Minimum wage increase: an investment in the value of work

published Tuesday, July 31, 2007

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Families all over the US have an additional reason to celebrate July 24 this year and for the next two years. This is the day we will finally see a long-delayed increase in the minimum wage. Our grandparents’ generation first enacted this moral principle in 1938 to reflect the basic American value that an honest day’s work deserves an honest day’s pay.

In fact, this July 24 marks the end of the longest period when there has been no increase. Since September, 1997 – the last time the minimum wage was raised – the lowest paid workers in our country have had to absorb a 26% increase in the cost of living with no increase in income.

Cheers go to Rep. Mike Simpson who supported the increase, after opposing it in past years. Rep. Bill Sali, however, canceled out Simpson’s vote and rejected even this modest increase. Senators Mike Crapo and Larry Craig voted for the increase too but only after $8 billion in new corporate tax breaks were passed as well.

While the minimum wage increase will directly affect only about 3.2% of Idaho workers, the principle is still solid: our country must value work not just with words but with actions. A minimum wage is not a living wage. It is only a floor below which it would be immoral to expect people to work. The vast majority of workers in this country making minimum wage – 79% – are adults, not teenagers. Many are raising children, and most minimum wage workers - 53% - work full time while another 31% work between 20 and 34 hours per week.

The claim that minimum wage increases cause job loss is not supported by the facts. It has been extensively studied. In fact, following the 1997 minimum wage increase, the low-wage labor market performed better than it did in previous decades including a drop in unemployment. Studies by the Economic Policy Institute show that when the minimum wage increases, workers tend to stay with their jobs longer and employers have reduced recruitment and training costs.

However, job loss has been in the news this month because of our country’s trade policies that encourage multinational corporations like Micron to leave workers behind. The tragic irony is that the Idaho legislature - naively ignoring the reality of global trade – shifted a greater tax burden on workers when it gave Micron more tax breaks.

After years of enacting policies that subsidize some of the largest corporations in the world, our government is finally recognizing it can no-longer ignore hard working low-wage workers in our country. We still have a long way to go to live up to the values our grandparents passed on to us, but at least we seem to be getting back on track.

[This op.ed., authored by Jim Hansen, Executive Director of United Vision for Idaho, ran in several Idaho newspapers on July 24]