Obama Takes First Step - Congress Needs to Act Now

The chart above was not made from some leftist group's information, but from the nonpartisan Congressional Research Service -- the organization that provides both parties in Congress with reliable information on which to base future policies. The chart illustrates the real buying power of the minimum wage in 2013 dollars. Note that the high point of minimum wage buying power was in 1968 (when it was worth $10.77 an hour), but from the 1950's to 1980 the wage was pretty steady.

It was not until after 1980 that the buying power of the minimum wage took a real nose-dive -- when the Republicans began to institute their "trickle-down" economic policy (a policy that tilted the economic playing field to benefit Wall Street and the corporations, while suppressing any economic benefits going to workers). While the rich got much richer due to this policy, workers began to lose buying power, thanks to inflation and wage stagnation -- and this was especially true of minimum wage workers. Currently the minimum wage has 32.6% less buying power than it did in 1968 -- the equivalent to a pay cut of a whopping 1/3 of a worker's check.

The current minimum wage in the United States looks even worse when compared to the minimum wage in other countries. The chart above is from Mother Jones, and shows the minimum wage in 26 developed nations as a percentage of the median wage in those countries. Note that the United States is on the low end of this scale -- with only the Czech Republic and Estonia have a lower minimum wage, and most countries having a significantly higher minimum wage.

The Republicans like to say they think it is better for people to work than to receive government benefits -- and Democrats agree with that. The problem is that the Republican economic policies (still in effect since they have successfully blocked all efforts to change those policies) have thrown millions of hard-working Americans into poverty. These people have jobs and work full-time, but aren't paid enough to rise above the poverty line. Sadly, the only solution to this that Republicans have is to cut taxes more for rich people and corporations.

Democrats would also like to get these hard-working Americans off government benefit rolls, but they have a much more viable solution. They want to raise the minimum wage to at least $10.10 an hour (and tie that wage to the rate of inflation so workers don't immediately start losing buying power again).

This would immediately lift millions of Americans out of poverty (and take them off the rolls of government social programs, reducing the deficit). It would also have another effect. It would boost the economy. These low-wage workers would spend that new money, creating an increased demand for goods/services. That increased demand would increase business profits and create new jobs -- both of which would again boost the economy, and put it on the road to a real recovery.

President Obama has taken the first step. In his State of the Union speech, he announced he will be issuing a presidential directive raising the minimum wage to $10.10 an hour for companies that contact to build projects for the federal government or operate businesses on federal government property. This is a good start, but it will only apply to a few hundred thousand workers. Many millions of U.S. workers will still be working full-time for a poverty level wage.

It is now time for Congress to act. Any American willing to work hard at a full-time job should be paid a wage that lifts them above the poverty level. A $10.10 an hour wage would not be an outrageously high wage for businesses to pay. It would only amount to about $21,008 a year (before taxes), which would still be less than half of the median wage in the United States.

Unfortunately, even though polls have shown most Americans support raising the minimum wage to $10.10 an hour, the congressional Republicans have indicated they will block any attempt to raise it any amount at all. In fact, many of them would like to abolish the minimum wage, and let employers pay less than the current $7.25 an hour. This is just one more reason (among many) why the Republicans must be booted out of power in the coming election.