Union Jack: Minimal progress on the minimum wage

November 15, 2012

Back in 2008, when incoming President Barack Obama still seemed to incarnate progressive aspirations for a wide-reaching wave of social and economic reforms, he spoke about a very basic policy move to improve the lives of the working poor: an increase in the federal minimum wage. As part of the “Obama-Biden Plan” to tackle poverty—which noted that the former Illinois Senator was a “lifelong advocate for the poor”—the President-elect promised to raise the minimum wage to $9.50 an hour by 2011, and index it to inflation.

Four years later, the federal minimum wage remains at a paltry $7.25 an hour, paling in embarrassing fashion to its counterparts across the industrialized West. To put that into context, the United Kingdom’s minimum wage is about $9.80 an hour, and France’s is roughly $12 an hour.

The U.S. minimum wage is not even close to a living wage. The poverty line for a family of four is $23,050, which means that any full-time worker earning wages under $11.06 an hour is below that line. For these minimum wage workers, and the tens of millions of other American workers whose wages keep them well below the poverty line, basic necessities like food, transportation, and housing are barely within reach. In fact, a recent report showed that households working the entire year at minimum wage cannot afford the fair market rent for two bedroom housing in any state in the country.

Out of the administration’s many reneged promises during its first term, this ranks among the most inexcusable. That Obama and his Democratic allies in Congress didn’t prioritize this issue out of some genuine concern for the poor isn’t surprising. But what is genuinely shocking is that amid a recession—and now sluggish recovery—raising the minimum wage actually makes basic economic sense, especially when that wage is so low in the first place.

An increase would put more money into the hands of workers, boost consumption, and help generate economic growth. Leaving millions of workers unable to purchase basic goods is just illogical from a purely economic point of view.

Of course, raising the minimum wage isn’t a solution to everything. Past experience has shown that businesses adjust by raising prices—for instance, inflation wiped away much of a wage increase in France in the early 1980s. Also, an increase in the minimum wage clearly does not alter the other structural factors responsible for poverty and accelerating inequality in the American economy, including wage repression, a regressive tax code that’s riddled with corporate loopholes, and the position of the U.S. in the global capitalist economy.

But to the roughly four million workers struggling to get by from paycheck to paycheck, an increase would make a huge difference. It matters if you’re struggling to keep up with increasing food and gas prices, but your paycheck stays the same. And it matters if you’re trying to support a family, but can no longer afford to pay your increasing rent.

Back in 2009, it seemed possible that the Democratic Party, in control of the White House and both chambers of Congress, would champion an increase in the federal minimum wage. Unfortunately, the prospects for that look rather grim at the moment, especially with the obstructionist, anti-poor Republican Party in control of the House.

But if there is any reason to not abandon all hope, recent months have seen an uptick on this front. Democrats from the House Progressive Caucus—the closest thing there is to a social-democratic political formation in the U.S.—introduced a bill this summer to raise the federal minimum wage to its 1968 level and finally index it to inflation. We can hope that this effort, however futile it may be, will continue in the 113th Congress, if only to keep the issue on the agenda.

Meanwhile, as most of Congress refused to budge on the matter, people finally took this issue into their own hands: in Albuquerque, San Jose, and Long Beach, coalitions of labor unions and community activists organized referenda to boost the minimum wage, all of which passed last week.

These victories, small as they are, remind us of the substantial support that exists for an increase, and the need to build a movement to push for it. Perhaps some unions could dedicate resources toward building a movement on the federal level, or perhaps demands might emerge from a potential progressive coalition organized to oppose the so-called “grand bargain” on deficit reduction.

Ultimately, though, like nearly any other progressive legislation the Left hopes to win during Obama’s second term, an increase in the federal minimum wage will likely come from a social movement with roots among those who need the reform the most, and not from the Congress they elected.

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Scott Myers-Lipton


One important thing you didn’t mention in your blog about minimum wage was that the San Jose minimum wage campaign was started by students.

As the faculty adviser to the student group that created the idea for the SJ minimum wage campaign, I wanted to share with two press reports, as they will give you a feel for the work we have been doing: The first is from Channel 5 and Len Ramirez (It is below the KCBS Mike Colgan report):

The second is from Peninsula Press piece, both the written piece, as well as the video montage:

Lastly, below is the history of the campaign.

my best, Dr. Myers-Lipton

Scott Myers-Lipton, Ph.D.
Professor, Sociology Department
San José State University

In the fall of 2010, Marisela Castro, a student in my Wealth, Poverty, and Privilege course, came up with the idea of starting a campaign to increase the minimum wage in Silicon Valley. Marisela was moved to action because she could no longer stand the injustice she was witnessing at the after school program where she was working. Kids were sneaking food into their backpacks because the parents were making just $8 an hour, which wasn’t enough to ensure food at home. In addition, parents had to work two jobs, making it difficult to provide the necessary support structure for their children to be successful in school. This social injustice drove Marisela to act, and the following semester, Marisela took a Social Action course with the goal of increasing the minimum wage to $10 an hour in San Jose.

In the spring Social Action course, Marisela and several other students conducted background research, and they found that three cities had already increased their city-wide minimum wage: San Francisco ($10.24 an hour), Santa Fe ($10.29 an hour), and Washington DC ($8.25 an hour). Importantly, the social scientific research conducted on the impact of a city-wide minimum wage showed that: (1) it helped low wage workers pay for basic needs like food and rent, (2) it stimulated the local economy, since the people making the minimum wage spent these few extra dollars locally; (3) it did not increase unemployment, and (4) it did not hurt small business, because they generally passed on this cost by raising prices by a few percent.

That summer, students began meeting regularly with Poncho Guevera, Director of Sacred Heart Community Services, Almaz Negash, Director of Silicon Valley, and several other community leaders, about a city-wide minimum wage campaign in San Jose.

In the fall, students in the Social Action course continued working on the minimum wage campaign, raising money to conduct a poll, and then actually doing so. With the poll numbers showing that San Joseans overwhelming support $2 increase to the minimum wage, the South Bay Labor Council joined the leadership team, and became an extremely important ally. Other organizations became involved as well, including United Way, Catholic Charities, Jewish Federal of Silicon Valley, NAACP, and the Silicon Valley Council of Non Profits.

In the spring of 2012, the Social Action students, in collaboration with our allies, helped to gather 36,000 signatures (19,200 were required) needed to put the measure on the November 2012 ballot.

In the summer and fall, our coalition took multiple actions to get out our three messages to the voters: 1) If you work hard and play by the rules, you deserve a fair wage, 2) $8 is not fair since a full-time minimum wage worker can’t pay for the basics on that salary, and 3) increasing the minimum wage encourages self-sufficiency and reduces the need for government services.

On November 6, 2012, San Jose citizens agreed with the coalition, and voted 59% to 41% to enact a $10 city-wide minimum wage, with an annual increase based on the consumer price index. Ninety days after the election, it will be Time for Ten.