Celebrating the Minimum Wage Increase

by Melanie Weldon-Soiset 07-24-2009

People of faith can celebrate today as the federal minimum wage increases from $6.55 to $7.25 an hour. After wages stagnated for a decade at a 1997 hourly rate of $5.15, today’s boost is the third and final one in an annual series that Congress approved in 2007.

First implemented during the Great Depression, the minimum wage sought both to protect workers and to improve the economy by enhancing consumer purchasing power. Some argue that the market should naturally determine wages based on supply and demand, yet we have seen how an unchecked market has led to exploitation of workers and an even greater disparity of wealth that is dangerous for the economy as a whole. A minimum wage treats workers with dignity and keeps our economy on a healthy, sustainable base.

In addition to challenging any mandated price floor, opponents also say raising the minimum wage hurts small business. Yet a 2006 poll found that 86 percent of small-business owners deny that the minimum wage affects them. Indeed, many in the business community actually support a higher minimum wage not only because it shows workers respect, but because it leads to higher productivity with happier employees and lower turnover. Surprisingly, Fox News has also published an endorsement of the modest 70 cent minimum wage increase.

The church should approach wage conversations not primarily as economists, however, but as advocates for low wage workers. We can cheer today’s wage increase as a step toward affirming that every person is made in the image of God. But $7.25 an hour is still not enough.

Just ask low-wage workers Joseph Fuller and Isabel Wang (not their real names) who work almost 40 hours a week, yet cannot cover their basic needs. 44-year-old Joseph lives in a D.C. homeless shelter that supplies his housing and food, and Isabel depends on a local Christian ministry to provide her with free clothing and groceries every week. As Joseph observes, “What I’m earning now is below the poverty line … I’d need to earn $14-$15 an hour [to support myself], but I would still probably need public housing help.” Isabel adds, “I like the work I do, but if there were a job with better pay, I’d take it. Salary matters a lot to me.”

32-year-old Isabel has held her current job in a restaurant for over three years, but has never been offered a raise or a promotion. Joseph also desires better conditions at his job as a waiter’s assistant. “If [there were] better pay and more consistent hours, it would encourage me to stay longer.” As it is, Joseph notes that he and his coworkers are constantly looking for better jobs. Not surprisingly, the respective restaurants where Isabel and Joseph work both have very high turnover largely because of the low pay.

The church should applaud today’s pay increase to help people like Isabel and Joseph, but we can do more.

As the gap between the rich and the poor grows to a dangerous level in the U.S., we must encourage better pay for those struggling to survive at the bottom of this gap. A leading minimum wage advocacy organization, Let Justice Roll, is asking people of faith to advocate for a wage increase to $10 an hour by 2010. Click here to learn more about the “10 by 10” campaign and to urge your legislators to bring the minimum wage closer to meeting workers’ daily needs.

Melanie Weldon-Soiset is a Beatitudes Society fellow at Sojourners.

Categories: Economics, Human Rights

justintime

What do all of you libertarian scrooges do for a living anyway?

justintime

Libertarian propaganda claiming that raising the minimum wage will hurt the poor is unsupported by any real evidence.
Libertarian 'think tanks', such as the Cato Institute, provide excuses for indifference to the suffering of the unfortunate poor in America.
The Economic Policy Institute provides a Fact sheet for the 2009 minimum wage increase and estimates that the increase to $7.25 will, over the course of the following 12 months, boost consumer spending by over $5.5 billion.
http://www.epi.org/publications/entry/mwig_fact...

Nathan Bedford

My daddy worked for the minimum wage during the 1950s to support our mom and 7 kids. None of the increases hurt his employer, but did help to put food on our table.

Lord_Voldemort

Might I propose another "ten by ten" initiative? Let's see if we can keep unemployment under 10 percent in 2010. Once the economy recovers, then maybe we can talk about a minimum wage increase. Maybe.

LV

xfree9

I think the answer is that many poor people would lose their jobs and businesses would suffer because they could not hire workers at a reasonable wage to do the work.

That's one option. The other is to raise prices on everyday purchases. Many minimum wage jobs are in the service industry. If the owner decides not to cut jobs, or cut back on hours, due to an increase in the minimum wage, then he either has to take a cut in profits (which means slower growth for the business, and possible future jobs are sacrificed), or he has to raise the costs of the services he offers. So when you and I see rising prices, we buy less things, because our wages aren't going up. So we stop at Dunkin Donuts a few less times per month or week; we buy a small bottle of soda instead of a larger bottle. We buy fewer goods, which means the economy slows down.

There are myriad studies about the Great Depression, and Hoover's and FDR's initiatives to keep wages high. It had a horrible effect on the economy as a whole.

To the author's credit, I don't think she believes that the minimum wage is a "biblical position"; rather, she likely believes it is a way of helping the poor, when in fact it actually hurts the poor. Sure, it helps some people But 75% of people making the minimum wage are dependents. I guess that means more teenagers buying more electronics with their government-mandated "raise."

