Obama's Minimum Wage Proposal: Why $9 Isn't Enough


Why Won't Obama Stand Up For a Real Minimum Wage?With all the debate surrounding the increase of the minimum wage, there has been little consensus about what it should be. Many fast food workers have argued for the wage to be increased to $15 an hour. Many conservatives have advocated for it to remain at the current $7.25 an hour. The key argument for raising the minimum wage has been that it is below the living wage. This is true. An employee working a minimum wage job for 42 hours a week, 50 weeks a year, would make $15,225, which is slightly above the poverty level for a family of two. Currently, over 50% of minimum wage workers work 40 hours a week for 52 weeks a year and remain below the poverty line. In addition, many of these people have more than one dependant. 

The solution seems simple. If the minimum wage is not a livable wage, tie it to what the federal government deems a livable wage. A livable wage puts a family above the poverty line. According the Federal U.S. Poverty Guidelines, the poverty line for a household of three is $19,530. The 133rd percentile (33% above the poverty line) for a household of two is $20,628, which would a put a family of three above the poverty line.

If we assume a proper living wage wage should be $20,628, we can easily compute the minimum wage. Assuming a worker works 42 hours a week, for 50.5 weeks a year, the wage he should be earning is $9.70 an hour (rounded to the nearest nickel). This is enough to make a difference in the lives of these workers, but not enough to significantly impact the cost of the goods and consumer spending. The other benefit of this model is that the minimum wage debate would not take place every five years. Instead it would simply change every year as the poverty line is reevaluated. It is logical to raise the minimum wage to $9.70.

If the United States wishes to remain a land of opportunity, the minimum wage must meet the livable wage. The idea that anyone can accomplish anything is only true when individuals can get a foothold before climbing the ladder. Our society is filled with inequalities, and increasing the minimum wage is the most important step to tackling society's greatest problems. The last time the minimum was raised, it went from $5.50 to $7.25, an increase of $1.75. This time it needs to be greater because the inequality in our nation is much more prevalent. Under this formula, a family with two working adults and two children would have an annual income of $41,256, putting them at 75% above the poverty line for a family of four. 

Raising the minimum wage to $9.70 would give minimum wage earners more disposable income, and would hopefully further aid economic recovery. It would not be enough to cause massive drops in consumer spending, as prices would not rise dramatically. An increase in the minimum wage is necessary, and $9.70, sure seems like a good number.