$9.50 vs. $7.75: Looking Past the Numbers.

At the end of the 2013 legislative session, Governor Mark Dayton, Speaker of the House Paul Thissen, and Senate Majority Leader Tom Bakk agreed on one thing: they will need to take up the minimum wage again in 2014 session.  Beyond that: they have differences.  The Governor has indicated he “would settle” for an increase to $9.50/hr.  The House has passed a bill that would raise it to $9.50/hr by 2015.  The Senate’s bill raises it to only $7.75/hr.

Before the next legislative session begins on February 25, 2014 you can expect to hear a lot more about these dollar figures (as well as the rest of the minimum wage improvements being proposed.)  As you do, it’s important to place them in some context.  How high is too high?  How low is too low?  What do people need to make per hour in order to just get by?  Here is a simple guide to the minimum wage dollar figure debate:

$28.34: This is what the minimum wage would be had it grown at the same rate as the income as the top 1% since 1968 (the year in which the federal minimum wage was at its highest).

$18.72: This is what the minimum wage would be had it grown with the productivity of the U.S. economy since 1968.

$18.39: This is the wage a full-time worker needs to earn to support a family of four in Minnesota.

$14.03: This is the wage two full-time workers need to earn to support a family of four in in Minnesota.

$10.70: This is what the minimum wage would be had it grown with inflation since 1968.

$10.60: This is the wage needed for to keep a family of four above the federal poverty line.

$9.50: This is the wage increase being proposed by the Minnesota House and supported by Governor Mark Dayton.

$7.75: This is the wage increase being proposed by the Minnesota Senate.

$7.25: This is the current federal minimum wage.

Numbers can help clarify the debate.  Unfortunately, at times, they distract from it.  If we treat $9.50 vs. $7.75 like a political horse race, we will miss an opportunity.  The real debate about the minimum wage is a debate about the future of Minnesota’s economy: is it in Minnesota’s best interest to continue building an economy that depends on extracting value from the lowest paid workers in our state?

We already ask the lowest income Minnesotans to pay a larger share of their income in taxes than anyone else. With a sub-par minimum wage we are also demanding they donate an increasing share of the value of their work to pad profits for business and lower prices for everyone else.

Further, even raising the minimum wage to $9.50 an hour falls short of what workers really need.  After all, if you’re working two or three part-time jobs you’re still struggling.  If you make $9.50 an hour but have no access to a retirement plan, you will fall behind.  A law requiring a $9.50 hourly wage is no guarantee that you will get paid on time, get sick days, be paid for time off, or, even, just be treated with respect.

— Chris