By Holly Sklar
Distributed in Massachusetts by American Forum, May 30, 2012. Known placements to date include Fall River Herald News, Taunton Daily Gazette, Attleboro Sun Chronicle, Providence Journal, Think Progress.
Massachusetts led the nation when it passed the first state minimum wage law a hundred years ago on June 4, 1912. Today, it is a laggard.
Our state minimum wage has been stuck at $8 an hour since 2008. That’s less than the $8.46 value of the 1956 minimum wage, adjusted for inflation – and way below its peak value of $10.58 in 1968. Today, Massachusetts has a lower minimum wage than Vermont, Connecticut, Illinois, Nevada, Oregon and Washington.
The Commonwealth’s 1912 Report of the Commission on Minimum Wage Boards did not mince words. It said that whenever wages “are less than the cost of living and the reasonable provision for maintaining the worker in health, the industry employing her is in receipt of the working energy of a human being at less than its cost, and to that extent is parasitic.”
Today’s minimum wage doesn’t come close to the 1912 goal of wages adequate “to supply the necessary cost of living and to maintain the worker in health.” At $8 an hour, the minimum wage amounts to just $16, 640 a year for full-time work. It’s hurting workers, businesses and the state economy.
The 1912 minimum wage investigation and report was led by Mary “Molly” Dewson, who grew up in Quincy. Dewson’s first job after graduating Wellesley College was with the Women’s Educational and Industrial Union, which decades later would merge with Crittenton Inc. to become the Crittenton Women’s Union. Dewson would appreciate Crittenton’s reports measuring how much income people need in communities across the Commonwealth “to meet their most basic expenses – housing, utilities, food, basic transportation, child care, health care, clothing, essential personal and household items, and taxes – without public or private assistance.”
Dewson would be shocked to see the large gap between the minimum wage and the $27,084 income – $12.83 an hour – that Crittenton reported a single adult with no children needed to cover basic expenses on average in Massachusetts.
The minimum wage sets the floor under our state economy. Among the ten occupations projected to have the largest number of jobs in Massachusetts between 2008 and 2018, seven are low-wage: Cashiers; Waiters and waitresses; Retail salespersons; Customer service representatives; Combined food preparation and serving workers, including fast food; Counter attendants, cafeteria, food concession and coffee shop; manual Laborers and freight, stock and material movers.
If the minimum wage had stayed above the $10.58 value it had in 1968, it would have helped counter the erosion in average wages – and the hollowing out of our middle class despite rising worker productivity and education levels.
If the value of the minimum wage had not fallen since 1968, Walmart’s wages, for example, would be closer to Costco, which pays starting wages of $11 and has the lowest employee turnover in retail, doesn’t need to spend money on advertising and outperforms Walmart.
Instead of paying decent wages, Walmart tops the list of companies in Massachusetts with employees relying on publicly subsidized health insurance. An $8 minimum wage means taxpayers are actually subsidizing Walmart executives and shareholders, including the Waltons, America’s richest family.
“Even in the lowest-price segment of retail, bad jobs are not a cost-driven necessity but a choice,” observed Zeynep Ton of the MIT Sloan School of Management in the Harvard Business Review.
A minimum wage increase is overdue. Minimum wage critics routinely oppose increases in good times and bad, claiming wrongly they will increase unemployment. The most rigorous studies of the impact of actual minimum wage increases, including recent comprehensive studies in the journal Industrial Relations and the Review of Economics and Statistics, show they do not cause job losses – whether during periods of economic growth or recession.
It’s too often forgotten that workers are also consumers. When the minimum wage is too low, it not only impoverishes workers, it undermines the consumer purchasing power needed for a vibrant economy.
Minimum wage raises aren’t put under mattresses – or offshore tax havens. They are recycled back into the economy as workers use the additional dollars to buy needed goods and services their paychecks don’t cover today.
Enacting proposed legislation to raise the minimum wage to $10 in 2013 would be a great way to celebrate the 100th anniversary.
Holly Sklar is director of Business for Shared Prosperity, based in Boston, and leads its project, Business for a Fair Minimum Wage, www.businessforafairminimumwage.org.