What’s the rush? And why do employers support a rise in the minimum wage at all? Elementary economics tells us that we are standing at a crossroads nationally. According to the Pew Research Center, the inflation-adjusted federal minimum wage peaked in 1968. Since then it has lost ground, and even since it was last raised in 2009, the federal minimum has lost about 5.8 percent of its purchasing power to inflation.
This is a disaster for low-income families, but many observers may not appreciate the damage done to businesses and to the economy. It’s really very simple; if an average person can’t afford to buy a business’s goods or services, sales will be lost. When sales are lost, jobs are not created. It’s a vicious circle that begins with the failure of our society to ensure fair compensation for a day’s work.
Contrary to popular assumptions, the average age of a minimum wage employee is 35. Only 12 percent are under the age of 20, and 28 percent have children. These citizens should be the backbone of our economy, but they have been left behind by the recovery.
At this crossroads where inequality begins to threaten the health of our economy, we have many policy choices, but the basic premise that a day’s work should pay for a day of life is one we can all agree on, and the benefits to our economy of putting more dollars in the hands of our lowest earners are enormous. Not only will more goods and services be sold, but the stress on our safety net for those currently under the poverty line will be lessened.
As the Massachusetts Retailers Association says, “few would argue against some increase in the minimum wage.” Then let’s not wait. Raising the minimum wage is good for business, good for our neighbors, and good for America.
The state Senate has passed a bill raising the minimum wage. The House should take it up and pass it immediately. By all means, let the reforms continue. But don’t make those who can’t make ends meet wait another day. The time has come.
Linda Moulton is CEO of TRU Corporation in Peabody.