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Obama thinks you deserve a raise, in 2015

By Catholic Online (NEWS CONSORTIUM)
February 13th, 2013
Catholic Online (www.catholic.org)

There's good news and bad for minimum wage workers following President Obama's State of the Union address. President Obama has pledged to raise the federal minimum wage to $9 per hour in 2015, and index it to inflation. While it could mean relief for many workers, it could also mean less work.

LOS ANGELES, CA (Catholic Online) - Obama said, "Tonight, let's declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty. This single step would raise the incomes of millions of working families ... For businesses across the country, it would mean customers with more money in their pockets."

Obama is correct. Raising the minimum wage would help about 3.8 million minimum-wage workers, raising their full-time income to about $18,000 per year. However, that amount of money remains below the poverty level for a family of four.

Raising the minimum wage typically boosts the economy by putting more money into the pockets of consumers. Minimum-wage consumers are also much more likely to spend that money than others. This has a stimulus effect on the economy.

However employers tend to balk. Employers who survive on low margins can hardly afford to pay more when they are barely earning only a few pennies of profit per dollar. Estimates suggest that as many as 500,000 jobs could be lost if minimum wage is raised to $9.

However, something should be done. Since 1968, the federal minimum wage has lost at least a third of its purchasing power. The minimum wage was designed to ensure that a worker can support himself without government assistance. However, this is not happening, with many minimum wage workers often needing public assistance at some point.

Ultimately, we are paying the higher rate, be it through wages or taxes for social services.

If minimum wage is increased, businesses can also be expected to raise prices to compensate. Still, workers deserve a fair wage for their labor, which is a basic teaching of the Church. If a person works full-time, but cannot provide for themselves, then they are not being paid enough by our standards.

The minimum wage has been raised multiple times throughout the past few decades and some states have higher than federal minimum wages. Washington, for example, pays the highest at $9.19 per hour.

Despite these increases, workers still manage to remain employed and businesses manage to stay open, despite the claims to the contrary made by lobbyists and politicos beforehand. However, prices do go up, and profit margins shrink, at least in the short term.

In some states, it should also be noted that workers may earn below federal minimum wage in certain industries. Farm laborers and restaurant workers are among those most typically and legally paid below minimum wage.

Obama pledged to raise the minimum wage in 2008, however he did not meet that pledge. In recent years, bills to raise the wages have been quickly stopped in Congress. Congress got their most recent pay raise on January 1, when Obama gave them a 1.1 percent increase.

Congressional representatives now earn $174,000 per year while the average American worker earns under $40,000. The average minimum wage worker maxes out around $14,500 for a year of hard work.

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