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Joe Mallahan, Obama Delegate: My Policy Positions
High minimum wage |
I believe that a higher minimum wage, raised progressively over time, is the very best way to preserve the middle class and improve living conditions for the poor. Barack Obama has actively supported a higher minimum wage. I hope to be part of a movement that persuades President Obama to go way beyond his current vision. He should work with Congress to pass a law that would raise the minimum wage $1 each year for the next 10 years (today’s federal minimum wage stands at $6).
A higher minimum wage would put upward pressure on middle class wages. Today, over 50% of all American wage earners make less than $15 per hour. If the minimum wage were to increase over time to $15, then employers who had previously paid their workers that amount would have to increase their wages proportionally to compete with all minimum wage job opportunities. So, what is good for the minimum wage earner is good for the middle class!
A high minimum wage is also the absolute best way to aid the poor and reduce poverty in the United States. The vast majority of Americans in poverty are members of working families whose wage earners simply do not earn enough to sustain a dignified standard of living.
What about inflation? While higher wage rates would certainly impact inflation, what the average American family buys over the course of a year has only about 30% labor content. So, roughly speaking, those who benefit from an increase in wages would keep about 70% of the benefit of the increase after inflation. Ultimately, those earning more than about $150,000 per year today would incur the economic burden of increased wages of the working poor and the middle class.
What about American competitiveness? Higher American wages would, indeed, cause some loss of competitive advantage. However, competitiveness could be maintained—in fact strengthened—if America promoted an international minimum wage, pegged to each country’s per capita GDP. In fact, if Congress were to pass a law that planned to raise the minimum wage progressively over 10 years, then it would have vested the Obama Administration with tremendous moral authority to lead the world on global minimum wage. The American government could give notice to the World Trade Organization that it would withdraw in 5 years unless the WTO incorporates a minimum wage protocol. This is generally in line with Obama’s current pledge to renegotiate free trade agreements to strengthen labor and environmental requirements.
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