence why HR 5901 is called the “Catching Up To 1968 Act of 2012”.

Consumer advocate Ralph Nader even helped to give this new legislation a push in the right direction.  He stated:

“At a time when the issue of income inequality has been elevated in political discourse, it is surprising that a plight of millions of workers throughout the country hasn’t been addressed,” he said. “A single Wall Street executive’s compensation of $15 million would pay the annual wages of over 700 workers working at a minimum wage of $10 per hour.”

 Even the analysts at the Economic Policy Institute said:

“Raising the federal minimum wage to $9.80 would lift pay for more than 28 million Americans, increase the gross domestic product by more than $25 billion and create the equivalent of more than 100,000 full-time jobs (3).

Support for raising the minimum wage has been around for a few years now.  The last time Congress that passed a minimum wage change was 2006 bringing it to $7.25.  In 2010 a poll by the Public Religion Research Institute cited that 67% of the people polled were in favor of raising the minimum wage to $10.00 per hour.   This political campaign slogan has been used by both sides.  President Obama “promised to raise the minimum wage to $9.50 an hour by 2011” as part of his jobs plan.   His American Jobs Act which mind you is still stuck in Congress.  While Mitt Romney has not said how much he would like to see minimum wage increased, he did say that he supported the idea of adjusting the minimum wage to keep up with inflation.

So get up and call your Congressman and tell them that we need to pass HR 5901, the “Catching Up To 1968 Act of 2012”.  This bill will help the poorest Americans, and help to spur economic recovery in all states.  When people earn more money they spend more money.  When they spend more money, the economy grow.  Raising the minimum wages is just one way to get our country out of this recession.



About Matt Murray

Matt Murray is the creator and an author on the NH Labor News. He is a union member and advocate for labor and progressive politics. He also works with other unions and members to help spread our message. Follow him on Twitter @NHLabor_News
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  1. The Fight Over A New NH Minimum Wage Is About To Begin - Blue Hampshire says:

    […] is already a national push to move minimum wage to $10.00 an hour over the next two years.  The proposal was put in last session and failed to gain […]

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