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Commentary :: Labor : Organizing : Politics
Minimum Wage Hikes
11 Feb 2014
Reposted from Cradle of Liberty

During the 2014 State of the Union address, President Obama expressed his intent to sign an executive order that would raise the minimum wage for new federal contract workers to $10.10 an hour. Though some very vocal pundits and politicians were outraged by the president’s decision to bypass the legislative branch to enact a wage hike, the executive order he wrote is limited to new contracts starting in 2015 and does not apply to contract renewals unless there are significant changes to the terms of the contract, such as the number of employees or type of work involved. The budget for federal contracts shrinks every year, decreasing the number of new contracts with it. So President Obama’s executive order will actually have very little impact. But the brazenness of a unilateral action to give the lowest-wage earners working for the federal government a little bump called attention to two issues that have been on the minds and placards of many in the past few years: poverty and inequality.
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Since the economic crash and subsequent bailout of 2008, the richest Americans have seen their wealth fully recover and then expand while more people fell under the poverty line, budgets for government aid programs were radically cut, and the cost of living continued to increase. Income inequality has reached its highest level since the 1920′s and the gap is widening. Workers watched the in-fighting and obstructionist politics in government and listened to the impotent solutions offered by private employers (i.e. employee food drives, getting a second full-time job, recommending that employees return gifts to pay bills) and have grown frustrated by the inaction of those supposedly representing their interests. In recent years, there has been a dramatic surge in actions calling for fair wages. Fast food and retail workers for some of the largest employers of minimum-wage workers in the country organized nationwide pickets and walk-outs to call for a $15 minimum wage and the right to unionize. There is little hope that any of this will move congress to increase the federal minimum wage to $10.10, but many states have taken up the issue themselves and recently passed minimum wage increases or have submitted proposals that will be decided this year.

Last November, the Massachusetts Senate voted 32 to 7 to increase the minimum wage to $11 an hour by 2016 and tie it to the Consumer Price Index for automatic cost-of-living increases. The minimum for tipped workers, which is currently $2.63 an hours, would be increased to 50% of the minimum wage. If the bill passes in the House, the wage hike could raise the pay for as many as 600,000 workers in Massachusetts. The Massachusetts minimum wage would be the highest statewide minimum in the country, which legislators feel is necessary because the cost of living in Massachusetts is one of the highest in the country. Business owners are concerned that the increased stress on their payroll budget would limit hiring capacity, but many have agreed that reforms to the unemployment insurance system would reduce the increased costs of payroll and taxes. Even if the $11 minimum wage is voted down in the House, Raise Up Massachusetts, an organization fighting for earned sick time and a minimum wage increase, has collected enough signatures to put an increase to $10.50 on the 2014 election ballot. Recent polling shows that minimum wage increases are tremendously popular, and it’s likely that a raise to a $10.50 wage floor would easily receive the votes required to make it law.

This work is in the public domain