Minimum Wage Hike Turned Back Again

Minimum Wage Hike Turned Back Again

Congress demonstrated that it has no intention of raising the minimum wage from $5.15 to $7.25 an hour when the Senate struck down the minimum wage bill in August. Some economists say the move was to protect businesses, but they add that putting more money in the pockets of workers can only spur the economy.

“A significant number of low-income people are poor not because they do not work, but because they do not earn enough money to feed their families,” says Jessica Gordon Nembhard, assistant professor of African American Studies at the University of Maryland and a member of the BLACK ENTERPRISE Board of Economists. “A significant proportion of the working poor are people of color, particularly black and Latino.”

Indeed, the Economic Policy Institute reports that while African Americans make up 11% of the nation’s workforce, they make up 17% of those who would be directly affected by a minimum wage increase.

The minimum wage has not been raised since 1997, largely because of politics, says Margaret C. Simms, interim president and chief executive officer of The Joint Center for Political and Economic Studies, and also a member of the BE Board of Economists.

One of the arguments against raising the minimum wage is that business owners would suffer because of the resulting increase in labor costs. Simms says the Republican-controlled Congress is pro business and that “as long as these views dominate the Congress, it’s going to be difficult to pass a minimum wage increase.”

In what critics call a sly maneuver, Rep. William M. Thomas (R-Calif.) inserted the legislation into a bill that would also aid the nation’s wealthiest by cutting the estate tax, leading Senate Democrats to rally against it. The bill passed in the House of Representatives but was defeated 56-42 in the Senate. “The [GOP] used tactics to complicate the issue, in an effort to deflect responsibility,” charged Gordon Nembhard.

A minimum wage hike would not only benefit the poorest Americans; it would also trickle up to help middle-class African Americans. “Raising the bar at the bottom helps to increase wages above the minimum,” notes Gordon Nembhard.