It has been over 75 years since President Franklin D. Roosevelt made the minimum wage a reality by signing into law the Fair Labor Standards Act of 1938. The Act was created to both protect workers and stimulate economic recovery in the aftermath of the Great Depression. It achieved both.
Yet, even after all this time, the minimum wage is hotly contested among political parties, the courts, businesses and the public. Conservatives argue that the current federal minimum wage of $7.25 is a respectable hourly wage for so-called low-skilled workers, while progressives—us included—say that the current minimum wage is way too low and keeps hardworking people in poverty.
This is a fact: Adjusted for inflation, the minimum wage today is lower than it was in 1968. Today people working full time and earning minimum wage actually live below the federal poverty line.
In California, a mother of two earns $16,640 per year by earning a minimum wage, but the federal poverty level for a family of three is $19,790. That means that she’s earning $3,000 less than what the federal government officially calls poverty.
Window of opportunity
We have a window of opportunity to increase the minimum wage in California. Recently, President Obama signed an executive order to raise the minimum wage for federal workers to $10.10. Many states and cities have already taken it upon themselves to raise the minimum wage for their residents. And starting July 1, 2014, California’s minimum wage, which at $8/hour is already higher than the federal minimum wage, will increase to $9/hour and then on January 2016, it will become $10/hour.
So why did we sponsor a bill, SB 935 (Leno), which aims to raise the minimum wage in California to $13/hour? Isn’t $9/hour enough?
According to the Supplemental Poverty Measure, California has the highest poverty rate in the nation—in 2013, 23.8% of Californians lived below the poverty line. One in four children lived in poverty and one in three single moms was poor.
We thought that the Senate Bill 935 was a step toward providing wages that people could actually survive on and use to pull themselves out of poverty. It aimed to raise the minimum wage in three steps, first bumping the minimum wage to $11 an hour in 2015 and then increasing it an additional $1 per hour in both 2016 and 2017.
However, the truly trailblazing part of this bill was its proposal to index the minimum wage to inflation starting 2018. Without adjustments for inflation, the purchasing power of wages is eroded every year. So for example, because of inflation, a $10/hour minimum wage today will only be worth $9.32 in 2016. To combat wage erosion, starting in 2018, SB 935 would have adjusted the minimum wage annually to match the rate of inflation.
Better wages benefit everyone
The truth is, better wages benefit everyone. With higher pay, workers who would normally succumb to the challenges of transportation, childcare, and health, are less inclined to leave their jobs. This minimizes turnover, thus increasing job stability for employees and reducing costs for employers.
Researchers have also found that increased wages would reduce poverty rates by bringing peoples’ annual incomes above the poverty line, decrease dependency on public assistance programs such as the Supplemental Nutrition Assistance Program (SNAP), and stimulate the economy by increasing the money minimum wage workers will be able to spend in the economy and pay in taxes. No one is left out of the positive outcomes.
This is not about chasing unrealistic dreams. It’s about providing basic human necessities to some of our nation’s most vulnerable populations. The ripple effect of raising the minimum wage goes beyond individuals and families. It benefits our state—in real dollars and cents, and it’s the right thing to do.
UPDATE—July 1, 2014: On Wednesday, June 25, 2014, Senator Mark Leno’s bill that aimed to increase the California minimum wage to $13/hour by 2017 and thereafter index the minimum wage to inflation (SB 935), died in Assembly Committee on Labor and Employment.
We sponsored this trailblazing bill along with SEIU California State Council and on Wednesday Judy Patrick was in Sacramento to testify on its behalf. The final decision was both shocking and disheartening because, had it passed and been signed into law, this bill could have pulled hundreds of thousands of Californians out of poverty.
Prior to the committee hearing we partnered with Sylvia Allegretto at UC Berkeley’s Institute on Research and Labor to produce a report titled: Ten Dollars or Thirteen Dollars? This timely report will help you understand why the $13/hour minimum wage is so important. We also organized a letter writing campaign. In less than one week, 1,500 people sent a letter to the seven members of the committee, urging them to support this anti-poverty bill. Our friends at momsrising.org also asked their California members to send letters and 1,700 people responded.
Though SB 935 did not pass this year, we will not give up. We’ll be back next year, stronger, more organized and more committed than ever. Because nobody who works hard should have to live in poverty.