By Olivia Cooley
As of April 5, New York and California have gone where no states have gone before. They join cities such as Seattle, Los Angeles and San Francisco to incrementally raise the minimum wage to $15 an hour.
For years, economists have grappled with the economic implications of raising the minimum wage. In a 2015 Bloomberg article, Jared Bernstein, a former chief economic adviser to Vice President Joe Biden, said that any jobs lost by raising the minimum wage would be worthwhile for the benefit of low-income workers.
While some economists agree with Bernstein, others are not so sure. Economist Milton Friedman opposed raising minimum wages, saying “people whose skills are not sufficient to justify that kind of a wage will be unemployed.”
In response to both sides of the debate, low wage workers across the country are arguing against the notion that their work is just for privileged teenagers and college students, pointing out that many people rely on these jobs to make ends meet and to support their families. In fact, according to the Economic Policy Institute, the age of the average worker who would benefit from a minimum wage increase is 35 years old.
Setting the economic impacts of the two states’ wage hikes aside, it is important to recognize what the Fight for 15 movement and the resulting legislation represent on a broader scale — justified anger over the increasing levels of income inequality in the United States.
From King James’ 1604 legislation, which set a minimum wage for textile workers, to FDR’s New Deal implementation of the first official minimum wage in the United States, the explicit intent of minimum wage laws has consistently been to provide a living wage for all workers.
According to the Economic Policy Institute, up until the early 1980s, a yearly minimum wage income was slightly above the poverty line for a family of two, meaning a single parent could support his- or herself and one child (albeit meagerly) while earning the minimum wage.
At its peak in 1968, the real value of the minimum wage was enough to even keep a family of three out of poverty.
However, the value of the minimum wage plummeted during the 1980s, when Reagan refused to raise it for all eight years of his presidency. Instead of championing the working class, Reagan highly promoted his “trickle-down economics” plan, which eased up on taxing the upper class, stating that the extra money would flow into the economy as big companies would expand, invest more and hire more workers. Since then, the minimum wage standard has never recovered to its original value and now fails to keep a family of two out of poverty.
Reagan’s stifling of the minimum wage also failed to keep pace with overall worker productivity. According to some estimates, if it had kept pace with productivity, the minimum wage would be about $22 per hour today.
Tim Worstall, a contributor at Forbes, argued that overall worker productivity should not be linked to the minimum wage, since it is impossible to know whether actual minimum wage workers are as productive as the rest of the workforce.
However, in an increasingly investment-based economy that pressures businesses to constantly bring in higher profits, large corporations tend to find ways to squeeze more work out of their employees for less pay. The book Low-Wage America: How Employers are Reshaping Opportunity in the Workplace details some of the measures employers use to increase profits and productivity, such as hotels requiring maids to increase the number of rooms they clean by 50 percent without proportionally increasing their pay.
“Seriously, does anyone think that hamburger makers have become more productive per hour of labour [sic] over the last 20 or 30 years?” Worstall asked.
To answer that question: Yes. It is reasonable to conclude that the average minimum or low wage worker has indeed become more productive in recent years as a result of corporations’ productivity-increasing measures. Workers deserve a wage that keeps up with the overall rate of worker productivity.
The severe and increasing wage gap needs to be addressed in some way. According to Hart Research Associates in January of last year, 63 percent of Americans supported raising the federal minimum wage to $15 an hour by 2020.
While the economic effects of the minimum wage increase remain to be seen, the message being sent by low wage workers is loud and clear: all workers deserve a living wage.
Given the increased support for a $15 minimum wage among Americans, it is conceivable this could become a reality for low wage workers across the country. The new minimum wage legislation in New York and California includes provisions that allow for the slowing or suspension of wage increases if it results in a significant negative economic impact.
As Americans, we need to start to close the wage gap in this country. The increase to $15 could bring us back to a time when families could support themselves working low wage positions. Since the New York and California laws have provisos to prevent economic damage, why not give $15 minimum wage a try?
Olivia Cooley, FCRH ’16, is a women’s studies and Spanish double major from Meriden, Connecticut.
Editors note: This article was updated on 4/14/2016 to revise misspellings and rephrase a paragraph on Worstall’s economic philosophy that had been inaccurately reworded.