U.S. should adjust minimum wage more often
The minimum wage is now officially $5.85 an hour, but how much difference will it really make?
Well, for someone who was making the old rate of $5.15 an hour, it'll be 70 cents an hour, not counting taxes. If that person works full time, it will push his or her annual income from about $10,700 before taxes to more than $12,000.
But who makes the minimum wage?
According to the U.S. Department of Labor, in 2002, the latest statistics available, about half the people earning minimum wage were age 25 or younger. Four percent of them were women, about 3 percent of all workers received the minimum wage, and never-married workers were more likely to earn the minimum wage.
There was, of course, an inverse relationship between the level of education attained, with a little over 2 percent of those who had a high school diploma but had not gone on to college earning the minimum wage or less. Of those who had obtained a college degree, less than 2 percent were at minimum wage or less.
Part-time workers are much more likely to earn at the lowest wage levels, at about 8 percent, with about one in 10 workers putting in fewer than 15 hours per week at the minimum wage.
In Southwest Nebraska, many employers have found they have to pay above minimum wage to attract the workers they need, so the new rate will apparently make little difference.
But a year from now, the federal minimum wage will increase to $6.55, and a year later, it will climb to $7.25.
Businesses that might not wince at $5.85 may have to reconsider staffing levels at $6.55 an hour, not to mention $7.25. Don't be surprised if the minimum wage causes unemployment to creep up over the next couple of years -- or at least receives the blame for bad economic news.
Still, workers will be earning less at $7.25, adjusted for inflation, than they did 50 years ago.
But this week's hike in the minimum wage was the first in 10 years. If we're going to have a floor on hourly pay, it needs to be adjusted much more frequently.