With the fiscal cliff looming, the deficit ballooning and the economy far from booming, the ongoing debate over how best to address the nation’s economic woes remains unsettled. Now, labor leaders and Occupy networks are agitating for what may be the fix: higher wages.
This Black Friday, workers at Walmart and other big box stores in 47 states began unprecedented demonstrations calling for higher wages and benefits. Although widespread and formally organized strikes have yet to be seen, the growing movement is likely to drive a larger national conversation about the way tens of millions of American workers are compensated.
Take Walmart, the nation’s largest private employer. There, the average sales associate makes $8.81/hour. Working full time (Walmart defines that as 34 hours per week), that person takes home less than $16,000 ever year. To put that in perspective, the federal poverty level for a family of four is $22,000; hence the label “poverty wages.”
It’s not just the fault of private employers, who typically pursue the wage floor set by the federal and state governments. The federal minimum wage remains at the low low rate of $7.25, less than it was in 1968 (inflation adjusted). Even working a full 40 hour week, that rate still leaves many Americans below poverty level.
Following his election in 2008, President Obama proposed a gradual increase of the federal minimum wage, to $9.50 an hour by 2011. That never materialized, but the promise remains on the transitional website of the President-elect. Four years later, the minimum wage didn’t get a single mention from President Obama or Governor Romney during the debates.
In the short term, it will likely take a combination spending cuts and tax increases to reach a compromise and avert steep automatic cuts set up during last year’s debt ceiling debacle. But labor advocates and some economists insist that a permanent fix must include higher wages.
One report cited often by the Walmart strikers found that Walmart could raise its minimum wage to $12/hour, at a cost to consumers of less than 50 cents per visit. That extra earning would lead to increased consumer spending, a foundation of the American economy. With those extra earnings come with extra taxes, a boon to the government.
Companies like Walmart, bound to maximize shareholder profits, are very unlikely to raise wages without the federal or state government forcing them to do so; however, President Obama’s second term may bring some action on that front. With labor leaders more vital than ever to keep a Democrat in the White House past 2016, and Occupy-inspired, home-brewed labor movements popping up at retailers across the nation, a rise in wages may be soon to come.