Raising the minimum wage is something that should have been done years ago. The price of living seems to keep going up, while the minimum price that employees can be paid stays the same. This keeps people that are in the middle and lower class, struggling.
The federal minimum wage has been $7.25 since 2009. In 2018, there was talk of raising the minimum wage to $10 which was supposed to increase to $15 by 2022, but it was never set in stone. According to the Bureau of Labor Statistics, inflation has gone up 38.05% since 2009. Today's prices are 1.36 times higher than they were 13 years ago, and yet people's income stays the same.
In a one-income household, working a full-time job of 40 hours a week and getting minimum wage would average out at $15,000 per year. The average cost of living in Indiana in 2022, is $38,097 per year. Making only the minimum wage would not be nearly enough to have a stable life. It may have been more manageable in 2009, but over the years prices only rose and in today's society it’s not realistic.
Because the minimum wage is so low, it causes a loss in competitiveness, and higher unemployment rates, and leaves people struggling. It contributes to higher poverty rates and impacts the overall well-being of low-wage workers.
The minimum wage does a lousy job of targeting low-wage families. Minimum wage laws only mandate high wages for low-income workers rather than higher earrings for low-income families and their dependents.
According to a report by the Congressional Budget Office, raising the minimum wage to $15 an hour by 2025 would lift 1.3 million families out of poverty. Even in a difficult economy, studies show that increasing the minimum wage would not damage job growth. It would only increase employment and consumer spending, which would all stimulate the economy.
A policy needs to be put into place that will target full employment, with wage growth that matches productivity gains. Deciding to raise interest rates is essentially slowing the economy, weakening jobs, and weakening wage growth. To get full employment for everyone, we will need to adapt programs that can direct jobs to high-unemployment areas.
If we were to undertake a program consisting of public investment, like putting out more money for public transportation and making jobs more accessible, we can create more jobs and raise productivity. A program like this would be effective even if we borrowed money to finance it. But as we approach full employment, we would increase revenues to cover the costs.
More ways that would help raise America's pay while also benefiting society and the economy as a whole would be reducing our trade deficit, having corporate tax reform, and cutting taxes.
Wage suppression stems from intentional policy and program choices, It can be reversed by changing these policies and implementing up-to-date ones. To boost wages and stimulate the slowing economy, policymakers must intentionally tilt bargaining power back toward middle and lower-class workers.
Wage stagnation is not inevitable, it is the result of policy choices on behalf of those with the most power and wealth who choose to keep suppressing wage growth. Wage stagnation was caused by policy, and needs to be alleviated by the policy. Policymakers should incorporate policies that update overtime rules, strengthen rights to collective bargaining, regularize undocumented workers, end forced arbitration, secure workers' access to paid sick and family leave, close race and gender inequalities, and do so much more.