Minnesotan

I would sure appreciate the author of this piece to respond to the compelling comments that show that raising the minimum wage hurts the poor. The author writes as if it is clear cut that the Biblical position is to raise the minimum wage. I especially would like to read a response to the argument that the government should raise the minimum wage to $100 an hour ("100 in 10"). I think the answer is that many poor people would lose their jobs and businesses would suffer because they could not hire workers at a reasonable wage to do the work. Also, I am familiar with wages and job openings in the D.C. area. I am surprised that her homeless friends are settling for minimum wage jobs, when many entry level jobs pay more than that.

xfree9

I'm very happy your state has an inflation-adjusted minimum wage. One of my complaints about the federal minimum wage is that it is all too often used for political gain: "Look what we did for you," say the advocates, "And look what THAT GUY voted against!"

One thing to think about: do you consider inflation inevitable? Do you think it is a natural occurrence of the free market? If so, you may want to investigate the Federal Reserve banking system. If you start to grasp what the Fed is doing with our money, you'll understand how inflation is so horrifyingly evil with regards to social justice.

4HisGlory

Wow; that's a great comment. And I think that your example is a very good one. Thank you for sharing that. I think that what troubles me is the tone or notion of articles such as this one which makes it feel like the government has really done something right because it "helps the poor." What I have observed for years but especially in the last six months is that every action has an equal and opposite reaction. Our intentions may be good but without consideration for the consequences of our actions, good intentions fall flat. I just hate to see the chuch consistently (right and left politically) putting their hopes in a government system rather than the transforming gospel. Thanks for your comment.

1Grace

4His Glory we should be advocates for low wage workers ? Are there not factors involved in this issue that can complicate it from both sides ? Any yet still be an advocate for people ?

Example would be in my state , we have a minimum wage that goes up automatically with the inflation rate . My wife is a Director of a preschool and day care . Since it is a ministry of our church , we reach out to low income families . So say poor families pay a considerable lower rate when the state helps them , but the amount of pay workers and staff receive is he same . Hence some day cares will not take poor because of this . We have even taken special needs children who require staff workers for continued around the clock care , thus limiting the amount of children the day care can take in of other children . The thing is since this a ministry , we do things that day care business would not do ordinarily , and many of the jobs are taken by women at our church who have hearts of mercy and love . But the state does not pay increase amounts when they place children in day cares , but they force the employees wages to go up . Just one instance I believe that issues can get complicated when you are dealing with state regulations , in this case hurting the poor for a noble cause , raising pay for the poor.

4HisGlory

"The church should approach wage conversations not primarily as economists, however, but as advocates for low wage workers. We can cheer today’s wage increase as a step toward affirming that every person is made in the image of God. But $7.25 an hour is still not enough." Huh? Minimum wage is a way of affirming the image of God? How? Because the government shows its "compassion" in this manner? The church's job is advocacy for low wage workers? Sure, on the surface that's fine, but I thought our mission was the gospel, working for and with the poor so that they might see the far greater glory of Christ. When will we naive Christians quit putting our hope and trust in a goverment, president or legislators and do as a church what we were called to do - to share the love of Christ with a sin-burdened world and rescue their souls while we work with and through the church to do what no earthly government will ever do.

flow_hoe

God bless unemployment! Hallelujah!

xfree9

I was thinking about this whole ordeal, and the author quotes a 2006 poll citing support for a minimum wage increase.

2006. Ya know, back when we we all deluded that the economy was booming, and we didn't know that it was unsustainable. Ya know, when small business could borrow money at interest rates lower than inflation (which means it paid to borrow!). Ya know, when people were spending money they didn't have because they thought their homes would magically rise in value, so they were spending and small businesses could afford to pay a little more if they were forced to.

If we hadn't had such inflationary measures and monetary policies in 2006, the price of wages wouldn't need to go up because the value of the same wages would increase. Inflation hurts the poor. The central banking system and its collusion with the federal government is at the core of this problem.

xfree9

Yeah, you must be a bigoted capitalist hatemonger who only wants to see eyelidless children suffer from too much sun and starve to death.

bhaack

I find little to celebrate that people are no longer permitted to work for less than $7.25 per hour. It amounts to telling people who's labor is worth less than $7.25/hour..."tough luck, you are not permitted to participate in our economic system."

But I suppose I'm not a "person of faith."

xfree9

The Cato Institute reports on the reporting, praising those who acknowledge the pros and cons to society, as well as criticizing those (NY Times) who ignore the cons to the minimum wage increase.

It's not an easy answer. At most, I'd agree to a state minimum wage laws being more accurate and effective, though even that is debatable.

newsmonster09

There are many news outlets that aren't as optimistic about the minimum wage increase. The higher wages may cause many employees to loose their job, or worse, a large number of small businesses many go out of business. http://www.newsy.com/videos/the_cost_of_minimum... How does that help the economy?

xfree9

Hidden costs of the minimum wage.
Good intentions, bad results
Great Myths of the Great Depression

If you want wages to have more buying power, end the Fed, return to a gold standard, and prices will drop as wages have more buying power. During the late 1800s, this is how it worked.

A minimum wage is price controls. Price controls lead to shortages (remember the 1970s with Nixon's gas price controls?). Besides, why not make the minimum wage $20, or $100?