Minimum Wage Increase Welcome but Not Enough – National Consumers League

By Sally Greenberg, NCL Executive Director

We would be remiss at the National Consumers League if we let go unremarked that the Federal minimum wage is set to rise to $7.25 an hour on July 24, just a day away. The federal minimum wage law was first enacted in 1938 as part of the Fair Labor Standards Act (FLSA) and was adopted as part of a sustained campaign by FDR’s Secretary of Labor, Frances Perkins, who was NCL’s New York director in the early part of the 20th century.

The women who established the NCL in the early years of the 20th century wrote the first state minimum wage laws and continued to fight for a federal minimum wage because employers could avoid higher wages by taking their businesses across state lines. While Florence Kelley, NCL’s first General Secretary, would have been proud that her legacy lives on in these federal minimum wage increases, she also likely would have been distressed at how little minimum wage workers still earn on an annual basis.

Even so, each time the minimum wage rises, the business community predicts much doom and gloom for the economy. For example, during the in 2007 debate in Congress over raising the minimum wage for the first time in 10 years, the National Restaurant Association claimed that the minimum wage increase would lead to a reduction of 146,000 jobs.

The labor-oriented Economic Policy Institute estimates that 4 percent of the work force, or 5.6 million workers, earn less than $7.25 an hour. Minimum wage workers who get the additional boost to $7.25 an hour will earn just above $15,000 yearly before taxes for a 52-week work year.

The fact is, before 2007 when minimum wages were finally increased after a decade, minimum wage levels were at their lowest real value in over 50 years. This was the longest stretch of federal inaction since the minimum wage was first instated in 1938. Finally, it was increased to $6.55 per hour in July 24, 2008; and now $7.25 per hour effective July 24, 2009.

For those workers who toil for our economy’s the lowest wages, this increase will bring some welcome additional funds to their families. However, the annual salary for minimum wage workers in America is far from a living wage, something Florence Kelley and the founders of the National Consumers League fought to achieve. We agree with Congressman George Miller (D-CA), chairman of the House Education and Labor Committee who was quoted in the Associated Press as observing:

“In the wealthiest country in the history of the world, it is an outrage that anyone who works full time would still wind up in poverty. Everyone who puts in an honest day’s work should receive a fair day’s pay.”