Roosevelt's words on what working people deserve captures our serious concern about the need to achieve a living wage for all workers. Roosevelt declared "No business which depends for existence on paying less than living wages to its workers has any right to continue in this country" Instead, the business community continues to pay as little as it can get away with, which is why the federal government and most states have enacted minimum wage laws. However, the tragedy is that minimum wage jobs pay only a poverty wage. As the New York Times reported, in the late 1960s a full time job at the federal minimum wage could almost lift a family of four above the official poverty level. Currently, the same family of four that depends on a minimum wage workers would be about 40 percent below the poverty line.
Many have the impression that teenagers hold a substantial proportion of minimum wage jobs. However, the abysmal state of the economy is compelling more and more adults to accept low wage jobs. As a result, only 12 percent of minimum wage jobs are held by teenagers. Also significant, but often neglected, the low paying minimum wage jobs are serving as a lid on wages for the millions of workers who earn just above the minimum wage level.
Not only do federal and state minimum wage laws continue to perpetuate poverty. To make matters worse, due to inflation the spending capacity of low paid workers grows smaller and smaller every year. The same can be said for millions of workers who earn just above the minimum wage level and whose wages are in tandem with minimum wage workers. For minimum wage workers, their real income in the last 45 years has declined by over $3.50 an hour. It should be no surprise, then, that the trillions of dollars lost in spending power has contributed considerably to precipitating our economic crisis.
What must be done, then, is not only enacting laws that provide a much higher floor than current laws do. Minimum wage laws MUST include annual cost of living adjustments. Although any increase in the minimum wage will improve wages in the short run, without a cost of living adjustment (COLA), the purchasing power of the minimum wage in the long run will continually decline. That is why Social Security is adjusted annually, although it certainly underestimates the extent of inflation.
But almost all state legislatures that are willing to increase the minimum wage are opposed to providing a cost of living increase. Unfortunately, California is among those states. Eleven states do include a COLA, but in ten of these states it was passed by public ballot. Only in Vermont was a COLA enacted by the State Legislature. Clearly, the voting public is much more progressive than those it elects!
Is there any other route to raise wages? Best of all would be high union density, which would give organized labor a lot more muscle. In Sweden, for example, there is no minimum wage law. But 70 percent of Swedish workers are members of unions that ensure a high standard of living. In the United States, less than 7 percent of private sector workers in the United Sates who are unionized.
I think we know what to do. Unless there is a dramatic change in the culture of legislative bodies, the track record so far suggests that referendum is our best option. The ballot measure in the city of SeaTac, Washington raised the minimum wage from $.9.19 to $15 an hour for hospitality and transportation workers in and near the Seattle-Tacoma International Airport. For full time workers, their wages will be 133% percent higher than the official poverty line for a family of four. We should be encouraged that despite enormous business opposition a minimum wage that provides a living wage can be achieved.
The Berkeley City Council will shortly be considering an increase in the minimum wage. Please contact your council representative to urge that he or she support a living wage that includes a cost of living adjustment.