As we approach tax time again, we all would feel much better about this process if we thought everyone would be paying their fair share. Not happening.
While the more equitable distribution of tax rates certainly is a debatable issue, it does not seem reasonable to me that taxpayers should feed the profit margins of Walmart and other large corporations that do not pay their workers enough to avoid having to apply for and going on food stamps, Medicaid and other public aid. Walmart made $17 billion in profits last year. Why should we subsidize Walmart by filling the gaps their pay scale leaves to taxpayers?
Misguided politicians, including Pennsylvania’s Pat Toomey, have argued that such a move by large employers would cut down the number of people they hire in order to make up the difference. Although intuitively attractive, this assumption is just that, only an assumption. The Institute for Research and Employment at UC Berkeley has found that there is no difference in employment in counties with higher minimum wage than their neighbors.
Studies have also shown that if the minimum wage is equal to or less than the median hourly wage, it will not cost jobs. This means that if as former Admiral and Congressman Joe Sestak has proposed, we raise the minimum wage to $10.60 an hour now, this increase would be half of the current national average of $21.19 and would not harm our economy. This has been proven by comparisons between employment figures for businesses in New Jersey, which raised the minimum wage, and Pennsylvania, which did not.
Moreover, there is less retraining of workers caused by high job turnover due to excessively low wages. Furthermore, workers who will be getting this higher minimum wage have some real pent-up consumer needs, so they will immediately spend more on them, thus investing in the local economy instead of the other way around.
Tying the minimum wage to the current national average wage now, as Admiral Sestak has suggested, allows the minimum wage to keep pace with the economy and accounts for inflation. This proposal is superior to suggestions from other Democrats, who suggest phasing in a wage increase over several years up to an arbitrary figure that’s not tied to inflation.
Why act on this issue now? More than two thirds of those receiving the current minimum wage are adults, of whom one quarter have children. Many are people of color. Just under two thirds of these adults are women. These workers will invest in our futures by having more resources to take are of their children.
Finally, having a more reasonable minimum wage raises the pay for those at the bottom rung of the labor market and establishes a wage floor relative to the median wage. This is a win-win situation for everyone. Why wait five years or even another year?
The median level of family income since 1999 has declined by $4,000. It is high time that we all get a break.
