On this national holiday honoring the legacy of the Rev. Martin Luther King Jr., it is worth remembering that he focused on more than racial justice. The next big issue on his agenda was economic justice.
King was murdered in 1968 while in Memphis to help striking sanitation workers get better pay and treatment. At the 1963 March on Washington for Jobs and Freedom, where King delivered his “I have a Dream” speech, one of the key issues was raising the minimum wage enough to lift many workers out of poverty.
While America has made great strides in racial equality and opportunity, it finds itself in a similar economic situation to what those marchers faced 50 years ago. The income of the wealthiest Americans has soared over the past three decades, while middle-class wages have stagnated and many low-wage workers have fallen into poverty.
The gap between the rich and everyone else is wider than it has been for a century. There are many reasons for this, from manufacturers moving overseas for cheap labor to the decline of unions and tax code changes that favor non-wage income, most of which goes to wealthier people.
The minimum wage hasn’t risen in five years, and low-wage workers’ earnings have continually fallen behind inflation. The Economic Policy Institute estimates that 28 million workers — the bottom 20 percent by income — earn less than $10 an hour.
The minimum wage of $1 to $1.25 an hour that marchers in 1963 said was too little would now, with inflation, be worth more than today’s minimum wage of $7.25. The $2 minimum wage the marchers were seeking would now be worth more than $15.
President Obama favors a plan by Congressional Democrats to raise the minimum wage to $10.10 over three years, with future increases automatically tied to the rate of inflation.
At least seven Nobel Prize-winning economists and eight former presidents of the American Economic Association have endorsed the move. But the idea has met opposition from Congressional Republicans, whose economic agenda can best be described as Robin Hood in reverse.
Assuming political gridlock keeps Congress from acting, the General Assembly should adopt a similar proposal by House Speaker Greg Stumbo, D-Prestonsburg, to gradually raise Kentucky’s minimum wage to $10.10.
Opponents of raising the minimum wage argue that it causes many companies to hire fewer workers, but there is little evidence to prove that. A number of studies by respected economists show little job loss from minimum-wage increases.
Another argument is that higher minimum wages lead to higher consumer prices. But studies show price increases, when they occur at all, amount to only a fraction of the wage increase.
Another argument is that few people actually earn the minimum wage, and many of them are teenagers. After years of high unemployment, many workers at or slightly above the minimum wage are adults supporting families.
Increasing the minimum wage tends to have a ripple effect on slightly higher wage rates at the bottom of pay scales, and that also would be a good thing.
What I find most galling is that many low-wage workers at some of the nation’s biggest and most profitable corporations earn so little that they qualify for public assistance.
Bloomberg News estimated last month that Walmart employees get $2.66 billion in government assistance each year because of their low wages. University researchers in Illinois and California reported last year that Kentucky’s 32,000 frontline fast-food workers make such low wages that 46 percent qualify for public assistance that costs taxpayers $115 million.
Why should taxpayers be subsidizing profitable companies? Shifting some of the burden back onto employers in the form of a higher minimum wage only seems fair.
In addition to being good for low-wage workers, a higher minimum wage would help the whole economy. Low-income people spend a much greater share of what they earn than do wealthier people. So, when they have more money to spend, it helps the whole economy and generates more tax revenues.
The minimum wage is long overdue for an increase. If Congress won’t do it, Kentucky lawmakers should.
As King once said: “The time is always right to do what’s right.”