By Marc Morial
President & CEO, National Urban League
Because adjustments in minimum wage have not kept pace with increases in the cost of living, the real value of the minimum wage has significantly decreased over the years.
It has been 46 years since the minimum wage, then $1.60, reached its peak value (in real terms) of $10.69.Â In other words, to equal the same purchasing power that minimum wage workers had in 1968, todayâ€™s $7.25 federal minimum wage would need to increase by $3.44, or 47%.Â Further, when adjusted for inflation, the current minimum wage is worth $2 less than it was in 1968.
Minimum wage has also not been kept on par with worker productivity.Â If it had, todayâ€™s minimum wage would be $21.72 per hour.
Instead, low-wage employees who work 40 hours a week at the current minimum wage make roughly $15,000 a year.Â The majority of those who would benefit from a minimum wage increase are adults in working families, primarily women, who depend on this income to support their families.
Six hundred economists â€“ several of them Nobel laureates â€“ recently signed a letter to the President and Republican and Democratic leaders in support of increasing the minimum wage to $10.10 by 2016 and then indexing it to inflation thereafter.Â The majority of credible research shows that a minimum wage increase has minimal, if any, negative effect on employment, even during a weak labor market.Â It could indeed have a positive economic impact as these workers invest their additional earnings back into the economy through spending on such basic needs as housing and food â€“ thereby increasing demand and jobs.
The case for increasing the minimum wage is clear.Â Itâ€™s time to make the minimum wage a living wage.
President Obama signed an executive order last month to raise the minimum wage for federal contract workers to $10.10 an hour starting in 2015 and encouraged employers across the nation to increase wages for their workers.
The National Urban League supports an increase in the minimum wage, and we urge Congress â€“ and you â€“ to act now.
Click on the link below to sign our Raise the Minimum Wage petition and tell Congress that itâ€™s time to give America a raise.