23 Rich Countries Have a Higher Minimum Wage Than the U.S.
The news: Tuesday's State of the Union will come with a major announcement: President Barack Obama is expected to say that he will raise the minimum wage for federal contractors to $10.10 an hour from $7.25, via an executive action.
The raise would affect some 2 million federal employees and come as a clear signal to Congress that the president is serious about pushing a progressive proposal to raise the federal minimum wage for all workers to that level over the next three years, then indexing it to inflation.
How bad is the minimum wage situation in the United States? Well, pretty bad. Courtesy of Mother Jones and the OECD, here's how the U.S. ranks up to other rich countries as far as inequality is concerned:
We're not quite dead last, but we're only about .02% off.
Today's minimum wage, adjusted for inflation, is lower than it was in 1956.
How much would the raise affect Americans? It would make the U.S. have the fourth-highest minimum wage in the world, assuming that other countries' wages remain constant.
If Congress increases the minimum wage to $10.10 — a move virtually guaranteed not to happen — the federal minimum wage would increase for some 17 million employees (unless their positions were eliminated), and some 11 million would benefit indirectly as wage ladders were adjusted, says the Economic Policy Institute. That's in the neighborhood of 17.6% of the total workforce.
How big a step is it? Obama's planned increase would only apply to future federal contractors, not current ones, which is a resounding disappointment for many. And it doesn't affect direct federal employees.
Liberal groups have criticized the move as much more limited than they would hope.
"This action, while a step forward, suggests he may still be unwilling to take the fighting stance necessary to deliver the big wins over growing inequality that our country desperately needs," says Jim Dean, the chair of Democracy for America.
And according to J. David Cox Sr., the national president of the American Federation of Government Employees, "If the president is to have any credibility in talking about living wages, he needs to get his own house in order first and do everything in his power to establish $10.10 as the minimum wage for all federal hourly workers."
Still, it's the first sign that for once, someone in power is taking income inequality seriously and working to raise the living standards of all Americans, not just a wealthy few.