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The Minimum Wage–And Why the Recovery is Not Coming

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Today, the minimum wage rises to $7.25 an hour. We should all be glad that millions of people are going to get a bit more money in their pockets. But, this hike masks a very grim fact: the “recovery” is not going to happen anytime soon, if the measure we use for “recovery” is that working Americans are going to find meaningful, full-time, decently-paid employment.

A few weeks ago, I wrote about the scandal of the minimum wage–a level of income that at the grand sum of the new $7.25 per hour, if you worked every single week, every day, you would earn $14,645 a year–with likely no health care, no retirement, no vacation days, no sick days. By comparison, the federal POVERTY LEVEL for a family of three is $17,600–a number that is outdated because it doesn’t take into account the real cost of living. But, even that number is higher than what a person would earn at the new minimum wage.

So, the truth is that by feeling good about the new minimum wage, we are quietly accepting the fact that millions of people will continue to work as slaves–laboring at sub-standard wages. In New York State, the minimum wage hike will do very little for workers because the state minimum wage is already $7.15 and, as the Fiscal Policy Institute points out,”New York’s minimum wage will still be more than 21 percent below its peak value in 1970, which was $9.23 in today’s dollars. The 10 cents an hour increase for New York’s minimum wage workers amounts to only a 1.4 percent raise, well below the 4 percent general rate of inflation since January 2007 and even further below the nearly 7 percent inflation rise in the New York City metropolitan area.”

Remember that fact and, then, take into account what we now face in America: an effective unemployment and underemployment rate of more than 16 percent.

Yes, 16 percent. Not the 9.5 percent that the we mostly hear about. The typical number the media reports–the Labor Department’s U-3 rate–excludes people who have given up looking for work and people who only have part-time work because they can’t find full-time work (part-time workers are counted as “employed” even if they only work ONE HOUR A WEEK).

And, thanks to the glories of the “flexible” free-market, the economy we now live in has forced more people into part-time work–because that allows companies to hire and fire people without having to assume all those annoying things like health care and pensions for the workers.

16 percent of our fellow citizens do not have full-time, decent paying work. And that does not count those people working full-time for the minimum wage–who end up in poverty.

This is a national crisis and a national scandal. It is what I call The Audacity of Greed (and, in a quick shameless bit of promotion, the title of my new book just about out–feel free to join the Facebook Fan page)

So, when we hear the discussions about “recovery”, my reaction is this: until we know that we have returned to the concept of FULL EMPLOYMENT in the country (which no one seems to talk about) and until we begin to see people working for above-poverty level wages and until people can join unions in large numbers so they can have some power in the marketplace (not just to raise wages and benefits but to have dignity and respect on the job), there will be no recovery.

Why are we not marching, by the millions, to protest what is effectively the robbing of working Americans?

Jonathan Tasini: Jonathan Tasini is the executive director of Labor Research Association. Tasini ran for the Democratic nomination for the U.S. Senate in New York. For the past 25 years, Jonathan has been a union leader and organizer, a social activist, and a commentator and writer on work, labor and the economy. From 1990 to April 2003, he served as president of the National Writers Union (United Auto Workers Local 1981).He was the lead plaintiff in Tasini vs. The New York Times, the landmark electronic rights case that took on the corporate media’s assault on the rights of thousands of freelance authors.

This article originally appeared on Working Life on July 24, 2009 and is reprinted here with permission from the author.


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