Building an Economy that Works for Everyone

Helping our low-income workers keep up

Marilyn Watkins, EOI Policy Director

From the Everett Herald:

By Christine L. Owens and Marilyn Watkins

In 1998, an overwhelming two-thirds of Washington voters supported a ballot initiative to raise the minimum wage and adjust it upward each year to keep pace with the rising cost of living. As a result, there’s a bright spot on the horizon for Washington’s lowest-paid workers: On Jan. 1, Washington’s minimum wage will increase by 37 cents to $9.04, the best in the nation.

The initiative sets the floor for all workers, and enables low-wage workers to maintain their purchasing power in good times and bad. It is particularly important in this recession, as people have lost jobs and bargaining power for their wages. Without the minimum wage floor, workers’ wages could be pushed even lower, and that would only deepen this recession into a true depression.

That increase not only helps hard-working Washingtonians provide for their families, but also boosts the overall economy. When Franklin Roosevelt first established the federal minimum wage during the Great Depression in 1938, he emphasized that a strong wage floor is “an essential part of economic recovery.” The same is true today.

When low-wage workers have more money in their pockets, they spend it immediately on basic necessities like groceries, clothing and school supplies. And as demand for goods and services grows, businesses expand and hire.

The resulting increase in spending from minimum wage bumps in Washington and seven other states on Jan. 1 will lead to an additional $366 million in economic output and create the equivalent of more than 3,000 jobs, according to an analysis by the Economic Policy Institute. That’s a shot in the arm our economy desperately needs.

Thanks to forward-thinking minimum wage policy, our neighbors who do the hard work of cleaning and securing office buildings, providing day care and serving food will not fall further behind as prices for food, gas and utilities continue to rise.

The minimum wage increase is especially important when so many better-paying jobs in sectors like construction, manufacturing and finance have disappeared, and many families are left supporting themselves with lower-paid service-sector jobs. An analysis by the National Employment Law Project finds that while the majority of jobs lost during and after the recession were in mid-wage occupations, roughly three-quarters of the jobs added since job growth resumed are in low-wage occupations.

And things aren’t going to improve any time soon: In a recent analysis, the Seattle-based Economic Opportunity Institute reported, “Of the top twenty occupations expected to have the greatest increases in employment between 2008 and 2012, more than half are low-wage positions.”

While we know our economy will have an increasing number of positions in home health care, food preparation and customer service, these jobs don’t have to pay poverty wages. At one time, the manufacturing jobs that we now yearn for were dangerous, low-wage and undesirable. But we turned them into good jobs, with safer work places, higher pay and a voice for workers.

Washington and seven other states have taken a step in the right direction by indexing the minimum wage to keep up with inflation. But while more than 1.4 million workers will see their wages increase Jan. 1, millions more must depend on the stagnant federal minimum wage of just $7.25, or $15,000 a year for full-time work.

The American people know this isn’t right: A national poll conducted in November found that more than two-thirds of Americans support raising the minimum wage to $10 an hour. It’s a deeply popular idea that can help boost the economy while not adding to state or federal budget deficits.

It’s time for politicians in Washington, D.C., to take a cue from the people of Washington state and index and raise the minimum wage.

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