Americans may not have a firm grasp on current minimum wage issues, but they do have an idea of where things should be when it comes to fair pay and living wages. If Americans are able to reconcile their goals with the present state of affairs, their ideals could be turned into reality.
A Business Insider poll shows Americans slightly overestimate the federal minimum wage. The average response pegged minimum wage at $7.81 per hour, 56 cents higher than the $7.25 guaranteed by federal law (not accounting for tipped employees).
Considering many Americans also think the deficit has risen over the past year (it has actually shrunk), this seems relatively insignificant.
It gets interesting when the poll asked respondents what the minimum wage should be. The average response: $9.86 per hour, a dollar amount higher than any state’s minimum wage. (Some cities like San Francisco offer a wage over $10.)
Could this information encourage Congress to raise the wage floor? A cynical observer would say no, given Congress’ inability to fund the government without a national upheaval. President Obama did urge Congress to raise the minimum wage in his 2013 State of the Union speech.
Congress responded with an overwhelming shrug.
They meagerly offered some bills, but none managed to gain any traction, an unfortunate oversight because more public support exists for hiking the wage than Congress knows.
Regardless of congressional inclinations, however, this conversation is actually about what states must do.
The State of the States
Currently, the highest state minimum wage of $9.19 per hour comes from Washington. The Evergreen State is about to be dethroned, however; California passed a bill in September raising their wage to $10 per hour by 2016.
Not to be outdone, voters in the Seattle suburb of SeaTac, home to Seattle’s airport, are considering a minimum wage as high as $15 per hour. Lawmakers in Washington, D.C., which recently considered a law that would raise the wage for big-box retailers like Walmart, are joining forces with two Maryland counties to work toward an $11.50 per hour floor. New Jersey voters will decide in November whether to raise their state’s minimum; polls indicate the idea has strong public support.
Lest anyone think only blue states are interested, Ohio’s minimum will rise slightly this January as the result of a 2006 constitutional amendment indexing minimum wage to inflation. This might be a small step, but it ensures workers don’t entirely lose ground.
This comes on the heels of strikes from fast food employees nationwide demanding the federal wage be more than doubled.
While the strikes didn’t lead to federal action, the push on state and local levels dovetails with growing concern over another problem: income inequality.
The Great Divide
Income inequality can shorten lifespans and slow economic growth, among other factors. According to the Organization for Economic Cooperation and Development (OECD), the United States is doing worse than most countries on income inequality. The Century Foundation’s Benjamin Landy shows the Great Recession only made inequality grow.
Worse still, low-wage jobs are incredibly costly to taxpayers, since low-wage workers also rely on public assistance to survive, blasting a hole in government budgets. Workers at a single Walmart could cost taxpayers as much as $900,000 a year in benefits, according to a report from House Democrats.
Additionally, multiple studies have found raising the minimum wage hasn’t historically corresponded with significant job losses, a common argument of the right. This makes sense — increasing wages gives people more money to spend, and it helps address the costly problem of employee turnover.
As outlined above, Americans do have a good idea of what the minimum wage should be — and it’s more than the government currently requires. It’s clear Americans can tolerate a higher minimum wage due to state implementations. Congress may not act, but maybe they don’t have to.
It should be said: Raising the minimum wage isn’t a cure-all. Paying workers more would help them get by; a February report from TCF found raising the minimum to $9 an hour, President Obama’s ask in the State of the Union, would increase worker pay in almost every state.
Its effect on inequality, though, could be minimal, depending on the amount raised. Other policies, including tax increases, would also be needed to adequately address America’s rampant inequality.