Take a Stand: Minimum wage is too low
The April 1 Journal-World carried a column by Kansas University business professor Mark Hirschey called “Inconvenient truth about minimum wage.” Since it was April Fools’ Day and the article gave many anecdotes but few “facts,” we’re not certain it was altogether serious. In case it was, we’re responding with some facts of our own.
Henry Ford had the novel idea that anyone building his cars should be able to afford to buy one. But most employers never bought this idea, and the period after Ford’s death was wracked by some of the worst labor strife in our history. Since those early days, every time a minimum wage has been implemented or increased, businessmen have screamed that the sky was falling. But the sky hasn’t fallen.
Here are 10 historical facts about minimum wages:
1. We had no minimum wage law until the Fair Labor Standards Act passed in 1938.
2. Since then, in terms of actual buying power, the value of the minimum wage peaked in 1968 – when it was just $1.58 per hour! Last year, according to the U.S. census, an equivalent minimum wage, in constant dollars, would have been $9.47.
3. Thanks in part to the minimum wage law, the American working class turned into a giant “middle class.” For many years, this middle class enjoyed relative prosperity and could afford to buy products from the very businesses that had worried so much about minimum wage laws – and which now profited from them!
4. Minimum wage laws don’t cause job loss. More than half the states have minimum wage rates that exceed the federal level, and none have suffered job loss as a result.
5. The growth in productivity of American workers has always outstripped any increases in wages and benefits.
6. Corporate earnings and profits have soared during the minimum wage era. Over 10-year, 25-year, and 50-year periods, the best place to invest has been the stock market. Minimum wages clearly do not hold back corporate growth and profits.
7. Over the same period, pay for corporate CEOs has soared to obscene levels – nearly 500 times the average wage – even when companies they “led” fell into bankruptcy.
8. The economic expansion that ended a few months ago was the first in our history that saw an actual decline in median income. Workers are suffering!
9. The Kansas minimum wage is $2.65 for firms not covered by the federal law. That means that today 17,000 Kansans earn less than the federal minimum wage! Does that mean that our state legislature wants workers who are employed full-time to earn under half of what it would take to rise to the federal poverty line?
10. In economic development, Kansas ranks near the bottom. States with much higher state minimum wages have zoomed past us in terms of economic growth. Our lowest-in-the-nation minimum wage law is a joke – but sadly, the joke is on us.
These are the actual facts about minimum and maximum wages.
Hirschey reminisced about the great low-wage jobs he held as a kid. State law now prohibits kids from working in many of those jobs – but, ironically, allows parents who are trying to raise kids to work the same kinds of jobs, for pennies.
Arguments against making the minimum wage a living wage are based on the faulty claim that it will hurt corporate profits and result in higher unemployment. But history shows that dividing the pie more equitably will neither bankrupt corporations nor cost us jobs. It will, rather, improve life for all employees and their families.