For nearly 30 years, the national rate of inflation has increasingly outpaced the federal minimum wage. The massive gap of an individual’s actual worth and the price of inflation in the past few decades has gotten so bad that retail and restaurant workers are in protest, and families are struggling like never before.
The Atlantic reported that, when converted to present value, the minimum wage in 1968 was enough to keep a family of three above the poverty line. Persist through the decades, add massive inflation and a stagnation in wage increases, minimum wage is now below what could possibly support a family of two.
President Obama brought that issue to the American public’s attention Wednesday when he spoke at an event held by the Center of American Progress.
“It’s well past the time to raise a minimum wage that, in real terms right now, is below where it was when Harry Truman was in office,” said the president.
The current federal minimum wage is $7.25 per hour, but the Senate has drawn up a measure that, if passed through Congress and signed off by Obama, would raise it to $10.10. In July, a poll indicated that the proposed pay increase enjoyed an overwhelming 92 percent support from registered Democrats.
The poll also indicated that 62 percent of registered Republicans support a minimum wage raise. Right-wing politicians don’t reflect their constituents interest, however.
House Republicans oppose the measure because they think it will hurt business, but some reports illustrate the opposite effect. Chris Tilley, director of the Institute for Research on Labor and Employment at UCLA, said that “If all companies have to do it, it doesn’t end up changing the consumer’s experience very much.”
Companies would benefit from raising the minimum wage in that they would most certainly increase worker satisfaction, thus decreasing turnover. And because there would be less employee turnover, companies would save more money on training. Just in the United States, businesses spend over $62 billion on employee training.
Bersin, a business analytics, conducted a study on company expenditures in the training market. Bersin asserted that “Retailers, which have high levels of turnover and employ lower wage workers, for example, spend less per employee but actually deliver [training] more hours.”
Employee training is expensive, and having to constantly retrain new workers because people either quit or get fired because of lacking motivation, which is largely attributed to low pay, just adds more to the cost.
So far, six states and Washington D.C. have approved an increase on their minimum wage, some of which by a huge margin. California’s minimum wage will see a two dollar jump, from $8 to $10 per hour, by January 2016 after Gov. Jerry Brown signed a bill approving the raise in September.
Washington D.C. residents will enjoy the highest wage. Just this week, the Washington D.C. City Council unanimously approved raising its minimum wage to $11.50 per hour, which, like California, will take full effect by January 2016.