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Minimum Wage Battle Heats Up

Stacy M. Brown | 3/27/2013, 11:46 a.m.

Women of color are disproportionately represented among female minimum wage workers, with more than 15 percent of those earning less than the minimum wage, based on the study.

"From a moral perspective, I think we have an obligation to pay what is a fair wage and not just pay a low wage because you can," said Rep. Marcia Fudge (D-Ohio), chair of the Congressional Black Caucus. "When you look at the pay of CEOs, that has gone up significantly, and when you look at the average working person, salaries have basically decreased. Where is the fundamental fairness in this? They are getting rich off the backs of people they don't care are the working poor," Fudge said.

Obama has said a minimum wage increase would stimulate consumer demand and help drive economic growth. The federal minimum wage has lost 30 percent of its purchasing power in recent decades, based on a study conducted by the National Employment Law Project in New York.

If wages had kept pace with the cost of living since 1968, the minimum wage would now be $10.56 an hour, but Obama said raising the wage to $9 would restore its inflation-adjusted value to where it was in 1981, when President Ronald Reagan took office.

However, raising the rate would result in an increase in labor costs in an economy still hovering just above recession levels, said Peter Roff, a political writer for U.S. News & World Report and a member of the public policy organization, Let Freedom Ring.

"Higher labor costs mean fewer people get hired," Roff said. "Employers have to find ways to do more with less and look for other ways to economize. Unskilled workers get laid off, replaced by machines and higher-skilled workers who are more valuable."

Everyone would benefit from a raise in the minimum wage.

"It would have an enormous impact on workers, many of whom are forced to string together two or three jobs to barely afford the necessities of life," said Mary Kay Henry, president of the SEIU, which represents more than 2.1 million workers.