Stuck on $7.25

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By David Goodman
Religious Action Center RAC Blog, Jul 23 2010
This Saturday, July 24th, has a dubious distinction among those of us fighting for economic justice: it will be the first time in three years that July 24th did not signify an increase in the federal minimum wage. In June 2007, Congress approved a three-stage minimum wage increase as part of an emergency Iraq supplemental spending bill, which would see it raised to $5.85 per hour sixty days after enactment (July 24, 2007), then to $6.55 on the same date in 2008, and finally to $7.25 in 2009. Congress has not since acted on raising the minimum wage, which earns full-time workers $15,080 per year, less than theapproximately $18,000 needed to lift a family of three out of poverty

While some might say that raising the minimum wage during poor economic times will put more strain on business owners, and decrease job creation as a result, it's important to remember that the minimum wage was created during the worst economic period in our nation's history: the Great Depression. In fact, as this report from Let Justice Roll points out, "when the federal minimum wage was established in 1938, the unemployment rate was still a very high 19 percent." The report goes on to state, "Even after the increase to $7.25, the minimum wage [is] lower than the $7.93 minimum wage of 1956 and much lower than 1968's $9.92, adjusting for inflation." 

There are many benefits to raising the minimum wage. Another Let Justice Roll paper cites a study "by the Fiscal Policy Institute and others showed that states that raised their minimum wages above the federal level experienced better employment and small business trends than states that did not," while a higher minimum wage also boosts consumer spending: an Economic Policy Institute study "found that for every dollar increase in the minimum wage, families with minimum wage workers tend to increase spending by more than $800 per quarter. 

Beyond these reasons, raising the minimum wage allows us to fulfill our mandate as Jews to "not abuse a needy and destitute laborer," and provide Maimonides' highest level of tzedakah: to strengthen a person until they needs no longer fall [upon the mercy of the community] or be in need. Though there is not currently legislation in Congress that would raise the federal minimum wage, there are rumblings that such a bill will be introduced during the next Congress. In the mean time, please consider contacting your Members of Congress on other economic justice issues such as  affordable housing creation and child nutrition programs.