Opinion: We need to raise the minimum wage


Theater junior Ryan Wiles cuts tomatoes at work. Wiles said that as a restaurant worker, he has to work for less than minimum wage, relying on tips for income. Photo credit: Hannah Renton

Dennis Kalob, Economic Policy Specialist, Jesuit Social Research Institute

The federal minimum wage was first established in the 1930s. Since then, it has been periodically increased by Congress and the President. We are now in the longest period between increases. The current minimum wage of $7.25 has remained unchanged since 2009. For those who work for tips, employers can pay as low as $2.13 per hour.

Some 30 states and Washington, D.C. have not waited for the feds to act. They have instituted their own, higher minimum wages. Two-thirds of these states now have minimum wages over $10 per hour.

Louisiana is one of the 20 states stuck at $7.25. A person working 40 hours a week for 52 weeks at this wage is earning (before payroll deductions) just $15,080 a year and is unable to get a family of two out of poverty.

The real value of the minimum wage peaked in 1968. If it had just kept up with inflation, it would be about $12 per hour today. If it had kept up with worker productivity, it would be over $24 per hour.

The minimum wage should be raised to at least $15 per hour and there are plans to do just that. The Raise the Wage Act of 2021 was just introduced in Congress. It raises the minimum wage in several steps until it reaches $15 per hour by 2025. After that, it would be adjusted to keep pace with the growth in the median wage of U.S. workers. It also phases out the tipped minimum wage, so these workers would eventually be covered by the regular minimum.

Some have argued that there would be significant negative economic consequences if the minimum wage were to be increased. Quite the contrary. Researchers estimate that about 32 million workers—that is 1 in 5 U.S. workers—would have their pay lifted by the Raise the Wage Act. A majority of these beneficiaries are what we have been referring to this past year as “essential” and “front-line” workers.

So what about the arguments that a higher minimum wage would actually hurt workers by increasing unemployment? Not true. A great deal of research has been done on this question and the overwhelming evidence is that minimum wage increases have little to no negative impact on employment levels. What higher pay does do—besides help pay the bills of millions of struggling workers—is lower worker turnover, increase productivity, and act as a significant economic stimulus in communities across the country, particularly in communities that we find in poorer states like Louisiana.

Of course, even if it was true that some people might lose their jobs, we should not conclude that therefore we should not help tens of millions of others. In any case, there are many, many things we can do to create additional jobs if we care to do so and I would be all for that effort.

Some people claim that raising the minimum wage would increase prices. Again, the evidence shows little to no such negative consequence. And even if prices were to increase somewhat, that is hardly a reason to refuse to provide to tens of millions of people greater economic security in return for the difficult and important work so many of them perform for all of us.

So, let us all get behind this very important effort to raise the wage.