In 1968, workers in the United States worked for no less than $1.60 an hour. That’s the same buying power today of just over $12.
Yet, it’s no secret that the federal minimum wage has been stuck at $7.25 for the past decade, which is actually worth $1.60 less today than when it was last raised in 2009.
Working full-time on the federal minimum wage would earn just $15,080 a year — well below the poverty line, even outside New York City. But that’s why lawmakers did something about it, pushing hard a few years back to raise minimum wage to an almost living wage of $15 an hour.
While such a move is necessary to help share some of the wealth of our continued successful economy, it’s something that doesn’t come without some pains for business, especially small businesses.
It’s not that workers shouldn’t make more — it’s that the legislature has asked businesses that typically build in about a 3 to 5 percent annual increase in payroll to suddenly take on double and even triple that.
Businesses have to shoulder the burden of the increases, but it’s not fully their fault. Our leaders in Washington treat minimum wage as a political football, to the point where convincing Congress on any increase is something that just never happens anymore. Beginning in 1938, minimum wage was raised every few years. But when Ronald Reagan took office, minimum wage rose to $3.35 in 1981, and didn’t budge until after he left office in 1990.
There was a 10-year gap between 1997 and 2007, and now we’re in the midst of another decade gap on the federal level at $7.25.
These partisan battles force businesses — and our society — to have to play catch-up. First it affects workers who spend too many years being underpaid, and then it affects businesses who have to find ways to pay for large payroll jumps just to catch up.
Minimum wage should be adjusted each and every year, set to inflation rates. It’s easy, it’s automatic, and the increases are so small that it won’t leave employers scrambling in the midst of large wage increases, while employees worry if they’ll still have a job once the holidays are over.
These increases are long overdue. They should be implemented as quickly as possible. But not so quickly that businesses have to suffer because lawmakers failed to get their act together before now.