Raising the federal minimum wage isn’t just the right thing to do for workers—it’s also good for the economy

David Cooper

David Cooper Senior Economic Analyst, EPI

Raising the federal minimum wage, which has now lapsed for the longest ever period without an increase, will benefit millions of low income workers and lift more than one million Americans out of poverty.

There is widespread agreement in the economics profession these days that, in contrast to outdated textbook theories, higher minimum wages have done exactly what they’re supposed to do: raise pay for low-wage workers with little, if any, effect on employment.

That’s why it was surprising to see Mitch Albom, a millionaire fiction author and sports columnist, argue so vocally and misguidedly against the prospect of an increase in a recent opinion piece in the Detroit Free Press.

The Raise the Wage Act, which boosts the minimum wage from the current paltry $7.25 per hour to $15 an hour by 2025, has passed the House of Representatives, but Senate Majority Leader Mitch McConnell refuses to even bring it up for a vote in the Senate.

Disappointingly, Albom repeats a lot of conservative tropes that have little foundation in evidence or data.

Let’s start with his premise: Albom takes Michigan Congresswoman Rashida Tlaib to task for proposing that the minimum wage should actually be raised to $20.

“While raising people out of poverty should be a top priority, getting folks excited about a $20-an-hour minimum wage is not only irresponsible, it’s not well thought out,” Albom writes.

“You can force businesses to raise wages, but you can’t force them to keep workers. And study after study, expert after expert, shows that, eventually, the higher the wages demanded, the fewer positions there will be.”

Non-fiction literature

The problem is both these statements are factually incorrect. A $15 minimum wage is ambitious only because of how long lawmakers have let the federal minimum wage stagnate at unlivable levels. Had the federal minimum wage been raised since the 1960s at the pace of rising labor productivity, it would be over $20 an hour today.

Raising the minimum wage to more livable levels is enormously important to the health of an economy that relies on consumer spending for two-thirds of its strength. It is also a modest but important step in narrowing shamefully large gaps in wages and income between rich and poor Americans.

What’s more, Representative Tlaib is right that $15 is just a bare minimum. A full-time earner at $15 an hour makes $31,000 a year—not nearly enough to afford a secure standard of living in any region of the country, but especially not in a large metropolitan area like Detroit.

As for “study after study, expert after expert,” Albom does not appear to have kept up with the academic literature. Both the average study and the most sophisticated peer-reviewed studies find little to no impact on jobs from higher minimum wages. Even the Congressional Budget Office report he cites is misinterpreted.

What the CBO actually found was that CBO that $15 by 2025 would raise the wages of up to 27.3 million low-wage workers, would increase by $21.9 billion the income of families who earn below three times the poverty rate, and would reduce the number of people living in poverty by 1.3 million, nearly half of them ages 0–18.

Which brings us to the opening of Albom’s column, where he glibly likens Tlaib’s comments on the minimum wage to Herbert Hoover’s famed “chicken in every pot” promise. “A year later, we had a Great Depression,” Albom writes, hyperbolically.

That’s not quite how it went down. But without needing to dig back into 1930s history, it’s a poor—and ironic—comparison for Albom to make. Hoover was a laissez faire conservative whose faith in markets over government regulation (such as a fair minimum wage) came tumbling down on his legacy.

Tlaib’s policy stance is much more akin to that of Hoover’s successor, Franklin Delano Roosevelt. She clearly understands that making the economy work for working people, rather than just allowing wealth and privilege to accumulate at the very top of the income scale, is not only the right thing to do but also the best thing for the American economy.

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Reposted from EPI

Posted In: Allied Approaches

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

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