Congress has never let the federal minimum wage erode for this long

David Cooper

David Cooper Senior Economic Analyst, EPI

June 16 marks the longest period in history without an increase in the federal minimum wage. The last time Congress passed an increase was in May 2007, when it legislated that the minimum wage be raised to $7.25 per hour on July 24, 2009. Since the minimum wage was first established in 1938, Congress has never let it go unchanged for so long.

When the minimum wage remains unchanged for any length of time, inflation erodes its buying power. As shown in the graphic, when the minimum wage was last raised to $7.25 in July 2009, it had a purchasing power equivalent to $8.70 in today’s dollars. Over the last 10 years, as the minimum wage has remained at $7.25, its purchasing power has declined by 17 percent. For a full-time, year-round minimum wage worker, this represents a loss of over $3,000 in annual earnings. Moreover, since its historical peak in February 1968, the federal minimum wage has lost 31 percent in purchasing power—meaning that full-time, year-round minimum wage workers today have annual earnings worth $6,800 less than what their counterparts earned five decades ago.

A simple way to fix this problem once and for all would be to adopt automatic annual minimum wage adjustment (or “indexing”), as 18 states and the District of Columbia have done. The Raise the Wage Act of 2019 would raise the federal minimum wage to $15 by 2024—boosting wages for nearly 40 million U.S. workers—and establish automatic annual adjustment of the federal minimum wage. Automatic annual adjustment would ensure that the paychecks of the country’s lowest-paid workers are never again left to erode.

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Reposted from EPI

Posted In: Allied Approaches

Union Matters

Steel for Wind Power

From the USW

From tumbledown bridges to decrepit roads and failing water systems, crumbling infrastructure undermines America’s safety and prosperity. In coming weeks, Union Matters will delve into this neglect and the urgent need for a rebuilding campaign that creates jobs, fuels economic growth and revitalizes communities. 

Siemens Gamesa last month laid off 130 workers at its turbine blade manufacturing plant in Iowa, just months after GE Renewable Energy decided to close an Arkansas factory and eliminate 470 jobs.

The companies reported shrinking demand for their products, even though U.S. consumption of wind energy increases every year.

America’s prosperity depends not only on harnessing this crucial energy source but also ensuring that highly skilled U.S. workers build the components with the cleanest technology available.

Right now, the nation relies on imported steel and turbine components from foreign manufacturers like China while America’s own steel industry—well equipped for this production—struggles because of dumping and other unfair trade practices.

Steel makes up the bulk of turbine hubs and the wind towers themselves. It’s also used to make the cranes and platforms necessary for installing the towers.

Yet the potential boon to America’s steel industry is just one reason to ramp up domestic production of wind energy infrastructure.

American steel production ranks among the cleanest in the world, while China has the highest carbon emissions of any steelmaking nation and flouts environmental regulations.

The nation’s highly-skilled steelmaking workforce must play an essential role in the deeply-needed revitalization and modernization of the nation’s failing infrastructure. Producing the components for harnessing wind energy domestically and cleanly is an important step that will put Americans to work and position the United States to be world leaders in this growing industry.

 

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There is Dignity in All Work

There is Dignity in All Work