At the Minimum

At ShopRite supermarkets this week if you spend at least $10 you can buy:

A gallon of whole milk for $4.06

A loaf of store brand white bread for 74 cents

20 pounds of store brand white rice for $9.89

A 15 ounce can of store brand red kidney beans for 61 cents.

A pound of 80/20 chopped meat for $4.06

With the right coupons you can buy:

A picnic pork shoulder for 99 cents a pound

Chicken drumsticks or thighs for 99 cents a pound

A can of Maxwell House Coffee for $1.99

4 cans of Progresso Soup for $5

A head of iceberg lettuce for 99 cents.

If you have a young child this week you can buy her six pairs of Haines white socks for kids for $4.49. You can buy two 15.5 ounce containers of Purex laundry detergent for $4 to wash them with -when you can afford the laundromat.

Now, suppose you are a single mother with two children, let’s say a 9 year-old boy and a 7-year old girl, you somehow manage child care and you work 40 hours a week paid at the $7.25 an hour federal minimum wage.

Your gross weekly check is $290, $15,080 a year.

After the mandatory 7.65 percent FICA deduction for Social Security and Medicare your net weekly check is $268, $13,936 for the whole year – assuming no deductions for federal or state income taxes or for state unemployment/disability insurance, though of course there will be.

Somehow on less than $14,000 a year, even with food stamps, federal chilren’s health insurance and maybe some rent assistance you have to feed, house, cloth and provide medical care for yourself and two children, while you keep the lights on and the heat working.

You have to manage to do that in a country that says you are officially poor if the annual income for a one-person household is $12,880, or $17,980 or less for a three person household like that of our working-mother and her kids.

The 1938 Fair Labor Standards Act established the federal minimum wage. It took effect that year at 25 cents an hour. It reached $1 an hour in 1956, $5.15 an hour in 1996, and $7.25 an hour in 2009 – and there it has stayed.

In its first 71 years, the federal minimum wage increased 29 times, on average of about once every two and a half years, about every 30 months. By this historical measure it should have increased in 2011, 2013, 2016, 2019 and now, at the start of 2021.

It should have increased at least by a few pennies five times. It hasn’t budged in 12 years.

In the 12 years since a Democrat House and Senate last raised it, the minimum wage has remained unchanged with Republicans in control of at least one house of Congress or both. They remain opposed to an increase now.

The buying power of $7.25 in 2009 today is $5.97, while keeping pace even with that low wage would put it at $8.64 in today’s dollars, notwithstanding very modest inflation the past dozen years.

The federal minimum wage covers most workers but not all and so every state has its own wage law even if it is simply to peg it to the federal level or to assure that minimum wage workers are better paid than at the federal rate.

According to the New York Times the actual federal minimum wage is earned by 1.1 million workers, bad enough except tens of millions more earn wages suppressed by the artifically low federal hourly wage floor.

The highest state minimum wage this year is California’s, $14 an hour for businesses with 26 employees and otherwise $13 an hour. The highest universal state minumum wage is that of Washington, $13.69 an hour.

The lowest state minimum wages are those of Wyoming and Georgia, $5.15 an hour. Imagine that. In the year 2021 the state minimum wage in those two red legislature states is what the federal minimum wage was in 1997. Choose your word for that – cruel, stupid, mean, barbaric. How about all of them?

Seveteen states, including Pennsylvania, set theirs at the $7.25 an hour federal level. In all 17 Republicans control the legislatures. Most also have Republican governors.

As a matter of interest, state rates this year in New Jersey are $12 an hour, $13 an hour in New York and $13.50 an hour in Massachusetts. The New York Times reports that 20 states and 32 cities have or will move the minimum wage to $15 an hour over the next few years. No state is there yet.

In the private sector the retail behemoths Amazon, Walmart and Costco, with conditions and caveats such as excepting part-time workers, exceed all state statutory minimum wage levels. The first two are at or moving to $15 an hour while Costco just announced a move to $16 an hour.

Opponents of minimum wage increases – Republicans, the U. S. Chamber of Commerce – always contend that small businesses cannot afford hourly wage increases. Always that is not the case. Always the economy grows, the demand for lower wage workers increases and businesses expand revenue and profit.

As cited this week in the New York Times, a study by a University of Massachusetts economist examined 55 minimum wage increases including 36 in the U.S. In every one it found only a negligible short-term impact on employment.

Opponents always say it is inflationary to raise the minimum wage. Too much money chasing too much and too many goods and services is classically inflationary. But bare minimum wage earnings are not, are never too much money. If massive tax cuts are not deemed inflationary, how can nominal increases in the minimum wage be?

There is broad agreement among economists of every political persuasion, notably and especially at the Federal Reserve, that present low interest rates will prevail for a very long time.

Even at 1.4 percent as it was last year in the pandemic-slowed economy, $1 in 2020 is worth but 98.6 cents today. Still, low inflation is cumulative. It has reduced the dollar’s purchasing power about 18 percent since 2009.

If the federal minimum wage increased to $15 an hour, our working mother would go from a weekly income of $290 to $600, from an annual pre-tax income of $15,080 to $31,200, substantially above the federal poverty level at which she and her two children cannot now subsist much less exist.

Two children would be lifted out of extreme, cruel poverty. They would just be very poor instead of being in the most terrible, dire need.