By MORRIS PEARL
This New Year’s, 24 states rang in the new decade by increasing their minimum wage, giving their most vulnerable workers a well-needed pay raise. While we can and should celebrate these gains, it’s important to note that the federal minimum wage still remains a measly $7.25 an hour, a rate that hasn’t changed since 2009. Millions of Americans still attempt to make this poverty wage work with a continuously rising cost of living, and are constantly fiscally insecure as a result. It’s high time that Congress steps in and gives all American workers the raise they deserve.
In the past decade, we’ve seen dramatic changes in the way the economy functions for the average individual, so it’s delusional to think that workers can survive on a wage created for the minimum requirements of living 11 years ago. When you consider that there is nowhere in the United States where a person earning the federal minimum wage can afford a two-bedroom apartment, it’s negligent that Congress continues to let Americans fall into economic insecurity.
With inflation alone, today’s minimum wage is worth 15 percent less than it was in 2009. That means that employees have to work more hours – or get a second job – just to meet the bare living standards of a decade ago. The minimum wage was designed to ensure that the low-income employees would make enough to get by, but with a stagnant wage and increasing inflation it’s no longer delivering the sense of safety it was designed for.
Lawmakers and business leaders have long harped on about the dangers of raising the minimum wage, citing the economic destruction that would befall our country. Yet here we are, another year later, with another round of wage increases across the nation, and somehow small businesses still exist and restaurants still turn out orders.
That’s because states like California, Washington, Arizona, and New York have all shown the success that comes from substantially increasing the minimum wage above $7.25 an hour. Moreover, studies have shown that increasing the minimum wage boosts job growth for small business and retail and does not impact employment at all.
To put it plainly, raising the minimum wage is one the simplest ways of bolstering our economy. Our economic system is driven by consumers, so when someone buys a cart full of groceries or enjoys a night out with their friends, they invest in their local economy and we all benefit.
Despite what you may have heard, wealthy folks like me aren’t the kind of consumers that drive our economy – we invest our excess money in portfolios and savings accounts. Sure, we also buy groceries and the occasional high-priced item, but we actually make up a small handful of the spending when compared to the rest of the country. Increasing wages puts money directly back into the hands of those who need it the most, and those who make up the backbone of our economy. An economy where more people are spending benefits everyone, not just the wealthy folks.
The clock is ticking, and everyday working Americans are working harder and falling further behind. Raising the wage not only improves the lives of those who receive it, but it helps our economy as a whole.
This New Year, it’s time for the Senate to step up and pass the 2019 Raise the Wage Act legislation that’s currently sitting dormant on Senate Leader Mitch McConnell’s desk, and we also need to bump up the wages in the remaining states that have not taken action. If for one reason and one reason alone, Congress must listen: no working American should ever be living in poverty.
Morris Pearl is a former managing director at BlackRock, Inc. and Chair of the Patriotic Millionaires, a coalition of high-net worth Americans concerned about the destabilizing concentration of wealth and power in the U.S.