As of July 2009, federal law in the USA set a nation wide minimum wage at $7.25 per hour. Some states have increased that rate for their residents, with the current highest per hour minimum rate being in Washington state where workers earn no less than $9.32 per hour. Though, that is soon to be outpaced by recent increases that see Connecticut moving up to $10.10 per hour by 2017 and Washington will raise up to $15 per hour by 2021.
Here in mid-2014 though, many Americans across the nation are still earning the bare minimum of just $7.25 an hour. At a 40 hour work week, that is just $290 per week, or $1160 per month – and this BEFORE taxes! It’s hard to imagine someone being able to live on such a low wage. What’s more shocking is that an estimated 1.8 million workers claim to earn less than $7.25 per hour. Some of those are probably for jobs that earn tips, like food servers, and commission-oriented jobs. In total, at minimum and below minimum wage earners number around 3.3 million.
U. S. Senator Elizabeth Warren has publicly stated that she wants to get the hourly rate up to $22 per hour. Why this magical number? Based on the math, this is the amount she claims that wages should have risen to if they had kept up with worker productivity. Of course, the flip side to this argument is that if hourly pay rises to levels that high that it will result in a raise in prices for things like restaurant meals. Obviously, that is true but no one is forced to dine out. Take nations like Norway where hourly pay rates are high and the average cost of a fast food meal is well over $15 USD, but grocery stores have much lower prices that are more than affordable.
Last week there were protests by minimum wage workers across the U.S. in various major cities. Most of those workers were from fast food and healthcare. They are predominantly white and young. What do they want? A minimum pay of $15 per hour.
Despite some claims of the sky falling where this to happen, respected economists have claimed that adverse consequences would be minimal. Some prices would go up. So would the purchasing power of those workers, which could be a good thing for economic growth.
It is easy to see that there is a minimum wage problem in the U.S. The question though, is when will someone actually do something about it?